Mike Lessiter: What were some of the other thing that he had passed on to you that you're running a business and in that way because of those lessons?
Ric Kirby: Probably the most important thing is to take care of your customer. If you're going to tell them you're going to do something, you do it. And one of the first lessons I had of that was, we'd let a customer down, and I can't even remember what the reason was. But it was something I had done or failed to do, and it wasn't anything big, and I talked to the customer on the phone. But when I told my uncle about it, he goes well what are you going to do about it? I said, well what do you mean what am I going to do about it?
He says, ‘well I think you still need to do one more thing,’ and I said, ‘what's that?’ He said, ‘you need to go buy him a box of See’s Candy, and drive out there, and you give him that box of candy, and you apologize to him in person.’ I said, ‘well I already talked to him on the phone.’ He said ‘no, you need to go see him.’ And it was just, it was so minor I couldn't even tell you what the problem was, but I went down and bought a box of See's Candy and drove out to the customer, and to this day, that was probably pushing 30 years ago, to this day I still have a relationship with that customer.
And he even brings it up, that made an impression on him. So, you know, none of us are perfect, and I try and instill that in our sales staff, and our service people and everything else, that you know, those people are relying on you, and if we can't take care of them, then our competitor probably will.
So, we're out there to take care of them, and like I said, we've got a lot of really good people working for our company, a lot of dedicated people. Our service manager Bead Veng, he's been with us for over 30 years now, and when he was on a service truck, the service guys would go through a rotation, because we have a 24-hour on-call line. So Sunday morning at 3:00 a.m., if somebody's feeding their cows and the feed's not coming out of the mixer, they can call and somebody will be out there to take care of it.
You know, help them keep the cows fed. So, one day the, the guys are sitting around and talking about things and Bead brought up that he'd gotten married last weekend, and one of the other service guys said, ‘well wait a second, you were on call last weekend.’ He said, ‘yeah.’ He said, ‘didn't you go out and fix, you know, Joe Smith?’ And he said, ‘yeah I did, and that was your wedding day.’ He said ‘yeah.’ He left his own wedding, and went and took care of a customer, and then came back to the wedding. He's still married too.
Mike Lessiter: It was a manure spreader call that day.
Ric Kirby: He didn't complain, he didn't make a big deal about it, he just took care of the customer.
Mike Lessiter: Wow, that's strong culture.
Ric Kirby: Yeah, yeah. He's a good guy, but we've got a lot of good people like that working with the company, and it makes me rest easy when I'm away from the shop, that I know things are getting taken care of and that people treat customers as their own and the company as their own.
Mike Lessiter: And you're away from the shop a great deal?
Ric Kirby: Yeah, I get on the road quite a bit. So we have our distribution, we do about 50% of our business in California, about 25% of it is the rest of the United States, but primarily in the west, and then about 25% of our business is export. We do have a little joint venture down in Torreon, Mexico, a company called Kirby Mex, and we're partners with the Branja family, and they have a chain of New Holland stores down there, and one of the sons is an engineer, and um, we worked with him in developing Kirby Mex, and he's done a really good job of that down there.
So we'll fabricate everything in Merced, ship it down to Torreon, and then he'll do the final assembly, and then distribute it through his family's tractor dealerships.
Mike Lessiter: Okay. So, you've been exporting for decades now right?
Ric Kirby: Yeah, so, early on, sold a few wagons into Mexico along the border, Canada, occasionally selling something up there. But really kind of what opened our eyes to the opportunities of exporting was in the '70s, Nixon opened up relations with China again, and one of our first big exports was some equipment in the late '70s to China, and we used to build hay cubing equipment, we'd incorporate the John Deere cubing head but we would build all the conveying, metering systems to feed the cuber.
And these were all typical, primarily stationary units, and cubing was popular. We'd developed one that was portable, so they could move it around to different locations in China, but they basically fed it by hand. And I remember I was fairly young, and we had a representative from the company that purchased the machine come over from China. And it's probably around 1978, and he wanted us to prove to him that we could feed this machine, so me and some of the guys from the shop went out to one of the local cubing installations, they brought over a load of dried chop alfalfa sitting there, and we loaded that thing with pitchforks, and ran the cuber for him, and he was satisfied, and signed off on it, and we shipped it to China.
