For Bernard Krone, fourth generation owner and CEO of Krone Company, keeping the company tidy and in the family has paid off in continued success for a company that has been filled with moving parts throughout the years — from agricultural machines to commercial vehicles. Focusing solely on hay and forage equipment today, its North American operations are based out of Memphis.
Below is the full conversation between Farm Equipment editor Mike Lessiter and Krone.
Bernard Krone: My name is Bernard Krone. I'm fourth generation owner of the Krone company. I'm 40 years old and I'm married, I have two kids, and I’ve now been with the Krone company for 11 years.
Mike Lessiter: I know that this will be difficult to encapsulate, but I would like our listeners, our readers to get an abbreviated history of the company going back you know, four generations.
Bernard Krone: Of course, to go to every detail would be a little bit too long, but our company now is more than 110 years old, and we started in 1906 in Spelle in a small village, near Osnabrück, west of Germany. My great grandfather started as a blacksmith, and the whole family worked as a company, so to say. My great grandmother ran the farm, and a little beer pub, which we had besides as a blacksmith's workshop. Then, when second generation took over, my grandfather already manufactured small farm machines, tillage equipment, these kind of things.
The company continuously grows after the second World War. And then in the '60s my father took over, so generation. And under his leadership of course, as a company, we had the fastest and biggest gross in history. And, we also went into the commercial vehicle business. We are now Europe's second largest manufacturers of commercial vehicles, trailers, re-fill trailers, semi-trailers, all these kind of things.
I took over 11 years ago and we’re still on the good way. You know, every generation change has certain danger and challenges but I was trained by my father — what are the upcoming things and what are the upcoming challenges. So far, I really enjoy that.
Mike Lessiter: As a young boy did you know that this was the dream that you wanted to pursue?
Bernard Krone: Yes, I think so. Sometimes I say I wanted to be a circus director. Sometimes I also feel I am one. Of course, there were times when maybe some teachers were complaining about my behavior, then I said, “No. I don't want to take over the company,” but deep in myself I always knew I that's the only thing I want to do.
After my apprenticeship, I worked In Dublin, with all our partner there, Farmhand, as a farm machinery mechanic. A couple of months in the workshop and then in the field as a service mechanic. I worked on our first Combi-Pack in Northern Ireland, close to the sea. It was really nice. Good time.
Mike Lessiter: That must leave an impression that you were a mechanic, with all the dealers that you travel around to that you know...
Bernard Krone: Yeah. You know when I showed up there and they of course, in the first weeks, I was with another guy, and in the last couple of weeks on my own. Of course, some of them already heard that Bernard Krone is driving around as a service mechanic and I'm pretty sure that some people got a phone call before I went there, but some were looking really surprised when they heard my name, from Germany, and, “Do you have any relations to the company Krone?” They were... Yes, um… But I think they knew already. I'm not sure, but that was a good time. I really had fun. I enjoyed it very much. And then I had my military service and then I came to North America. I think it was summer of 2000.
Mike Lessiter: In the history, if I have the story right, both your father and your grandfather were put into the role at a pretty young age due to death in the family.
Bernard Krone: Yes, that's correct. My father had to take over the whole responsibility at late 20s. His father died in 1970. I think he felt a lot of pressure, these days, but he managed it and it was the same attitude like his father — tried to convince everybody to follow him, the employees and the customers. My father always said that we have very loyal customers and partners in the world.
Mike Lessiter: Question about where you are today in the products segments that you serve. Tell our readers, our listeners what products segments you define yourself in today?
Bernard Krone: I would say we are the only hay and forage specialist in the world. We are really specialized on hay and forage equipment. So that, I think that really just describes quite good who we are and what we do.
Mike Lessiter: That has served you, you very well for quite some time, that those will be the boundaries in which you pursue growth will be in that area?
Bernard Krone: I think so, yes. You already know that we manufactured also tillage equipment and these kind of things in the early days, maybe until the mid ‘80s. But we figure out to specialize on one product category like the hay and forage equipment. It gives us a much better position to really focus on something and have good ideas, good innovations, and also how we can serve the customers. And I think focusing on something like that is — especially in the farm machinery business — very important and for us. It turned out to be very good.
Mike Lessiter: Tell us today the turnover, the employee size — the size and scope of the company in 2018.
Bernard Krone: Yeah, we just finished our financial year by the end of July. So all facts and figures of are still pending, as you know. We will reach a turnover around $2.5 billion U.S. in total in the group. Uh, uh, Like always, profit is not good enough, but on a reasonable level. We invested a lot in the last couple of, of months, so in the last 12 months. We opened up our new spare parts department, our new spare parts storage for the trailer business. We also invested in our new paint works, which will be opened in August this year, so in the couple of weeks.
