Page 16
Currently Viewing: FE E-Watch: May 28, 2013
Industry News: May 28, 2013

Industry News

New Hampshire 'Dealers Bill of
Rights' Will Cover Farm Equipment

By: Garry Rayno, New Hampshire Union Leader

CONCORD, N.H., May 22, 2013 — Auto dealers will have greater flexibility in their dealings with auto manufacturers after the House voted on Wednesday 338-30 to approve Senate Bill 126.

The "Auto Dealers Bill of Rights" changes business practices between manufacturers and their dealers, giving local auto and construction and farm equipment dealers more flexibility to run their franchises. All other states have similar laws.

Supporters say the bill will level the playing field for the dealers who have said they are often held hostage to the manufacturers' demands.

But opponents believe the bill overturns existing business contracts and rather than leveling the playing field tilts it significantly in favor of the dealers.

SB 126 has been a battleground this session including an ad campaign by manufacturers trying to derail a bill that had a full head of steam coming out of the Senate with a 21-2 vote.

Manufacturers say the bill is unprecedented and will drive up costs for consumers, adversely affect their brand image and their efforts to make auto purchasing more consumer friendly.

But local auto dealers say they are often threatened with loss of their franchises if they do not bow to manufacturers' demands to update showrooms and change signs and locations.

Rep. Pam Tucker, R-Stratham, said the bill protects the property rights of local auto and equipment dealers.

"Dealer-manufacturer relations are grossly unbalanced right now. It is truly unfair," Tucker said. "This bill will eliminate a monopoly structure that requires all autos to be sold through a franchise in our state. Right now, across the U.S. a consumer can buy a vehicle only through a dealership."

But manufacturers argue the bill's protections for New Hampshire auto dealers are far greater than other states and override existing contracts.

Catherine Mulholland, D-Grafton, said the bill is an example of the legislative attempting to micromanage the industry and but totally inappropriate.
"SB 126 would not just level the playing field," Mulholland said, "but tip it violently in favor of the dealers."

Opponents said if dealers believe they are not treated fairly they should go to court to challenge manufacturers' unreasonable demands not come to lawmakers to change the rules in mid-stream.

"Seeking redress through the courts is suicide for a dealer," said Rep. Emily Sandblade, R-Manchester. "The private property rights of both parties are protected, not just one and it helps eliminate elements of coercion."

SB 126 includes a "buy local" provision allowing dealers to use New Hampshire contractors and suppliers when updating facilities and limits upgrades to once every 15 years. Most states have a 10-year limit on mandated updates.

The bill also requires manufacturers to pay dealers retail rates for labor and parts when they perform warranty work and requires manufacturers to open their inventory and sales files to dealers.

After the vote, NH Automobile Dealers Association President, Pete McNamara said, "This proposal will stop the unfair spending mandates passed down to us from manufacturers, and will require basic fairness in the relationship."

The bill's provisions also cover equipment and farm and construction equipment dealers.

The bill has to go back to the Senate due to changes the House made in the bill.

Return to Top

Owner of New Holland
Tractor Brand Turns British


May 22, 2013 — Fiat Industrial, which owes its heritage to Italy but controls the New Holland tractor brand, confirmed plans to move its tax residency to the UK, a move which would allow to exploit a cut in corporate taxes.

The group, which manufactures Iveco trucks and is in the process of taking complete control of farm equipment group CNH Global, said that it had requested a "ruling" from "competent authorities" over moving its tax domicile to the UK from the Netherlands.

The move would be "fully consistent with the main objectives" of Fiat Industrial's decision to buy-out the minorities in CNH, namely the "establishment of a global player in the capital goods sector that is attractive to international investors

It also followed examination of the treaties signed between countries over where multinational companies pay their taxes.

"Having examined the various bilateral treaties against double taxation, the group believes that establishing its tax domicile in the UK would put [the combined company's] shareholders on the same level ground as those of its principal competitors," Fiat Industrial said.

