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Deere & Co. (DE) has avoided the drastic production cuts of its competitors because of its focus on lowering costs and generating cash, the company's chief financial officer said Tuesday.

Michael Mack said tight control over inventories of farm and construction machinery when demand was booming in recent years has allowed Deere to take more measured steps in response to the slump in the equipment market.

"It certainly has been a benefit in a downturn," Mack said during a presentation at the International Strategy and Investment Group's industrial conference in New York.

He said net cash flow generated by the company's operations totaled nearly $2.5 billion last year, more than double the amount generated in 1999. That cash flow has given Deere a liquidity cushion amid uncertain market conditions.

As a result, Deere, the world largest manufacturer of farm equipment, has been noticeably less glum in its outlook than its competitors, despite forecasting steep declines in sales this year in most regions of the world.

While Deere has delayed some plant expansions and made limited reductions in its work force, the company hasn't closed factories.

Investors, though, have been skeptical. Deere's stock has plunged to a six-year low, though was up 3.75% at $25.61 in Tuesday afternoon trading.

Rival CNH Global N.V., (CNH) a unit of Italian car maker Fiat SpA, has suspended its production of construction equipment through the first half of the year to drive down costs and inventories. The company also suspended its dividend to shareholders.

"We are keeping our factories at very limited production," said Albert Trefts, CNH's director of the investor relations, during a separate presentation at the ISI conference.

He said production of CNH's construction equipment is off 70% from the same period in 2008.

CNH's stock price has fallen about 88% in past 12 months. The stock was recently up recently up 4.7% at $6.29.

Both Deere and CNH predicted North American sales of high horsepower tractors would be a pocket of strength this year as foreign sales slump under pressure from tighter credit standards and weather conditions.

"We will see good high-horsepower tractor sales in North America at least through the first half of the year," Trefts said.

- By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com