From that point on, then we just started working with other people as leads came on, and relationships developed. But a lot of our export leads came out of the World Ag Expo in Tulare, Calif., we're one of the founding exhibitors of that show, and it's opened up a few markets to us. So, one of our biggest markets is Japan, we sell quite a bit of equipment there each month, and we have one distributor Natsu Agri Service, and they have a sales staff scattered throughout the country, and service staff, and they do a really good job representing our product and they can basically sell you a turnkey dairy.
So they'll sell at the feeding equipment, the feed, the genetics, they can build the milk barn for you, whatever you need. It's a really nice organization to work with. Another big market for us is the Middle East, we deal direct with a couple of the larger dairy farms in Saudi Arabia, and then we also have a distributor, it's a French company called ICS, and they work with our product with other Saudi customers, and other customers in the Middle East. So, we've been into Egypt, United Arab Emirates, Pakistan, we've sold stuff into Australia, the Philippines, Taiwan, South Korea, quite a few places.
Mike Lessiter: Because of the size of the dairy industry in the state of California, does that show in a lot of these foreign dairies come to California to benchmark, and that's how they are seeing—
Ric Kirby: Yes, as time went on as the larger dairy herds became more of the model, the modern dairying model, those herds were developed in the west, because of our nice weather, availability of different feed stuffs, don't have to fight the Wisconsin winters, you know.
Yeah, I'm sure that it's, you know, we would produce more with less, but it was just because of our climate, and the feed stuffs available. But now with the onset of cross ventilation barns and what not, you're seeing more and more of the larger commercial herds in the Midwest as well. But with that being said, our equipment developed as a commercial duty, larger capacity piece of equipment, and that was one of our big advantages over some of our competition, that developed their equipment in the Midwest or Canada, because they were catering to the smaller dairy herds, and they would take their existing design and just try and make it bigger.
Well we developed our design as a larger machine, and could handle the stresses and everything that accompanied with the larger rations.
Mike Lessiter: You can characterize the products that you're in, it's a definable niche, you're very much dairy, haven't gone very far outside of what your core is — at least from my perspective.
Ric Kirby: Correct. We always thought you know, do best with what you do best, and we've used that same philosophy over the years. But it hasn't kept us from looking outside, we distribute Duratech product, the Hay Buster, because it's a complementary piece of equipment to the same customer base that we have. We also manufacture the Easy Rake, it's a silage facing rake.
That was developed by Riverview Farms in Minnesota, and Hanson Silo owns the rights on that rake now, but we've got a licensing agreement, we produce that in the west. So, it's another complementary item to what we're doing. We've done some contract manufacturing over the years, we had some engineers that we worked with and we developed some aircraft maintenance vehicles, and United Airlines was one of our big customers, and we have a contract with them, and that was successful.
In the meantime we started working with British Airways, and we're working on a contract with them. And, the Air Force approached us, and this was in 1997, and we built two of these vehicles for Air Force One. When President Clinton had a little misstep in Florida, and twisted his knee or something, they realized they didn't have a nice way of getting a dignitary on and off Air Force One, because they always had to park it outside away from a terminal, for security reasons, so you always see the president and whoever else going up and down the stairs.
They wanted a truck like the size of UPS trucks, but its scissor lifts up to the aircraft, and it had a nice interior with seats, and be driven in an elevated position as well. So, United Airlines bought them from us to do the maintenance and cleaning of the airplanes in between the turns, so as the passengers are de-planing, there's a cleaning crew coming in the back door, and the driver, the existing trucks would have to stay down with the chassis, and he becomes a wasted motion. Whereas with our design, the driver then became part of the cleaning crew, and didn't have to get out and go up some stairway, and fight in the crowd going against traffic and what have you. The Air Force bought two of these vehicles and set them up for the dignitaries, so they didn't have to come down the steps in the rain, and we've seen it used a couple of times on CNN, first time I saw it being used was when the Afghanistan war started, and the CIA general, Michael Spann I believe his name was killed in action over there, and when they brought his body home, they used our truck for the honor guard to bring the casket off of the transport plane.