Tax Cuts

The move would also allow the group to benefit from the succession of cuts to corporation tax that the UK has introduced in a means to prevent companies fleeing to lower tax regimes, and attract new investment.

Corporation tax rates have fallen from 30% six years ago to 23.25% today, with a further fall to 20% planned for 2015.

The UK has also relaxed rules on taxation of companies controlled abroad.

Fiat Industrial said that its businesses paid some E500m in taxes raised on local tax laws, 46% in North America, 11% in Latin America and 27% in Europe.

International Heritage

Fiat Industrial was demerged from Fiat, the Italian car giant, in 2011 taking on interests in Iveco and the 89.3% stake in CNH Global.

CNH Global owns the Case and New Holland farm equipment brands – the latter named after New Holland, Pennsylvania, where the marque was launched in the late 19th century.

Fiat Industrial shares, listed in Milan, closed up 1.2% at E9.25.

Return to Top

Orthman Adds Two to
Support Midwest Dealer Network

LEXINGTON, Neb., May 21, 2013 — Orthman Manufacturing has added two new members to its growing dealer support network. Kyle Frazier is a regional product specialist for the Midwest, including Illinois, Indiana, Iowa, Michigan, Kentucky, Ohio and Wisconsin; Paul Hartness has been named territory manager for North and South Dakota and Minnesota.

“We take customer and dealer support seriously at Orthman, and we’re always pleased to add high-quality members to our team,” said Gary Mohr, Orthman product marketing manager, global OEM. “Kyle and Paul understand today's agriculture and the needs of our customers and dealers, and they will represent Orthman well.”

As a regional product specialist, Frazier will bring expertise on all Orthman products to his region, providing product support and training to dealers and producers. He comes to Orthman from Case New Holland America where he was the technical training lead for high-horsepower tractors. Frazier earned a bachelor's degree in ag systems and a master’s in plant and soil science from Southern Illinois University.

Hartness will be responsible for managing and expanding the Orthman dealer and distribution network in his region. Prior to joining Orthman, he was the eastern U.S. regional sales manager for Crary Industries, a manufacturer of agricultural and industrial products in West Fargo, N.D. Hartness earned his bachelor's degree in business administration from Moorhead State University.

“We’re certain Kyle’s and Paul's experience and knowledge of the industry will benefit our producers and dealers,” Mohr said. “Our growing dealer organization demands the best in product representation and account management, and Kyle and Paul will provide that day in and day out.”

KMW Loaders

Return to Top

Company President Vows to
Rebuild Hardware Store Destroyed by Fire

Source: Bill

May 22, 2013 — The president of a decades-old Sauk City hardware store destroyed by fire Monday night pledged to rebuild.

John McFarlane, president of McFarlane Manufacturing Co., which includes McFarlanes’ True Value hardware store and a large customer and farming community service area, issued a statement Tuesday after a fire destroyed the store and service area.

“Everyone here at McFarlanes’ is blown away by the immediate outpouring of support we’ve received from the community,” McFarlane said.

“We not only plan to rebuild after this unfortunate circumstance, but we are doing everything we can to restore immediate service to our customers and provide the services they’ve come to expect for three generations,” he said.

The main storefront’s second floor appeared to be completely gutted by the fire. The parking lot in front of the store was partially flooded because of the massive amount of water firefighters poured onto the structure.

McFarlanes’ has been in business in Sauk City since 1918.

The manufacturing area of the complex, which specializes in farm implements, was not affected by the fire, which started at 10:52 p.m. Monday and wasn’t contained until about 4 a.m. Tuesday.

A spokesman for the company said there were no damage estimates or a cause determined for the fire.

About a dozen area fire departments fought the three-alarm blaze at the store on Water Street. No one was injured, and no homes were evacuated.

McFarlanes’ has a long tradition in Sauk City and just last weekend hosted its annual McFarnival event in which it opened its doors to the community with a festive atmosphere.