This paint works is the new investment around 40 million euros, which will help us to increase even more our quality in paint and everything, which is very important for us. We have around 6,000 employees, including rental and part-time workers, and apprentices and students. We mainly work out of six factories. Five of them are factories for the commercial vehicle business and one is a factory for farm machinery. But in the farm machinery factory we also work with partners. So we have machines coming from East of Europe and Canada, which are exclusively made for Krone.
Mike Lessiter: Okay. So those figures are just the farm equipment and the commercial truck, not including the dealers side, is that correct?
Bernard Krone: Right, just the commercial vehicle business and farm machinery business...
Mike Lessiter: You have been there 11 years. What did the company look like 11 years ago in terms of revenue and employee size and...?
Bernard Krone: When I started we had a turnover around… I think it was around 1.1 or 1.2 billion euros. But we were in a period where the growth was very fast. You know, we had this economy crisis in 2008, until then, as a company growth, quite good. I think we had a turnover in, in ’07, ’08 about 1.4 billion euros, which was also the highest record, since then. Then the turnover dropped due to the commercial especially the commercial vehicle business center and the problems during the economy crisis. But, you know, we have overcome that situation and I think today we are even stronger. So, I just talked to our CEO, Mr. Fir, he said he's now been with the company 15 years. And when he started, the turnover was around 400 million euros.
So you can see 15 years ago, it was 450 and 10 years ago it was 1.4 or something like that. We had a really good growth period between 10 and 15 years ago, especially in the commercial vehicle businesses, very fast.
Mike Lessiter: Mm-hmm. In terms of percentage, how much of it is equipment, versus commercial?
Bernard Krone: You can say, more or less, two-thirds our commercial vehicle business. And one sort is a farm machinery business.
Mike Lessiter: Mm-hmm. Okay. In what year did you get into the commercial vehicle business? When did that start?
Bernard Krone: 2007. Yeah. 1st of January of 2007 I started in Denmark in our factory for refill trailers.
Mike Lessiter: I wanted to talk about the decision to exit the tillage, which must have been a difficult decision for some at the time, for probably your dealers, customers, but it sure looks like it was an act of brilliance, of genius looking back at what happened. Could you talk about that?
Bernard Krone: I think the decision was very hard for my father and at that time, Heinz Krone, his cousin... Because the turnover was, I would say one-third of the company, who were most quite important. We had a lot of people working in that particular area, we had a long history — tillage equipment, more or less, was the first equipment we made. The costs were quite high. I think it was, as I said, one or one-third of the turnover, but maybe 50%, 55% of the cost.
I think the decision was out, but they made it, as I talk to all the customers, to the partners. They told them why they had to decide this and that they want to focus and that they have good ideas in balers, in machinery for the future, related to the hay and forage sector. So, I think every partner, every customer could understand quite well why they have taken this decision. They stick with the company and together they were quite successful.
Mike Lessiter: And that was shortly after the wall fell?
Bernard Krone: I think that was, yeah, late ‘80s or early ‘90s. Yes, that's correct.
Mike Lessiter: It's interesting to me because it was, uh, just recently here we're interviewing Michael Horsch for the program. And he had said, had the Berlin Wall not fallen, he would likely have not been around today.
Bernard Krone: Yes.
Mike Lessiter: Because, if I have the story correct, it's so that that brand of tillage, passive tillage, was something that you decided not to pursue.
Bernard Krone: That was long before I stepped into the company and I was really involved in decisions. But, I think Mr. Horace is much more specialized in what he's doing, and he has a lot of know-how. You know, we did seeding equipment, we did plows and I would say, easy tillage equipment, so to say. So, that was probably not the size, maybe the customers and later on, in the eastern part of Germany need it.
Mike Lessiter: Mm-hmm. Exiting those segments allowed you to deeply pursue what was coming in the mid '90s with the square baler, the BiG M, and the BiG X?
Bernard Krone: Yeah.
Mike Lessiter: Could you talk about the freeing up of the capacity to pursue those things?
Bernard Krone: I'm not sure if we would have produced something like the BiG M without getting rid of the tillage equipment. So as you said, and that really gave us free space in the development department to think out of the box. Yeah. What can drive the turnover and the development of the company in the next years with our tillage equipment? Where should we go? Which way? What is the right way? What is the development of our customers as they're getting bigger? We have more and more contractors and these kind of things. So we should focus on machines, which is also getting bigger and going in that direction, yeah.
I'm pretty sure that opened up everybody, because I said, “Okay, now we have to do something. Everybody is looking on us, everybody thinks when you stop a product line, you could lose turnover, you lose, customers, maybe the company is going down, whatever. Now we have to show everybody that we are still here, we have a lot of good ideas, and we go on and we are ready to grow.” And, I think everybody in the company had that feeling. Not only as the managing directors or my father or the leaders, everybody, I think, in the company. Especially the engineers also…
Mike Lessiter: It’s reminded me of a quote I really like from, Anna, your great grandmother, who talked about when your great grandfather had got rid of the debt.
