In Leo Johnson’s 42 years as a dealer, he says the only thing he can remember that came close to the current uncertainty was following Black Monday in 1987.
A Friday Afternoon Phone Call with Leo Johnson provided insight into what a 4-store dealer with operations and Wisconsin and Illinois is facing today.
Unsuccessful at Pre-Selling Has Its Upside. Johnson says that despite the majors’ emphasis on pre-selling, he and his brother’s 4-store operation has never been good at it. “We’re better at figuring out what to stock and then letting retail programs and customers' appetite come together,” he says. “So instead of how some other dealers might do 12 combines across the course of the year, we’ll get our 12 in 2 months.” The upside for them is that he’s hearing farmers who’ve pre-purchased are highly nervous our talking about outright baling on it.
Auctions Strong. He’s heard that the machinery auctions are running strong right now, including those that are online-only. “Those that built the infrastructure to have a good online presence appear to be doing well,” he says, noting that it wasn’t long ago that 70% of the auction business was done “on the ground” and maybe 30% online--numbers he expects to flip. “These new ways of using technology will be good even in normal times, and that’s a good thing.”
Case IH Response to Situation? Johnson says they’re receiving a pep talk from Racine every other day. The reality of Case IH being so tied to Italy means problems will be unavoidable even in the best-case scenario. He’s got some concern over foreign parts supply. “It’s always the really old or really new part that cause the supply chain issues,” he says. “In a normal year, we might have to wait a week or do 4-day air freight on special parts. But what will this year bring?” To this point, Johnson Tractor has not changed the width or the breadth of their parts inventory but expects to increase its fast-moving parts.
Farmers Will Be Resourceful. Problems encountered in the field and with parts are simply going to take longer to solve. But he’s confident that farmers will solve things, even if it is a service they normally would rely on their equipment dealer to handle. For example, he says, take a farmer who’s planning to run a field cultivator. If there’s a problem in getting going, he’ll may just skip it and say, ‘I’m going to do no-till this year.’ The biggest challenge is always the major breakdowns, but they’re going to figure something out.”
The Next Announcement? He is concerned about what will happen if a governor was to declare shelter-in-place (like Illinois Governor J.B. Pritzker did at 3 p.m. Friday, 3-20 — Johnson Tractor has a location in Rochelle, Ill.) “First is the question of who supersedes the identification of an essential industry like ours. Second, if shelter-in-place goes into effect for 10 days, and the first day is April 10, you can imagine what a big blow it will be for everyone.”
Service Work High. His shops are all busy and his techs are healthy and all at their bays. “In a year where it would be full tilt, we’d really have some touch and go issues. And if we get an early spring this year and nothing else happened, we’d have some real hurt in getting the units completed and back out for planting.”
Employees & Process Changes. Salespeople have been told to stay in the stores and call or do their calling from home. “We’re talking regularly with our staff; our new Marketing person has been keeping everyone informed and engaged. We’re hunkering down, and concentrating on making sure the help is happy, healthy and sane.” He had just finished a staff lunch at the Janesville store. At Janesville location, they’ve posted signs at all exits informing customers to only come through the front door, and yesterday, posted signs informing customers to stay outside, call in and receive curbside assistance.