While driving to St. Louis in early January for the Precision Farming Dealer Summit (dealers) and National No-Tillage Conference (growers), the news broke that Deere and the American Farm Bureau Federation (AFBF) had signed a memorandum of understanding (MOU) on right to repair (R2R).
The MOU “ensures farmers’ and ranchers’ right to repair their own farm equipment.” My initial response was nonplussed. The MOU was already consistent with the commitments Deere, other farm equipment manufacturers, as well as the manufacturer and dealer associations made previously.
It does drill down more on what is available to the customer and suggests the Deere diagnostic tools will be available to competitive dealers not just independent repair shops.
“I understand why Deere did it. Obviously, they’re the target; they’re the ones getting sued everywhere. I think they reached out to emphasize this fact that, look, this is available,” says Kim Rominger, president and CEO of the North American Equipment Dealers Assn. (NAEDA). “And in that respect, I think it’s a good thing. I don’t think it’s being taken well by the other side.”
One Case IH dealer told me the MOU was meaningless. “Looks more like a political stunt than anything,” he said. “We have the same position as before; we offer an Electronic Service Tool if a customer wants to buy it and use it.”
The National Farmers Union isn’t impressed by the MOU and says it will continue to call for R2R legislation. The group said the deal “is riddled with potential loopholes that the manufacturer could use to deny farmers repair access.”
Most of the concerns I’ve heard from dealers still focus on warranty, trade-ins and liability, and to some degree the ease by which dealer-trained technicians could leave to pursue the independent route, perhaps unaware of what lies ahead. But it doesn’t seem like any dealers are concerned about their customers actually fixing their equipment. Plenty of them are already doing it.
Take Tom Nobbe, an owner of the 27-store Deere group Sydenstricker Nobbe Partners. In a point/counterpoint article he wrote on the topic for Farm Equipment, he notes that “Through the years, our parts sales over the counter to customers and independent repair are consistently well over 50%.”
The concern is that customers want to bypass emission controls to increase the horsepower of their equipment — a violation of EPA emission regulations. Dealers are obligated to return any equipment they get to EPA emissions standards. That’s going to impact the dealers’ bottom line when it comes to trade-ins. The reconditioning costs to return a unit to factory standard that meets EPA standards will be higher.
Rominger notes the used value of equipment’s going to go down dramatically. “I can see an effort to start a CARFAX-like report on every machine to identify modified machinery. And that identification would hurt the used equipment value. I’m not sure the customers want that done, but I see that as a way this is going if they get what they want.”
Has anything changed? Are we done talking about R2R yet? Most certainly not. If you’ve never before participated in NAEDA’s Fly-In, I encourage you to participate in late March. While Deere’s MOU with AFBF is one step toward settling the argument without legislation, other parties say it’s not enough and are doubling down in their calls for legislation. It’s time for dealers to voice their side of the story, too.