“I hope they rebuild, if that what it has to come to,” said Jeff Davies, who lives across the street from the store. “It was a good place to go for hardware and pretty much everything else. You hate to see the loss of a local business, especially in this day and age."

Return to Top

Thurston Manufacturing
Acquires Simonsen Iron Works

THURSTON, Neb., May 20, 2013 — Thurston Manufacturing Company has announced the asset purchase of a Spencer, Iowa, based company, Simonsen Iron Works. Nick Jensen, co-owner and Chief Marketing Officer of Thurston said, “This acquisition is an exciting opportunity for Thurston Manufacturing, furthering company diversity into a larger number of markets and industries by continuing to operate Simonsen Iron Works as a competitive and reliable provider of contract manufacturing services”.

“Just as important as diversification is the immediate addition of production capacity for our current domestic and overseas markets. This modern 130,000 sq. ft. facility will provide a relief valve to current production of BLU-JET and Circle R Side Dump products in Thurston, allowing us to accept orders we would otherwise be forced to turn away,” Jensen continued.

Recent business activity at Simonsen Iron Works includes the production of attachments for the ATV and skid steer industries as well as various components for several area manufacturers. The business has two automated flat sheet lasers, five robotic welders, numerous manual welding stations, several press breaks, large stamping presses and shears plus tube bending, cutoff machinery and machining center capabilities. A state of the art conveyor-fed powder coat paint system followed by an efficient assembly and packaging line is also encompassed.

After former ownership was forced to lay off Simonsen employees last week, Thurston Manufacturing expedited the purchase process and 30 of the 32 staff members have now been rehired under the new ownership. This includes Operations Manager Aaron Schulz, who has been instrumental in maintaining employee and supplier relationships throughout this process. Ryan Jensen, Chief Operating Officer, Thurston co-owner and brother of Nick Jensen commented, “The employees of this facility take great pride in their work and their work place as evidenced by the excellent on-time shipping records, extremely low warranty experience and the overall spotless, physical appearance of the entire facility."

Jensen continued, “This is a very impressive factory, inside and out”.  Work as usual commenced under the new ownership at 6 a.m. Monday, May 20 Thurston Manufacturing Company, incorporated in 1971, designs, manufactures and markets Blu-Jet Fertilizer Injection and Tillage Equipment and Circle R Side Dump Semi-Trailers in Thurston, Nebraska.

The now 160 employee company has been operating at maximum capacity, running 3 shifts, 50 hours per week for over eight years. This strategic acquisition will help Thurston diversify into different industries and increase overall capacity.

Founded in 1906, Simonsen Iron Works is poised to expand into new opportunities for business growth.

Layton Jensen, CEO related: “Thurston Manufacturing Company is pleased to add this facility in Spencer, a community filled with skilled and vibrant workers, and we look forward to a long lasting relationship with the city and its people."

25,000th Large Square
Baler is Built in Hesston, Kansas

HESSTON, Kan., May 17, 2013 — In 1978, Hesston Corporation introduced the Model 4800, the industry’s first large square baler, revolutionizing hay production and feeding practices at a time when labor availability and fuel prices were driving a need for innovations on the farm. Big square balers have come a long way since then, and on May 16, 2013, a large crowd gathered at AGCO’s Hesston Operations to celebrate the 25,000th large square baler built in Hesston, Kan.

“Today is not only about celebrating the manufacture of the world’s leading large square baler, it’s about celebrating the people who made it happen, and especially those who are still involved today,” says Dean Morrell, hay and forage product marketing manager at AGCO. “The foresight, passion and ingenuity that go into large square balers built in Hesston have not diminished one bit since Allen White built a giant bale chamber in the engineering lab and manually packed it with hay.”