Bernard Krone: Yes.
Mike Lessiter: And it did go, to toast to schnapps and she said…
Bernard Krone: Don't be a fool. Small people like us, they have to have a certain debt. Otherwise, they cannot grow, or we cannot become bigger. My father told me very early about that. I heard this story very often.
Mike Lessiter: It's a great story because it's, it's kind of like we're putting our chips on the table, we're going to grow, we're not gonna be satisfied.
Bernard Krone: All in. That's right. Yeah. We have to take a certain amount of money, to grow, to do something new, yeah. And, and that to have the possibility that we can get bigger and bigger. It was always important.
Mike Lessiter: Mm-hmm. We'll have some listeners, we'll have some old timers who've been around a long time. We'll also have some newer people listening to this who maybe don't understand how big the ‘90s were and how your company came in and did some things never done before. Trace some of the greatest product developments that had come during that time.
Bernard Krone: You have to understand where we came from. I just said we made tillage equipment and we made tedders and rakes and mowers for farmers. And then we had somebody in the company, at the late ‘70s already, I think, who developed the first round baler for us. And my father was not even sure if we should manufacture this round baler by ourselves, or should we sell it to somebody. So we talked to John Deere and they had already a baler, I think a belt baler at that time and they said, “No, we, we don't need another baler.”
And then my father said, “Okay. If nobody wants it, I really like the design and everything, we do it on our own.” After 25 years, they were number one in Europe with this round baler, and this is a really big success story. That showed everybody that also all employees in the company, that also was new products with totally new things we can achieve, also a great success.
In 1995 they introduced the first square baler. Also, at that time, we talked to John Deere about maybe doing a distribution or something like that. And that time, they said, “Yes, we want to do that.” So we worked together for a couple of years in the mid and late ‘90s. But that was not a big success. From today's perspective, I have a feeling that maybe it was not designed by John Deere or not developed by John Deere so they maybe were not really into that business or not interested in enough.
So that was not a success, but we were going on and we've developed new things, and then later on, we had the HDB technology, the high-density baler. That was very much needed by, especially by professional customers, contractors, or maybe mushroom farmers, all these kinds of things, in Germany and in Europe. And today also around the world, we have a market share in Australia of nearly 50%. At the moment we have a market share in Germany of 40%. So, the large square balers are really a very good product and, and one of our most important products.
And then, late ‘90s we introduced the BiG M, the first self-propelled mower conditioner. In the early 2000s we introduced our first forage harvester, the BiG X. And in the coming years, also the biggest forager in the world, with more than 1,000 horsepower. That is also quite an interesting story. Of course, we learned a lot especially in the first years, we had to learn a lot about how customers operate this machine, what do we have to care about and what is the most important thing and maintenance and all these kinds of things.
But we were always listening. And that is what, I still, until today, the customers appreciate about our company is that of course, there are always problems in business, everybody has that, every manufacturer, every dealer. But the Krone company always wants to listen and we take care about it and then we find a solution. That is a very important issue about our business.
Mike Lessiter: And during that time you also built your own corn header, right?
Bernard Krone: Yes. I had the feeling, you know, I just can't tell you how my impression was and when I heard later on. For my father it was very important that when he was introducing our own forage harvester that we do not have to rely on one of our competitors regarding the corn header. So he said when we have a good forage harvester we also need to have a good idea on the corn header.
Without our own corn header, there won't be any forage harvester. So it was clear from the very beginnings that we need both together, that we do not have to rely on any competitor. Because he always felt that that has a certain danger. So that was very important.
Mike Lessiter: That was a very busy time for the company it sounds like.
Bernard Krone: Yes. Always busy times. You can't, you can't stop running.
Mike Lessiter: And so, you initially came into the United States in the ‘70s through a partnership with two other manufacturers?
Bernard Krone: Oh, that was before I was born. So probably Rusty is the one who can explain much better, but just with a few words. I think it was very important for our company that we came to the United States. Especially my father says today, my great grandfather always wanted to be in the United States. Because he said, well, at that time, United States is the most important and biggest agricultural market in the world. If you want to be successful in the world we have to be successful in the United States.
We started with two other manufactures. I think they are all not existing anymore, more or less. I think we had a good team to start. Rusty Fowler stepped into the company at a very early stage. That was also very important, we had a good team, we had a good leadership. We had, I think, step-by-step, we also had the products for the United States. Of course, it took a while until everybody in our company had, you know, realized that we're not only selling machines maybe in our neighborhood in South of Germany, that we also sell maybe machines to California where the harvest is much earlier, you know. There's a story which we sometimes laugh about that somebody from the United States called and said, “Hey guys, we need the machines very bad harvest starts soon.” And the engineer stands on the phone, stands up and looked out of the window and said, “Hey, listen. The grass is not even growing. What is the problem?” Yeah. We still have snow or something like that.