So, that made me feel good that, you know, we had a little piece of history there, and we've done kind of off-shoots of that here and there, but always fall back to doing what we do well. And taking care of the dairy business, and some of our opportunities of growth right now have mainly been with the beef industry. And there's a lot of complementary things between our TMR mixers and our bulk delivery units for feeding dairy cows, this flows right over naturally into the beef industry, and we can tweak some speeds and feeds on the machines a little bit to make them work for the different rations.
Mike Lessiter: We’ve got a pretty good cross section listening to a podcast like this, but there'll be a lot of dealers listening in who may not have understood that your company got its start as a dealership in Missouri. If you could just kind of tell us about what you know about the dealership’s history before evolving into the manufacturing.
Ric Kirby: Yeah, so, like I said my great grandfather was involved with International Harvester out of college, and he had made a trip out to California, and enjoyed the scenery and weather out there, and decided to move his family out, and then started looking for opportunities, and started working for a farm supply, and then opportunity came up for developing his own dealership for Minneapolis Moline. He carried Gehl, Fox Choppers, Massey Ferguson for a time. A lot of Allied lines and what not. And, just developing those relationships with the customers, and really strived and instilled the service aspect into our family, and into his sons, my great grandfather, my great uncle.
That was instilled in me as well, so that's a really important part of who we are, is being able to take care of the customer, and I think that's why we've really grown, especially in California. It's because we do work with the customer, we understand their needs, we understand that, they're broke down at 3 a.m. on a Sunday and need to feed the cows that they look to you for help, and you got to be there to help them. We understand the need for profitability on the dealer’s end as well. So, we protect them with the territories and what not, and helped them generate leads, we have staff that works with the dealers, and their sales staff, so they, the salesman, can better understand our product, and help them go out and close deals as well. We've had a long-time relationship, some of our dealers are John Deere, Case IH, some independent, and we've worked well with all of them.
From a small guy that has one service truck, but has a good relationship with the local dairy men, and we partner up with them to represent our equipment, all the way to some of the larger dealership groups like Stotz Equipment, they've been a good dealer of ours for quite a few years, and we appreciate them, and we've been able to help them sell quite a few of our pieces of equipment and a lot of times there's a branded green tractor in front of it as well, so. It's a good-
Mike Lessiter: We've seen your equipment there when we were doing the dealership of the year program with them a few years back.
Ric Kirby: Right. So.
Mike Lessiter: Here in the states, how far does your distribution go?
Ric Kirby: Probably the furthest east on a regular basis we get is Kansas. But primarily the western US. We're cherry picking, looking for new dealer opportunities, but we're selective as to who we develop a relationship with. Most of our dealers have been with us for a very long time, and we look at it as a partnership and want them to succeed with our product, and of course, that makes us successful too, so.
Mike Lessiter: Tell us about some of the history projects that you're working on, on some things that you've found as you're-
Ric Kirby: Oh yeah so, my great grandfather being a Minneapolis Moline dealer, I've always kind of had an interest in some of the antique tractors. My brother-in-law restores John Deere's, and I enjoy the Minneapolis Moline. Got a couple of tractors, the one we have in our parts department, we'll take it to the county fair and parades, and sometimes we've even hooked it up to that original Kirby feed wagon and taken it to some of the farm shows. In that front parts department, that buildings got an old feel to it, and so we're actually putting up an image of our original store front, of the tractor dealership, and we've got an old Minneapolis Moline dealership neon sign.
I've got the dealership clock that was my great grandfather's, it has Minneapolis Moline on it, old price books and some literature and different things that I've collected along the way, and some of it's left over from the dealership that survived. So putting together kind of a little history of the company, and how it evolved over the years and giving our local customers something to look at, whether waiting for the guy to go repair a driveline or bring a bearing in from the back, and that's been kind of a fun little project.