Fifteen of the guests recognized during the event were involved with developing and building the first large square balers at Hesston and are working at the manufacturing center today. Together, these 15 men have 610 years of experience working at the Hesston plant, with tenures ranging from 36 to 49 years. Their involvement ranges from engineering and parts procurement to field testing, welding, fabrication, shipping and paint; they have been involved in every aspect of big square balers from the first prototypes to today’s popular Hesston by Massey Ferguson® Model 2170XD 4-foot x 3-foot extra density baler and the Hesston Model 2190 4-foot x 4-foot baler, which produces bales weighing up to a ton each. The celebration was filled with fond reflections.

“Working in Field Test was a good fit for me,” tells Kurt Graber, a farm boy with a love of physics, who started in Hesston in 1964. “The company paid me to test many interesting products in farmers’ crops. I learned a lot from the work and from the engineers, who were developing many innovative products.

“Working on the large square baler gave me the greatest feeling of accomplishment, and was the most interesting and challenging of all the projects I’ve worked on during my career at Hesston,” Graber states. His was just one example of the pride of ownership expressed during the event.

Baler Headed to Oregon

It also was with pride the team in Hesston presented the 25,000th large square baler to its new owner, Bill Levy of PacificAg, the largest agricultural residue and hay harvesting business in the United States, headquartered in Hermiston, Ore. Levy, who works with dealer Denzil Robbins of Robbins’ Farm Equipment, Baker City, Ore., has relied on balers built in Hesston since starting PacificAg in 1998. Robbins became a full-line Hesston dealer in 1986, and the dealership has a strong history with Hesston hay equipment, having twice been a member of The Hesston Presidents Club and recipient of the Top Volume Dealers Award of North America nine times during its 27-year history.

Bill Levy, CEO and president of PacificAg, notes that “having AGCO and Denzil Robbins as partners has been a key factor in our success from the beginning. AGCO’s quality and innovation combined with consistent support enable PacificAg to meet the stringent requirements of our customers with minimal maintenance and downtime. We look forward to buying many more AGCO balers going forward.”

Journey From the First to Number 25,000

As anyone who attended the celebration soon learned, creation of the first large square baler was not easy. However, it was technology whose time had come, and the engineers fought hard to launch and keep the project alive.

When White’s first hand-packed 4-foot-by-4-foot bale did not get hot or spoil, engineers went on to build the first prototype baler. They quickly realized that the side-feed approach currently being used wasn’t going to work, and in 1975, the first prototype that fed hay into the bottom of the bale chamber was built. It was soon followed by Prototype #1, which went to the field in early 1976.

Field testing in real-world conditions, working with farmers to meet their needs, have always been a hallmark of equipment development at Hesston, and with extensive field testing, by 1978, the Model 4800 was perfected to the point 28 units were built, including units for demonstration in Australia and Europe. These productive balers proved to be a more labor-efficient and economical way to harvest, store and feed forages.

Nearly 50 individual patents were awarded to the original baler, but within four years, a new prototype was in the works. Over the years, numerous upgrades were made; the facility transitioned from Hesston to Fiat and Case IH before being purchased by AGCO in 1991. Through the years, large square balers were built in three different sizes and sold under the Hesston, New Idea, Massey Ferguson, Fendt, Challenger, Case IH, New Holland and AGCO brands. Today, the balers built in Hesston are sold in as many as 39 countries and are used to bale everything from alfalfa and grass hay to wheat straw, miscanthus for biofuel production, and even recyclables such as newspaper and aluminum cans.

“It is amazing to look back at all that has gone into today’s big baler models,” says Morrell. “Building the 25,000th baler is an invigorating milestone and a great tribute to everyone who has been involved in its development. I know there will be even more innovations in the future large square balers built in Hesston.”

Return to Top

Deere Clips Sales View
as Weather Chills Forecasts

By: Bob Tita, MarketWatch

  • Deere's fiscal second-quarter farm machinery sales rise 12%
  • Sales of construction machinery down 6%
  • Company leaves profit outlook unchanged, lowers sales forecast

May 15, 2013 — Deere & Co.'s fiscal second-quarter earnings rose 2.7%, but the company whittled its sales outlook for the year amid concerns that cool, wet weather in the U.S. will hamper this year's farm crop and hold down demand for farm machinery.

