If you’re familiar with the development of the big square hay baler, you’re likely familiar with Earl Livingston. The founder of Livingston Machinery Co. based in Chickasha, Okla., retired July 1, 2016, after 43 years in the farm equipment business.

Livingston started on the ground floor of the large square baler business by selling and servicing these units across 15 states, a territory that was beyond the scope of most dealers. Feared, but respected, by many competitors and widely loved by customers, today Livingston is “trying” to gear down, travel and spend more time with his grandkids. He’s passing the torch of the expanding dealership to the people he’s hired through an employee stock ownership plan or ESOP.

Learning to Be a Dealer

Like so many successful entrepreneurs, Livingston’s background included a humble beginning, hard work and fierce dedication to a product and its customers.

Growing up in Gould, Okla., with three siblings, his father drove a propane truck, and the family struggled to make ends meet. When he was 8 years old he begged his parents for a push lawn mower and his dad eventually bought one. That day his dad placed two jars on the kitchen table, one for him and one for Earl. He told Earl to put half of his lawn mowing income in the “Dad” jar until the lawn mower was paid for, then after that, he could keep all of whatever he earned, saying “I’d like to buy that for you, but I can’t.” He spent the summer cutting grass and, before the end of the season, paid his father off and became the sole owner of the mower.

In his college days at Southwestern Oklahoma State University, he went to school full time while working 52 hours a week. Livingston says the experience prepared him for what was to come. “I’d get off at 11 o’clock at night and had a class at 8 a.m., so I had to do my homework after work and before class. That was good training for the hay business.”

As Livingston prepared for graduation, the placement office arranged two job interviews for him where he could utilize his accounting degree and love of agriculture. One was with Case Corp. and one with John Deere.

Growing the Dealership

Without Earl Livingston managing the store, Chickasha Tractor and Equipment floundered and eventually closed down a short time after he left in 1987. Meanwhile Livingston searched for a new equipment line, but with his limited net worth, he was passed over by both New Holland and Case.

After writing what he calls “a heartbreak, tear jerk letter” to officials of Hesston, that company decided to take a chance on him in 1990. Two years later he was able to purchase the facility of Chickasha Tractor, which today is the flagship store and home base of Livingston Machinery Co. He added a store in Fairview, Okla., in 1996, one in Altus, Okla., in 2007, bought out Earl Ladd & Son in Muleshoe, Okla., in 2014, and opened a store in Stillwater, Okla., in 2015. In early 2016, the dealership purchased the agricultural operation of Warren Cat, and opened a store at Dalhart, Texas.

The Deere interview led to a promise for a call back within a week, while Case offered him a position on the spot in Elk City, Okla., which he accepted. Later, as manager of the Case company store in Paris, Texas, Livingston started receiving phone calls from the owner of Chickasha Tractor and Equipment who wanted him to manage his store. As the offers sweetened, Livingston finally agreed to an interview and was hired as manager there in November of 1979.

Impressed with Square Balers

His first exposure to a large square baler was at Hesston’s initial product introduction. “I was so impressed with the first big baler that I ordered 5 that day, without consulting with the owner.” The owner was less impressed with what he called an “albatross,” but Livingston sold those 5 the first year, 11 more the following year and thousands more since then.

In 1987, after 8 years of managing Chickasha Tractor, Livingston branched out on his own with his wife and shop manager in a 50 foot by 100 foot building, and Livingston Machinery was born. Without a major line, he purchased $100,000 worth of parts from another dealer and began to buy, sell and service used square balers and self-propelled windrowers.

A big part of Livingston’s success in the big baler business came out of absolute necessity. “I learned a long time ago, that because we weren’t a Deere or Case dealer, and didn’t have a mainline tractor to sell, we were going to have to be different than most dealers to be successful. So I serviced a niche of the business that nobody else wanted. I went after the 24 hour hay customer and we totally built our business on around-the–clock service. We found that a lot of customers loyal to Deere, Case, Ford or New Holland, who we’d never sold anything to, were receptive to us.”

Being a pioneer in the big baler business led to more opportunities for Livingston. “As they started catching on, a guy in the San Luis Valley, for example, or the four corners area of Colorado, would go into a dealer thinking he wanted to buy one, but found he couldn’t afford a new one, or they didn’t have any. We were able to sell in a wide area because we always had reconditioned used machines in stock.

Specializing in Service

“Then, when some of those guys called later and would want a new one, I’d say, ‘You ought to get that close to home where you could get parts and service.’ The truth of the matter was, even though the local guy might be a good person and a good dealer, he’d never geared up to service the big balers and they didn’t have any parts or people who knew the product. We’d end up having to go and pre-deliver it and get it working properly.

“We’d sell a used baler in one of these areas and a lot of times it would make prettier bales and tie better than the new ones from other dealers,” says Livingston. Word spread and soon Livingston was getting calls to tweak balers sold by other dealers. “So we made the decision that, if we were going to have to service them, we might as well sell them and we geared up.”

Livingston started out with a 14 foot by 5 foot mobile homemade stock trailer for in-the-field customer service. The fleet has since grown to include three gooseneck mobile shops, fully stocked with parts and equipped with cranes that stay out in the field throughout much of the year. Technicians driving the new service trailers require CDL licenses and must maintain DOT log books. In hay season, two-man crews stay out in the field 2 weeks at a time before being rotated back to their home store. Parts are shipped via UPS daily to replenish supplies.