Mike Lessiter: And you've gotten into some bidding wars on eBay for some things. Tell us about that.
Ric Kirby: Oh, it was funny, I was Googling or, searching eBay for Minneapolis Moline things, and I actually found the matchbook cover from probably the '40s that said Kirby Implement Company on it, and it was in South Carolina. Who knows how it got to South Carolina, so I put a hefty bid on it, because I really wanted it, and I was leaving town and couldn't watch the bidding. And when I came back, I was disappointed that I had lost out on the bid and, sent an email to the seller, and told him my story, that I really wanted it because it was part of my great grandfather’s dealership.
And he gave me the email of the buyer, who was up in Wisconsin or somewhere, and I sent him an email telling him this whole story, and I think he was a little skeptic at first, you know. He’s this crazy guy wanting to pay more for some piece of paper. And, I had some other Moline artifacts that didn't relate to our dealership, and so I offered him twice the money, and I would send him one of these other ones that I had, and he took the deal. So I was able to preserve a little bit of Kirby Implement history, and going to, been a little project.
Mike Lessiter: Glad to hear that the Wisconsin folk played ball with you.
Ric Kirby: Yeah but he, again, someone was skeptical of who's this crazy person from California contacting me?
Mike Lessiter: We've gotten into some conversations like this, several people commented you can learn a lot more about a company, learn more lessons through their failures than their successes. If you look back at a really hard time for the company, and it may have been before your day even. What comes to mind and what did you and your company forever learn from that experience?
Ric Kirby: Well one thing that, you know, like any ag cycle, there's good times and bad times. And dairy's not immune to it. And we're in one of those cycles right now. And one thing I learned that my uncle showed me long ago was, we are a manufacturer, but one of our advantages is also being our own dealer in California. So, we take trades, we'll refurbish them, and so we can take our production staff, and move them into service and repairs, because the need for feeding the cattle doesn't go away just because the milk price is down.
And so if they're not buying new equipment, they're having to maintain their existing equipment, because nobody's going back to feeding with a pitchfork, these are herds are too large. So we'll shift production people into service and repairs, and have good, available, used equipment for sale, and also be able to repair and maintain the existing equipment that the dairymen are using and then as things improve, and new orders come in, we can start shifting those people back into production. So, it's helped Kirby Manufacturing maintain a steady workforce, an experienced workforce, and they're ready, and willing, and able to go back to work, whichever side of the business that we need them on.
Mike Lessiter: Was there a time that you can remember, or had your great uncle tell you about where the business had been in trouble?
Ric Kirby: Actually I have personal experience with that. So, company manufacturing started like I said in 1946, my grandfather died in '74, my uncle ran the business until I became involved with it in 1989, and I had inherited some shares from my grandfather, have a sister that had shares, my grandmother, and first cousin. None of them were really involved with the, the day to day part of the business. My uncle, his kids really weren't involved with the company. And so, as he got older, and he gave shares to his children, and it was getting to the point where his grandchildren would start getting some shares, there was a lot of ownership that was diluted that had no day to day interest in the business.
And, so, talking with my wife Dana in 2009, we decided to put an offer into the family to buy the company. And everyone agreed on it, and so we did that. And then the dairy market fell out, so, yeah, went home and looked her, and looked Dana in the eyes and said what the heck did we just do? You know. So we got our staff together, and said ‘hey, you know this is not good, it's not good for our customers, it's obvious there's not a lot going on in the shop right now.’ The last thing I want to do is take all of our problems and dump them on five employees and tell them today's your last day.
So, got the, the staff together and said, ‘we can do this two ways.’ And explained, you know, the last thing you want to do is to lay someone off and tell them that I haven't done my job for being able to provide you a job. I said, ‘things will turn around, I know that in my heart, and we can all work a little shorter during the week, but keep our jobs, keep our full benefits. And we can make this thing work.’ And so we went through a period there where we had some 32- hour work weeks, and everybody shared a little bit less in their check, but we kept everybody employed, kept everybody's health insurance paid, and weathered that storm.
