Deere & Co. (DE) Chief Executive Officer Samuel Allen said Washington’s partisan debate over debt could send a “near-term shock” through a U.S. economy still struggling to recover.
“I have a lot of concerns for the economy,” Allen, who leads the world’s largest maker of farm equipment, said yesterday in an interview in Bloomberg’s Chicago bureau. “I don’t think we are out of this.”
Deere, which had 65 percent of its sales in U.S. and Canada in fiscal 2010, plans to double revenue to $50 billion by 2018. President Barack Obama is touring the U.S. to promote his proposal to cut long-term budget deficits after Standard & Poor’s said April 18 the country risks losing its AAA credit rating unless policy makers agree on a plan.
“From a long-term standpoint, the debt is a tremendous issue,” he said. “How we address the debt and the dialogue and discourse” can have “more of a near-term shock implication on the economy than what I maybe perceive others do.”
The debate between Democrats and Republicans over raising the current debt ceiling of $14.3 trillion is intensifying. The Treasury Department projects the government could reach the limit as soon as mid-May and run out of options for avoiding default by early July.
The long-term conditions driving demand for Deere’s tractors, combines and excavators are still intact, Allen said. Global food output must double by 2050 as the populations in emerging economies expand, become more prosperous and increasingly migrate from rural areas to cities, he said. Deere is positioning itself to help farmers improve yields and meet those needs.