Today you can smile about it, but of course, we had to learn a lot that the regions are different, and the climate is different, and the customers are different, and the needs are different. I think going through this process was very important for the whole development of our company. And today I think we, together with our team, we have a very good knowledge about the market, about the North American market, about the customer needs, and I think with our machines and service and also spare parts, we really can fulfill all our customer needs very good.
Mike Lessiter: Back then, it was set up in New Jersey and it was... I saw the logo last night and Joel Braddock's retirement gift. It was a Krone Mengele-Niemayer was that the original?
Bernard Krone: Yes.
Mike Lessiter: Okay. And so, in 2000 it became a wholly owned subsidiary of Krone… When did your family tap Rusty into this role here in North America?
Bernard Krone: Rusty, well, in 1986.
Mike Lessiter: Tell us about the North American operations, Memphis, what you have here and the support that you have for this market.
Bernard Krone: For me, the United States always was a very interesting market. As a young boy, I always loved to join my father when he went over to the United States. But he always said I'm too young, I'm too young and so, I had to, to go with my mother on ... You know, I'm a little bit younger than my two sisters. They are 8 and 10 years older and I was always the young boy and I had to go with my mother, on the island in the northern sea for vacation. And my sisters and my father, they went to the United States. At that time, I was a little bit angry. Today, when I look back, it was a great time. But I always wanted to come to the United States. It was always a big dream. And then age 16, I followed my father on one of his office trips. I think I met Rusty. We met I think in Birmingham, Ala. That was my first trip to the United States. And then we went by car to all other different places that we visited. Memphis, I think at that time, it was still West Memphis, Ark.
We visited Illinois, Chicago and, and it was really a great time. And I always had the feeling that the U.S. market is something special. And also today, we, the United States or the North American market in total is our biggest market besides Germany. It is still the most important agricultural region in the world. I think with our headquarters in Memphis, with our subsidiaries in Reno, Nevada, our West Coast center, and with our own locations in California and Idaho. And Wisconsin? In Wisconsin, we have really good locations and we have a good team. I think they have a very good knowledge about the service and training and spare parts and our machines, help supporting our customers. And, I think we now have run about a hundred employees here in the United States, which is the biggest workforce, as a sales and service organization, outside of Germany. So, that shows the importance of this market.
Mike Lessiter: How much growth exists here for you in the U.S.?
Bernard Krone: Of course, we know that, that we have some strong and good American and U.S. competitors. The growth potential is still very big. We have a good market position in mowers, tedders, and rakes. We have a really good position in square balers. I think we also have a good position in the forage harvesters. Of course, we have growth potential, we knew that there are strong competitors who have been also quite long in the U.S. market.
I think we also could have more potential in our round baler segment. I think the round baler is good but we have the European bale chamber measurements, which do not fit 100% to the U.S. market, we know that. We talk about it a lot. Maybe there will be some changes in the future. We have to wait, what our next generation will look like. Maybe that is a good potential for us for the future. Yeah.
And so, we have good market shares in many of our product categories, but also you always still have potential to grow, of course.
Mike Lessiter: Mm-hmm. And you have the mix, you mentioned your own company store locations and you have about how many dealerships you're covering?
Bernard Krone: Yes, six owned. I saw it how many dealers, independent dealers we have four hundred.
Mike Lessiter: One of the things I wanted to ask about you personally. You were born in ’77. What are some of your earliest memories and some pivotal moments that your father taught you, that you are using to run the company today?
Bernard Krone: “Be good at school,” he always said. You know, when I was in the first years in school, I was not so much in learning. You know, I enjoyed school, meeting friends, and playing on the schoolyard or maybe play after school or something like that. But he said, I remember that, “Please, Bernard. You also have to learn. Because otherwise, I don't need you in the future for running the business.” And, you know, that, sooner or later that reminds me also, okay, I have to learn something. And then at some, at some stage, I got to the turn and then I was… Later in school it was quite okay. So, I was never the best but I knew how to go through with some good values.
I remember that very early that I really enjoyed going into the factory. You know, I've grown up in Spelle next door to the company.
Mike Lessiter: Well, literally next door, right?
Bernard Krone: Yes. Literally next door. Um, I really enjoyed the, to go there, uh, talk to the employees, talk to the workers, go through the factory, play there at the weekend, driving a, a forklift truck or something like that. So that from a very early stage that was, I would say my favorite place to be, beside home.
Mike Lessiter: And your grandfather died before you were born.
Bernard Krone: Yes.
Mike Lessiter: I know it's different when your name is on a building like this, that it's very personal and, and I'm sure your dad and his dad before him were making sure that you live by certain values and core tenets, were there certain other things that he may have made sure that, uh, through repetition got into your head about what it means to be leading this company with the name on the back?