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AGCO rant

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Bob Bancroft

Well-known Member
Location
Aurora NY
AGCO summarily shut down the last AGCO presence in the area. They were down to a $200,000 annual parts only dealer. They stocked half that! Now they have three months to pack it up and send it back. This was an AC dealer from the beginning. There was a heavy AC presence here, and plenty of dealers. Oliver was also heavily represented in this county with three dealers. They have long since gone, and this last AGCO dealer was the last source for those parts.

I'm more glad than ever I gave up on the White planter, and Gleaner combine.

Congratulations, AGCO.
 
It's 105 miles to the nearest AGCO dealer at Wilmington, OH. Maybe only 3 or 4 in the state,,
 
There are more than that in Ohio. A dealer search within 200 miles of Columbus resulted in 74 results.
a177826.jpg
 
I bought two new Massey Fergusons, one a 2007, the other a 2012.

I've had trouble with both (less than 450 hours on one, around 80 on the other).

Neither MF/AGCO nor my dealer has treated me well. Indeed, I have been treated badly by both.

Never again.

Dean
 
Deere already has been doing it, and probably CIH, it is the way of the times. I do not like it, but not my companies.
 
Local dealer here is going strong and moves a lot of Gleaner combines, planters (what ever brand name they carry). They sell a lot of Versatile , some Massey and some other short lines as well. Deere is still in town also but every CASEIH dealer is 50 plus miles away.
 
CIH has been a lot more agressive about thinning the herd since the merger nearly 30 years ago versus Deere.
 
There are 7 AGCO dealers within 75 miles of me. Unfortunately the 2 closest are owned by the same guy and unless you got it new from him over the last couple of years. Closest decent one is over 50 miles one way. When I tried contacting AGCO all they would respond is "they sell new equipment". So you know where AGCO can go.

Rick
 
Don't apologize. I use classic also, as I can follow who's talking to whom. But the one thing modern view is good for to me, is if someone is registered, they can list as much as they want about themselves.
 
Bob is out in the fingerlakes reigon. I don't think you need to worry about Handy's going out of business, but as for AGCO in the north east,?????
Loren, the Acg.
 

Local International dealer carried NH for the hay tools 40 years ago. Then they became a Case IH dealer and picked up Mahindra, but still carried NH hay tools an skid steers. Mahindra was outselling the case ih, and when Ford bought NH, they were able to continue selling the red and yellow and skidsteers. Ford sells out to Fiat, and now the Case IH dealer becomes a blue tractor dealer. Case and NH merge, so now there are blue tractors and red tractors side by side.

Another local dealer sold Massey Ferguson and Ford New Holland. Massey and New Holland on the same lot. Now that Agco has Massey, they sell Hesston hay tools and can parts for most things in the agco system.
 
(quoted from post at 20:32:57 12/29/14) There are more than that in Ohio. A dealer search within 200 miles of Columbus resulted in 74 results.
a177826.jpg
Click to expand...

I can tell you first hand that 3 of those dots near my end of the state are DINO (dealer in name only) One is a New Holland dealership who carries Massey, the other is (shocking) a New Holland dealer who carries Massey, and the third is a McCormick dealer who used to carry New Idea, somehow must still be a dealer. The only "real" agco dealer near me is Witmer's in Columbiana Ohio.

the rest are not real agco dealers, per se.
 
We sold agco and new Holland several other brands to . Everybody is selling out the little dealers agco dealer just got bought up buy the meaga dealer and CNH is closing a family dealer been in business 85 years .
 
Indeed I do! Ours is a silver FWA and spends almost its entire summer on the 3 pt disc mower.

Got a line on a tach? I would love to have one that works!
 
Jake, Those hills are steep over there your mom gave us a ride on the wagon this summer behind the 1650 on the Milky Way farm tour. Greg
 
Easy. Our nearest Agco dealer sells NH and Versatile. The CNH store down the street was forced to drop the NH side so the Agco store picked it up.
 
I am fortunate. I live less than 50 yards from the largest AGCO dealer in the US...Kuhns Equipment in Arthur, IL. They sell Massey, Gleaner, Hesston, Sunflower, White Planters, and Versatile. We also have 6 CIH dealers within a 50 mile radius and Sloan Implement the largest Deere dealer group just 5 miles up the road...so we are very fortunate here.
 
NH and Agco? I used to think they all did, so many dealers around here have those 2 under the same roof.