Deere, the world's largest seller of tractors and harvesting combines, beat analysts' expectations for the quarter. But analysts widely expected the company to raise its sales and profit forecasts for the year. Instead, Deere clipped its sales growth projection to 5% from 6% in February and left its net income forecast unchanged from the first quarter at $3.3 billion, or about $8.50 a share. Analysts have been expecting earnings per share of $8.61.

The Moline, Ill., company said weather and global financial conditions had made it increasingly cautious about the company's performance.

"Deere's near-term forecast is being tempered by lingering economic concerns in many parts of the world," Chairman and Chief Executive Samuel Allen said in a written statement. "Cool, wet weather in North America has delayed crop planting, slowed construction activity and hurt sales of turf-care equipment."

So far, farmers have shown no indication they're dialing down their equipment purchases. Retail sales volume of tractors and combines in the U.S. and Canada rose 11% during the first four months of 2013, according to the Association of Equipment Manufacturers. Equipment sales volumes were up 7.8% in April.

Deere said it expects industrywide sales of farm equipment in the U.S. and Canada to be up about 5% this year from 2012, a slight improvement from its earlier forecast that sales would be flat to up 5%. In South America, Deere expects industry sales of farm machinery to grow by 15% to 20%, up from its previous forecast of a 10% to 15% increase. High prices for crops and government financing aid in Brazil have stoked demand for farm equipment in South America.

During Deere's second quarter, its global sales of farm machinery and turf equipment climbed 12% from the previous year to $8.69 billion. Operating profit from farm machinery grew 13% to $1.58 billion, driven by higher sales volumes and price increases.

Meanwhile, sales of Deere's construction equipment sank 6% during the quarter to $1.57 billion. Operating profit from construction machinery plunged 32% to $81 million, as lower volumes and rising expenses for production and overhead pressured profit.

Overall, for second quarter, Deere's equipment sales improved 9% to $10.27 billion, topping the company's projected sales growth of about 4%.

For the quarter ended April 30, the company reported a profit of $1.08 billion, or $2.76 a share, up from $1.06 billion, or $2.61 a share, a year earlier. Total revenue, which includes Deere's financing unit, increased 9% to $10.91 billion.

Analysts polled by Thomson Reuters most recently projected earnings of $2.72 on total revenue of $9.85 billion.

Deere's stock was down 3.8% at $90.21 a share in pre-market trading.

Return to Top

Mahindra Announces April
Sales, Dealer Days Promotions

HOUSTON, Texas, May 14, 2013 — Mahindra USA invites customers to visit their local Mahindra dealers to check out their line of professional-grade tractors and join the Mahindra family during the Dealer Days Sales Event. When purchasing a Mahindra tractor during Dealer Days, customers can take advantage of an industry leading zero percent interest for 84 months financing along with Mahindra’s best-in-class five-year warranty. Mahindra Dealer Days is the perfect opportunity to learn more about Mahindra’s heritage and a relationship with North America that dates back nearly 70 years when Mahindra was selected to build the iconic Willys Jeep.

Supporting the Dealer Days Sales Event is the launch of Mahindra’s new North American national media campaign showcasing the company’s heritage and a revamp of Mahindra’s popular “Lift” commercial that touts the superior performance of Mahindra tractors.  Click here to view new commercials as they are released: Mahindra Television Campaign.

“We are excited to unveil our new advertising campaign highlighting Mahindra’s heritage and superior performance. These ads feature proud Mahindra tractor owners, staying true to our customer first strategy,” said Cleo Franklin, Mahindra USA’s Vice-President, Marketing and Strategic Planning.

“We invite customers to the Dealer Days Sales Events to experience the Mahindra difference first hand. There is no better time to visit their local dealer and enjoy a full service, hands-on buying experience. Learn why Mahindra is the fastest-growing tractor company in North America with the industry’s highest , 97 percent, customer satisfaction rating and highest customer loyalty rating at 98 percent ,” said Franklin. “Customers can see up close and personal why Mahindra represents the best value in the tractor market, period.