And like I said, we had an experienced work force ready to get back to work when milk prices came back up, and the orders started flooding in. So, we learned a lot during that lean time, and especially right after buying the company and like, we can do this, and, and we did, so.
Mike Lessiter: What do you remember feeling as you were delivering that speech to the, everyone out in front of you?
Ric Kirby: I wasn't afraid about it, because I'd worked side by side with a lot of these people, I'd grown up with a lot of them, learned how to weld from one of them. And like I said it's a real family atmosphere there, we've had lots of fathers and son teams working at the same time. At one point we had three generations of the same family, the son, the father, and the grandfather all working at the shop at the same time. And, it makes me feel good to know that here this man's worked for us for 20 years, 30 years, and he's at home telling his son, hey there's an opportunity there, they've been good to me and it'd be a good opportunity for you.
And one of our employees who's with me today, Jonathan Garcia, his dad Lupe worked for us for 35 years and then he retired. And then he worked another 15 years for us. So, he died a couple years ago, and we still feel his loss, but he retired and he was showing up every day saying, hey, anything for me to do? You want me to deliver a truck? So we put him back to work part time, and let him work as much or as little as he wanted, and he worked another 15 years, and Jonathan, he started in the shop working on the shear, and he's doing all of our purchasing and inventory management now. So, it's a lot of, lot of family stories like that in the business.
Mike Lessiter: So you weren't surprised by the reaction, you knew how they were, they were going to come along, and they were—
Ric Kirby: Yeah, I think, I think there was a little bit of dread out in the shop. And everyone started seeing things slow down, and OK, when's the layoff coming? When I made that announcement, I think it was a big relief for everyone and everyone wanted to jump in and do their part. So, we all survived it together.
Mike Lessiter: That says something, because that's sacrifice for the greater good of the team, all their teammates.
Ric Kirby: Yep, yep.
Mike Lessiter: What does the rest of the U.S. maybe not realize about the California ag market? Take the opportunity to talk to us back east about what California has.
Ric Kirby: I get excited about when someone comes out to California for the first time, or maybe their experience with California has been limited to going on a trip to Disneyland, or a beach in San Diego, and they finally get to the central valley, and they see how diverse the agriculture really is. We have over 400 different crops growing there regularly, and it's just amazing. And I tell people, I can pick a meal from my office to my home, and I know most of the farmers between my office and my house you know.
There's bell peppers being grown on one side of the road, and tomatoes on the other, and sweet corn, and it's almonds, and grapes, and walnuts, I pass that every day. And it's a pretty amazing place. The politics stink, but the rest of it, the rest of it's pretty nice.
Mike Lessiter: Everyone in our industry should get out there at some point, and see what that's like.
Ric Kirby: Yeah, you'd learn a lot, and that's what's really interesting about the World Ag Expo show in Tulare, it's always the second Tuesday of February each year. I tell people, it's really the A to Z of agriculture. From asparagus planters to zucchini pickers, you know, it's all there, just equipment that will never be used in Kansas, you'll never use it in Vermont, but there's some really innovative stuff being used in California.
Mike Lessiter: Well we were out there, we took the staff out there to see the Kern + Camp people, we'd seen equipment we'd never seen before out there, it was, it was cool.
I've had the pleasure of meeting Dana and your two girls Morgan and Meredith, what do you think the future for Kirby Manufacturing looks like in the next 50 years?
Ric Kirby: I plan on working as long as I can, because it's something that I really enjoy doing. My daughters currently don't have any interest in manufacturing, but that could change, or I could someday end up with a son-in-law that does. Or, I might have an enterprising staff member that wants to take a little bit ownership interest in it. So, we'll see what the future holds, but I plan on sticking around quite a bit longer, and the one thing I really enjoy about going to work every day is the staff that we have, the long-term relationships internally in the company.
But, getting out and seeing the customers, and I've made some great friends that also happen to be customers. So it's a win-win.