While Livingston has added staff over the years to handle the calls from those baling overnight, it’s hard to imagine how intense the first few years were when big square balers were new and when he was just getting started. Part of his success can be attributed to his work ethic. The fact that he doesn’t sleep much also helped. “I never go to bed before 12 or 1 a.m., ever, 7 nights a week,” Livingston says.

“I get up between 4:30 and 5:30 every morning and my phone rings between those times. We used to average 10-15 customer calls a night, nearly every night, during hay season.”

‘Call Anytime’

Those calls were actually welcomed and encouraged. Livingston says he gave out laminated cards with dealer personnel home phone numbers, and later cell phone numbers, to all customers. He urged them to call anytime they had an issue including overnight and on weekends.

He would challenge customers shopping between him and competitors to try to find the phone numbers of other owners, some of which were unlisted, and guess who would provide better after-hours support. Because of the customer commitment, Livingston was able to command a premium for his products without talking down competitors.

Livingston estimates that he’s sold between 1,500 and 1,800 big square balers, new and used. The dealership became so experienced at reconditioning used balers that they could offer a one-cutting or 1,000 bale warranty, covering parts and labor, on used units they sold. Performance on older Livingston-serviced balers often exceeded newer balers sold by other dealers with less big baler experience. Customers came to recognize this special service and expertise.

Livingston’s market share in self-propelled windrowers once caught the attention of a major competitor and they targeted the area with special discounts for their dealers. Livingston tried to compete with them by matching prices and quickly found himself with high dollar trades that were basically unsalable, so he took another approach.

He would let the other dealer put too much money in the trade, and then he would swap the customer’s brand new competitive machine even up for new Hesston equipment. By approaching the challenge that way, there was still a small profit to be made for the dealership. A dozen trades later, the bounties went away and the ground was again leveled. This is a story that Livingston takes great pride in telling.

Passing the Torch

Shawn Skaggs started in sales at Livingston Machinery 15 years ago, after graduating from Oklahoma State University with a degree in animal science. A former Cargill territory manager, he has a farm background raising Simmental cattle, wheat and hay. From selling rural lifestyle items, like compact and utility tractors and attachments, to developing advertising programs, to putting together a website and updating software, Skaggs’ ability to multitask was noticed by the owner. He became manager of the Chickasha store in 2007 and executive vice president and chief operating officer over all the stores in 2013.

While Livingston’s forte was selling and motivating employees, Skaggs brought additional management capabilities to the table. He developed systems to enhance departmental profitability between stores, improve service absorption rates and increase parts margins. Through his efforts overall corporate profitability improved, which has proven to be invaluable as dealership expanded, especially with acquisitions.

Becoming an ESOP

Today, Livingston Machinery is employee-owned through an employee stock ownership plan (ESOP). That was started in 2008 after Livingston suffered a slight stroke and realized that if something happened to him, the dealership was in no condition to continue. A local banker led the dealership through the process of forming the ESOP and plans progressed for a strong dealership after Livingston retired.

Skaggs says employee ownership has been key in motivating the dealership’s staff to change the culture of the business. “In a non-ESOP, employees assume the boss is getting rich, whether he is or isn’t, and their main focus is taking home a paycheck. It took a little time for employees to realize what the annual statements mean.

“At first it was just a piece of paper with some numbers on it. As time went on, they realized that the program would have real potential to help their retirement and that they would see money out of it someday. Now, they’re not only watching their actions to make sure the business makes money, they’re also watching what their coworkers are doing.”

Once the employees figured out they owned the company, another problem arose that no one saw coming. They all wanted to know where the company stood all the time.

Skaggs admits, “We have to communicate better. When one person owns the business, employees don’t ask, ‘How are we performing?’ ‘How does the profit look?’ or ‘What’s the company worth?’ Now that people have realized that it’s their business, they want to know these things, so you have to communicate on a regular basis. Especially when we’re in the middle of hay season or wheat harvest, it’s hard to find the time to communicate. I have to remember that these employees are my customers too, and I have to get better at that.”

Slowing Growth in a Down Market

With the downturn in the cattle market and falling oil prices, Skagg’s says he doesn’t see any additional expansion for the dealership in the short term. “We’ve added a lot of people really fast, so we have to focus on getting our culture instilled in all those people and make sure we’re providing the same level of customer service at the new locations that we were at the old dealerships.

“We have to make sure that we protect our reputation and that we’re meeting our customers’ expectations of us before moving forward again. I could be proven wrong, if there’s an opportunity that’s too good to pass up, but I don’t foresee it.”

Both Livingston and Skaggs agree that the ongoing challenge for the dealership in the future will be maintaining a personal touch with customers while expanding and adding new personnel. “We need to have a ‘corporate’ attitude about our management and finances, but never forget it’s the customer that got us where we are,” Livingston says.

He also has some parting thoughts for the farm equipment dealer community. “All the manufacturers want large multi-store groups, but you can’t forget that people don’t buy from buildings. They buy from people. It’s important to have a good image, but at the end of the day, the customer is going to buy from the dealer who offers a competitive product, has parts sold by knowledgeable people, technicians that know how to make their balers perform night or day, and treats them with respect every time he sees them.”

Livingston will remain as chairman of the Livingston Machinery board of directors, but will no longer be coming to the dealership on a day-to-day basis after July 1. While he plans to spend more time with his family time, he also uses the equipment he’s been selling, harvesting over 6,000 3 x 3 square bales a year and around 2,000 round bales to feed his herd of Angus cattle. He and his wife Sharon also plan to travel for pleasure in some of the areas where Livingston has sold equipment and visit customers while also doing some “sightseeing.”

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