My Deere friends are feeling much like the original poster now a days.

In the past few years the local Deere dealerships got consolidated into one giant with 20 dealership, and the 2 closest dealerships were shut down. This means my Deere friends need to drive almost as far to a dealership as I do for Gleaner parts. And at least I like my dealers; can't say the same about the feeling to the new Deere......

Paul
 
So who is to blame? Company, dealer or the market?

Presumably someone in AGCO corporate decided it was not profitable to maintain a business relationship with a marginal franchisee. Of course the corporate bean counters may not see the connection between being able to purchase parts locally and new tractor sales at a dealer ninety miles away.

Back in the late seventies and early eighties, IH closed a lot of dealers across the country. In 1985 International Harvester farm equipment was sold to Tenneco and merged with Case. Would the collapse of IH have happened if they hadn't gutted their dealer network? Or was the market simply too crowded for IH to have survived, regardless? I think IH management made the all-too-common mistake of sacrificing the company's long-term profitability in favor of short-term gains. That's what shareholders want. And that is why China has been eating US corporations alive: the Chinese think in terms of decades, not quarters of fiscal years.
 

I don't know why they do as they do. I don't think any corporate entity gives a crap about anything but the bottom line and their bank account anymore. Maybe it has to be that way, I don't know. It's not like I'm going out to buy a new tractor or new anything else. But it irks me to see long time, established businesses get shafted by corporate decisions. Same thing happened with our local Chevy dealer, same thing happened to us with Husky back in the 80's. I don't have an answer for it.

The up side is that it opens the market for someone to step in and take up the slack. We have a world of options via the internet and these forums. There are people running companies dedicated to supplying parts and service for our equipment. I know that locally I can get better service at a 3 bay repair shop than I can at the local Agco dealer, and for a lot less money and no excuses if it's not right.

My 2 cents.
 
Just because the doors are open and the lights are on does not mean a business is profitable.

One thing you guys don't seem to consider here is that the market has changed since the 1950s.

Where there were 50 small family farms, there are now 1 or 2 BTOs and a couple of small guys hanging on by a thread. The BTOs are the only ones buying new equipment. The small guys get by with patching up old junk.

Customer base is way way down. You don't need that many dealerships, salesmen, and parts guys to serve them all.

Really, shutting these dealerships down is almost a mercy killing, to spare them a decade of slow decline into bankruptcy.

Look at your "lucrative parts business." When was the last time you had to wait for more than one person ahead of you at the parts counter? Heck, the few times I've been into the big chain dealerships in the last couple of years, I've walked right up to the counter. NOBODY there ahead of me! It's not so "lucrative."
 
In this case, this is not the end of this dealership. They have other lines, and are doing very well.
As far as I'm concerned, AGCO is mainly hurting themselves. I would still have a White planter and a Gleaner combine if I had a local dealer.
 
I've been awfully concerned that the one I deal with is going to get chopped. Especially since the long time owner died a year ago. His son was service manager and daughter in law runs the parts department. They're still open dealing mostly in parts and service. They only take as much new equipment as Agco makes them take. I thought for sure they'd be done for when Agco changed everything to Massey. There's another big dealer about 12 miles away at an intersection of two main roads whole this dealer is in the middle of nowhere. They stayed off each other's toes for years by one dealing mainly in Agco White and the other in Agco Allis.
There are three other Agco dealers within a reasonable distance,so I won't be without a dealer if they do get shut down,but I prefer the small dealer personal service that I get from them.
 
Went trough the same thing with Ace Hardware. Although Ace is a dealer owned Co-op, the big boys get control, hire a bunch of MBAsses and attempt to make everything look alike. Kind of a McDonald thing. Everybody has to make hamburgers alike. You have to stock the same thing, even if it doesn't sell in your area. The last straw, they took the dealers money and opened up company stores to compete with the members. I finally sold out, best thing I ever did.
 
I have a hard time believing a parts dealer with gross annual sales of $200K is profitable. Assuming their markup is 100 percent, that only leaves $100K net BEFORE EXPENSES. How many employees? How much do you figure they were spending on their building and utilities? Presumably they're paying interest on their inventory, which at 5% is $5K annually. Do you know for sure that Agco closed them down, rather than they decided to get out of the business? Maybe they weren't paying their Agco invoices in a timely fashion.
 