Mahindra’s Dealer Days Sales Events run from May 1 – July 31, 2013, and include open houses, customer appreciation and community-building events at Mahindra dealers throughout North America. Customers have the opportunity to learn about Mahindra’s new revolutionary Mahindra Max series, legendary 4025 four wheel drive model, 10 series value-packed cabs, tough and rugged 30 series models, premium 35 series models, top of the line 60 series models and the latest tier IV compliant mPOWER models, all Mahindra Certified “Work Ready,” easy to use tractors, attachments and implements.

Mahindra encourages these events to provide an opportunity for dealers to share knowledge and information to help customers choose the best tractor for their needs. Recognizing the importance of selecting the right tractor for the job, Mahindra offers its customers the exclusive Mahindra Max Guarantee 30 Day Satisfaction Program. This guarantee on the revolutionary Max 22 and Max 25 sub-compacts and Max 28XL mid-compact models allows customers to return, trade or repair a tractor within 30 days of date of purchase if they are not satisfied.

“Mahindra Dealer Days Sales Events are designed to bring our customers and dealers together in a relaxed environment to learn what they need from a tractor and find the tractor that is right for them. We don’t want to simply sell a product to people, Mahindra wants to build a long-term relationship with our customers and their communities to let them know that we will be with them every step of the way,” said Franklin. “These events reflect the Mahindra Rise philosophy of accepting no limits, employing alternative thinking and driving positive change to help transform lives in communities across the world and helping people connect to the land they work, have passion for and love.”

Mahindra became the number one selling tractor brand in the world in 2010 by providing consumers with value-packed, high-quality tractors.  Mahindra is the only tractor manufacturer in the world to win both the Deming Application Prize and the coveted Japan Quality Medal for excellence in Total Quality Management, awarded by the Deming Prize Committee care of the Union of Japanese Scientists.

 Return to Top

Southeastern Management
Now Owns 12% of CNH

Source: Meena Krishnamsetty and Matt Doiron, Marketwatch

May 14, 2013 — During the fourth quarter of 2012, Southeastern Management, a large mutual fund managed by billionaire Mason Hawkins, initiated a position of 1.5 million shares in CNH Global, a $10 billion market cap manufacturer of farm and construction machinery (see more of Southeastern's stock picks). The fund has continued buying stock in CNH, with a recent 13G filing revealing that it now owns 3.7 million shares or a little over 12% of the total shares outstanding.

In the first quarter of 2013, CNH recorded a 21% increase in its earnings versus a year earlier. That is certainly good news, but revenue was up only slightly over the same time frame. It is unlikely that the company will be able to continue growing its net income slowly through improving its margins, and as a result we'd be skeptical about how sustainable this earnings growth will turn out to be unless the top line picks up as well.

Earnings multiples show CNH as quite cheap, with the current valuation placing it at 9 times trailing earnings. Wall Street analysts are projecting that earnings per share will rise modestly over the next several years, implying a forward P/E of only 8 and a five-year PEG ratio of 0.8. A number of other machinery related companies are trading at low multiples in the current environment, which we'd attribute to investor skepticism over macro conditions; demand for construction machinery, for example, is clearly dependent on the overall economy. This is shown by the fact that CNH carries a beta of 2.6.

We are able to see Southeastern's holdings of CNH from the beginning of this year with our database of 13F filings from hundreds of notable investors, including hedge funds. We've also used our database to develop investment strategies; we have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy). Another major investor in CNH at the end of December was billionaire Mario Gabelli's GAMCO Investors, which reported a position of 2.2 million shares. Polar Capital, Manikay Partners, and Ellington Management are also among CNH shareholders.

