First came the whiskers, followed by a furry little face that didn't look very threatening. But now, investors are being whipped by a destructive tail.

Yes, Fools, the cat is now fully out of the bag. Global industry simply fell off a cliff sometime last fall, and the more plant closures and layoffs we see, the more this once-bagged cat resembles a rabid, ferocious lion. After Terex (NYSE:TEX) became the latest heavy-equipment manufacturer to reduce guidance this week, the time is ripe to reassess the landscape for these machinery makers.

Back in September 2008, before the feline had extended its claws, Terex reduced 2008 earnings guidance to less than $6.65 per share and watched investors crush the stock. This week, Terex reduced guidance yet again, this time to a range of $5.40 to $5.45 per share, but the shares traded resiliently in the aftermath. The difference, I believe, is all about sentiment, which suggests that markets have already priced in a barrage of earnings disappointments. With a final growl, Terex even warned of a potential $600 million impairment charge relating to tumbling asset valuations, and still, shares refused to head lower.

Elsewhere in the sector, investors are licking their wounds after Caterpillar (NYSE:CAT) dumped dismal earnings and deep labor cuts upon them. CNH Global (NYSE:CNH) set the mood by forecasting huge sales declines and announcing plant closures to work through burgeoning inventories. Manitowoc (NYSE:MTW) posted a fourth-quarter loss last week despite some one-time gains from the divestiture of its marine segment. Meanwhile, mining-equipment specialist Joy Global (NASDAQ:JOYG) notably bucked the trend, with a 68% increase in net earnings for the fiscal fourth quarter and a still-expanding backlog of equipment orders.

As we await earnings from both Bucyrus (NASDAQ:BUCY) and Deere (NYSE:DE) in mid-February, Fools with an interest in the sector have time to review balance sheets and operational outlooks. With stimulus packages under consideration around the world, and indications that some portion of demand disruption is related to credit and liquidity issues, I believe several of these companies will find themselves on the road to recovery by 2010. Now that the cat is out of the bag with respect to a massive global recession and the frightful derailment of the worldwide industrial machine, I believe that a recovery process can soon begin for the heavy industrials with the lightest debt burdens.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.