Question-and-Answer Session
[Operator Instructions]. Our first question comes from Ann Duignan of JPMorgan.
Ann Duignan - JPMorgan
Hi, good morning guys. Can you hear me okay?
Martin H. Richenhagen - Chairman, President and Chief Executive Officer
Good morning, Ann. Yes, we can.
Ann Duignan - JPMorgan
Hi, good to be here. Anyway, can we talk a little bit more about pricing in the back half and going forward? Can you give us a little bit more specifics in terms of how much you're increasing pricing on average, and then could you talk a little bit about what you might do on your early order programs this year? Are you going to include something like an inflation clause, or how you're going to protect those prices going into next year?
Andrew H. Beck - Senior Vice President - Chief Financial Officer
Ann, in terms of the second half of this year, when we started the year, we were looking at pricing somewhere between right around 1.5% up to 2%, and now our full year pricing, we're expecting to be over 3%, between 3% to 3.5%, and the second half of the year, pricing to be around 4%, and that pricing does escalate as you go throughout the second half of the year. We still are in a situation with our strong order bank that we can't put the pricing in, as quickly as perhaps we'd like, but as we get throughout by the end of the year, we've had a substantial increase in pricing from where we were at the beginning of the year.
In terms of covering our cost, we think that overall our cost inflation that we're fighting against in terms of increased steel cost, and other factors will be covered overall by the end of the year, but as we discussed in our comments, we'll have a impact here in the third quarter because of some of the price protection we have on existing orders.
In terms of what we're going to do on our pre-sale programs and orders for next year, we're certainly increasing our list prices. At this time, I think in most cases we are not putting surcharge or something like that on there, were going ahead and putting it into the base price of the unit.
We continue to monitor what's going on with cost and to make sure that we think this will be adequate. In some cases, we are slowing down the order intake that we're experiencing in order to make sure that we don't cause ourselves problems as we go into 2009.
- To read the full transcript on Seeking Alpha, click here »