CNH's peers include Caterpillar, Joy Global, Deere, and AGCO. Trailing earnings multiples for this peer group are between 8 and 12, showing that CNH isn't that out of the ordinary compared with similar companies and financial markets are expressing skepticism on each company. Caterpillar actually had a quite poor Q1, in which revenue was down 17% compared with a year ago and net income fell 45%. With the sell-side expecting a similar level of earnings growth there, CNH might be a better buy than its larger peer. Joy Global's business has been about flat, and once again- despite what is an anticipated dip in earnings over the next year, we get a PEG ratio of just below 1. Deere and AGCO, which focus more on agricultural machinery as opposed to that for construction or industrial functions, each experienced moderate revenue growth in their most recent quarter compared with the same period in the previous fiscal year. Only Deere, however, was able to convert that improvement to the bottom line as AGCO saw a small decline in earnings. Read another take on how CNH measures up to some of these other companies.

CNH and its peers are certainly cheap, though as we've mentioned this is partly explained by the relationship between construction and macro factors. The company does look a bit cheaper than Caterpillar, and with better recent results as well we'd be interested in learning more about the company. Deere might be an even more promising target for future research, however, given its more broadly based improvement in financials and its potential to be less affected by any poor economic news.

Return to Top

CNH Invests $13 Million in New Parts
Facility; Expects to Add 100 New Area Jobs

RACINE, Wis., May 13, 2013 — CNH Parts & Service, the product support division of agricultural and construction equipment maker CNH Global N.V. (NYSE: CNH), today announced plans to invest more than $13 million to equip and lease a new facility at 210 South Enterprise Drive in Lebanon, Ind., in the Lebanon Business Park. Once fully operational and staffed, the new facility is expected to support 100 new area jobs.

Known as the Special Processing Center, the new facility will be the company’s third location in the Lebanon Business Park. The CNH North American Master Depot and its Centralized Receiving and Packaging Center currently employ nearly 500 full-time and an additional 200 contract workers in the area, and serve 11 regional parts distribution facilitiesthat supply daily parts to New Holland, Case IH and Case Construction dealerships throughout North America.

“This new Special Processing Center will significantly enhance and expand the overall capabilities of our North American parts operations,” according to Scott Harris, Vice President of CNH Parts & Service for North America. “Its mission is to provide new and highly specialized services that will help our dealers grow their parts sales, even in the most highly competitive segments of our business.”

As an incentive for CNH to move forward with its plans, the Indiana Economic Development Corporation has offered CNH up to $650,000 in conditional tax credits and up to $100,000 in training grants based on the company’s job creation plans. In addition, the City of Lebanon is providing tax credits of up to $285,000, for a total incentive package in excess of $1 million. The company will be eligible to receive incentives as the new local jobs are filled and investments implemented.

The company’s central parts distribution hub for North America is strategically located in Lebanon because it is within a one-day drive of more than 75% of the company’s North American supply base. The well-established interstate highway system also provides CNH with excellent access to its regional parts distribution facilities in other U.S. and Canadian markets that are critical to the company.

In addition, the Lebanon facilities are just 30 minutes away from the Indianapolis airport, which is home to one of FedEx’s largest operations – a company that CNH relies on to expedite parts throughout the world. A total of 10 major airlines serve the Indianapolis airport connecting to the domestic U.S. markets and international destinations.

“The Special Processing Center will have several unique capabilities, such as a specialized warehousing center dedicated to supporting our import and export operations, and a new logistics command and control operation for our extensive parts delivery system that will now deliver both depot stocked and vendor ship-direct parts via our Daily Stock Order delivery system,” notes Keith Shadrick, Senior Director of Operations and Logistics for CNH Parts & Service in North America.

“We’ll also assemble and package repair and maintenance kits in our new state-of-the-art kitting center, put protective finishes on parts in our new paint booth, and protect parts during shipment with the new facility’s specialized packaging capabilities.”

“We’re excited,” concludes Harris. “We want our New Holland, Case IH and Case Construction dealers and customers to have the best parts and service support in our industry. The addition of our new Special Processing Center clearly demonstrates our commitment.”

Return to Top