The one thing I noticed here in NY is that AGCO is pushing dealers to stock more wholegoods. In some cases this means a huge increase in value as some dealers were pretty much doing parts and service without stocking any new equipment. About a half hour away there are two AGCO outlets under ten miles away from each other. I don't know how that is going to work long term. One is in a parts mode and the other has new MF compacts and other small equipment. Funny thing is AGCO set up a cancelled Deere dealer with a franchise several years ago. One of the larger strikes against it by Deere was it ordered very little new equipment. I never did business with him but I had heard he could be difficult to deal with.
 
Farm equipment companies as a group may be looking at ways to conserve costs in the future. And looking hard at geographic locations where they can maximize profits. You could be in an area where they don't see future profitability. I know you didn't mention Massey but I have heard they have experienced seven years of sales decline in MF tractors - part of AgCo company. Think farm equipment companies in general are preparing for some tough sailing in years ahead. Because of commodity price declines JD has laid off several hundred workers at multiple locations to cut company costs. They are projecting a serious drop in equipment & tractor sales in 2015. Maybe AGCO is making a similar sales projection for your area. When they did field demonstrations of their brand new Gleaner Super Series combines they did not do any east of Ohio. They may feel their future sales/profits are in the corn belt and wheat belt rather than elsewhere. And supporting a dealer network in those locations.
 
A couple of years ago,these guys were advertising a new Massey FWA loader tractor in their ads. I asked about it one day when I was in there. Bruce just kinda humphed and said,"if we ever get it,it's been ordered since last spring. They make us take so much new stuff every year,then when we order it,we can't get it".
 
All of the above, Mark.

"...[A]ll-too-common mistake of sacrificing the company's long-term profitability in favor of short-term gains. That's what shareholders want. And that is why China has been eating US corporations alive: the Chinese think in terms of decades, not quarters of fiscal years."

Bingo.

There are other reasons, of course, but sacrificing long-term viability for short-term results is endemic in the US (not only the US) and has been since the twenty year aberration following WWII.

Why? Look at the reward system used by business (and government) for the obvious reason.

Dean
 
When my cousins were looking for a planter they said they would rather have a White but if your planting in the spring and have a break down you cant wait a day or 3 days for parts from way off. Even if there is a dealer somewhere they cant carry everything and have to order parts. They bought a Deere planter, had it for a year then bought a Kinze.
 
(quoted from post at 06:32:28 12/30/14) I will never understand shutting down a profitable venture.
Click to expand...

Bob, when IH started closing down dealers (very early 70's not late) it had nothing to do with dealer profitability. It was costing IH money to deliver parts on a daily basis to each store. Simple solution, reduce the number of stores. That reduces the number of delivery trucks and drivers needed. We moved onto the farm in 72, I was 16. There were a lot of very angry farmers here in the area because now they had to drive 20 miles for parts when before it was 6-7 miles. I remember it well. It taught me that as long as several companies produce a reasonably priced similar quality product, brand loyalty goes out the window if the customer feels like the company isn't loyal to the customer.

Here it was kinda funny in 72. Almost everything newer was Farmall/IH yet the closest 2 dealers were JD and Ford. The JD dealers was a poor dealer who wasn't very interested in taking care of his customers and most of his business was parts. The Ford dealer was a car dealer who had, because of location been forced by Ford to carry the AG stuff. He didn't want the AG business at all unless they were buying a farm truck. By 72 the small IH dealers here were gone in this area. By 78 the JD dealer had passed and another dealership picked them up. In 78 it was shocking just how much new equipment around here was green. I worked for one guy in 72-3 who was IH, everything was IH to include a tractor he got new in 71. By 78 everything he owned was JD. But that didn't kill IH. Heck the last 2 years IH outsold JD. What killed IH was trying to operate on too small of a profit margin.

Rick
 
I can't speak as to your dealer but I would imagine some of these guys here sighing a sign of relief when the ordered units did not arrive as they most likely had no buyer for them if they came in. AGCO never really put its best foot forward after the merger era of the mid-1980's. CIH and Deere stubbed their collective toes on dealer issues here back then which should have allowed AGCO to make inroads. Also, a number of FNH stores were ghost towns back then, too. I think the Deutz based tractors put off a lot of farmers. White eliminating moldboard plows while pragmatic for the company sent the wrong signal about the company to farmers who considered it a core product. They might have been better off to think about PR even if it meant for short term inefficiency. Easy to say now but back then these companies were fighting for their very survival.
 
It used to be that dealers made a decent chunk selling parts. It was a big part of the equation. I understand the business end if something isn't profitable enough but they are kind of cutting themselves out. Years ago, more farmers = more tractors and machinery sold. Now they only want to sell new but with fewer farmers, the same farmer isn't going to buy a new tractor every year or two years so I guess the new stuff is priced accordingly to cover that. If a dealer isn't there people shy away from that brand. I remember when I was growing up my dad was in need of a muffler for the ZA MM, his first and only brand new tractor which I still have. This was when White was "fooling" around 1970-73. I remember dad saying he couldn't find or get parts as the dealers in some areas had closed up. I don't think a lot of the older dealers back then had much overhead like they do now days, more machinery out there so more parts to carry. I think AGCO is more of a "world" company than part of a company of a country. They are all that way in a world market now. Think of all the brands years and years ago...It would have been unheard of to think tractors made here would be sold world wide one day as they are now. A company competes in the world more than locally any more so it can cover the loss of dealers here and there. I don't like it either. I think we were better off years ago.
 
This dealer has other lines, and is doing very well. I worked there for 12 years. My friend, who runs the L&G department, did $1.2 million this year. When I make a statement here, maybe I am not thorough enough, but I am not guessing. AGCO shut them off. The owner of the business told me personally. For years, as the other "AGCO" affiliated dealers were squeezed off, this dealer fed them parts, as long as they were trying to satisfy customers. Now they're going to be on the other end of that equation.
 
If you think having Sloan's close by is good you got to be kidding. We had three Deere stores owned by one person everything was great, service,huge parts stock and sales. Sloan's bought them out and ran them down the drain. Even the most diehard green people are now looking at other brands. Most of the employees have left and no one is happy.My son works for a farmer that has 18,000 acres and they were all Deere before Sloan, now they are all red.
 
Bob, thanks for the clarification. But it does beg the question of whether an OEM should be expected to sell parts to a dealer who does not carry its products and whose primary business is with the OEM's competitors.
 
How long was the dealer "parts only" for AGCO? The handwriting should have been on the wall that AGCO would eventually be phased out when new machine sales were dropped. Most likely it was the dealer's decision to get out, but it wouldn't make sense to tell existing customers that. It's much easier to blame the big company instead.
 
From what my brother said, when he worked for a local Ford/New Holland dealer. The dealer had to sell X amount $$ of machinery each year to keep being a NH dealer. The Caterpillar dealer where my brother works now, is now a Cat AGCO dealer when AGCO bought the Challenger from Cat. The closest MF dealer to me is 35 miles away. They only sell the small MF tractors, and MF/Hesston hay equipment. Their big tractor line is LS tractor's, LS used to make tractors for NH.
 
(quoted from post at 17:05:19 12/29/14) AGCO summarily shut down the last AGCO presence in the area.
Congratulations, AGCO.
Click to expand...

In Britain JD started this business practice, forcing neighbouring dealers to take-over other areas & companies, JD stated in the farming press they only want a few super dealers in the Country.

MF have now followed the same suite - forcing dealers to join together and become multi branch outfits.

Years ago when Kubota came here, many MF dealers took on the Kubota franchise for compacts & garden machinery and were very successful. About 10 years ago when Kubota launched its first larger agricultural tractors, these MF dealers were given the choice sell MF only or Kubota only. Some MF dealers went Kubota and have done well selling to larger tractors to Councils etc and to smaller livestock farms.

These main Agco MF dealers also have to handle Challenger & Fendt & Valtra depending on the type of farming in the individual farming areas.

Ford & New Holland have always had independent dealerships and many have been dealers for a long time. There are a few large multi branch NH dealers. When NH bought Case IH, they run their two brands seperately. Either as independents selling one or other brand; a few NH dealers own CaseIH dealerships but they have to be run independently of each other.

Renault were always small dealerships, not taking much market share. When Claas bought Renault they forced their very successfull combine & forage machinery dealers to drop other tractor brands and only sell Claas. They had mechanical issues and secondhand Claas {Renault} tractors were worth very little secondhand. The latest Claas models have improved but still have the bad reputation to get over. Claas just announced their all new sub-100HP tractors are being made in Italy by Same-Duetz-Fahr with engines made in India.





All the main manufacturers want few dealers covering large areas of the Country through multi-branches. And they are having sub-100HP tractors built in China, India, Turkey etc to keep down their build costs.

Its now Worldwide Agri-Business.
 
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