Making Precision Profitable
In today's newscast we look at management changes at New Holland, how close Deere is to its sales goal of $50 billion by 2018, AEF's new wireless in-field communication task force and dealers' outlook on used equipment inventories.
On The Record is brought to you by GBGI Inc.
GBGI Inc. has been developing hubs and spindles for the agricultural industry since 1997. Their product offering includes IDA-X, the hub assembly with a robust design and ductile iron construction that substantially increases the load capacity and impact resistance compared to conventional fabricated welded assemblies.
I'm managing editor Kim Schmidt, welcome to On the Record. Here’s a look at what’s currently impacting the ag equipment industry.
AFN: $48.18 -1.72
In a letter to dealers on June 8, New Holland announced Abe Hughes, vice president of New Holland North America, had left the company to pursue interests outside the company. Hughes had led New Holland since mid-2010.
In its official statement on the matter emailed to Ag Equipment Intelligence, the company said:
“Abe Hughes had a significant impact at New Holland over the past 8 years, but is no longer with the company as he has elected to pursue other interests outside CNH Industrial. We wish him the best of luck in his next role.”
One dealer we spoke with said he thinks the change could be a positive move. “Our New Holland organization and dealers, though experiencing growing sales, have had low morale for awhile. Abe took us back to profitability, but he has been unable to significantly move the stick on the organizational climate.
“I think finding the next leader from within our organization, one who understands the challenges dealers face, who has some institutional knowledge and will not repeat past mistakes, and one who has a strong bond with our dealer organization could be a real positive for both the New Holland brand and our dealer organization,” said the dealer.
Dealers on the move this week includes Koenig Equipment, L.F. Trottier & Sons, P. Bradley & Sons, Kibble Equipment and RDO Equipment.
This past Monday, Koenig Equipment, an 11-store John Deere dealer, announced the opening of a new Greenville, Ohio location. The new facility is 5,000 square feet larger than their previous Greenville shop, providing a more serviceable showroom.
Also on Monday, another John Deere dealer with 2 stores, L.F. Trottier & Sons, announced relocation plans for its White River, Vt., shop, moving to a Hartland, Vt., facility 15 miles south. The move will provide the dealer with 4,200 additional square feet, allowing for a more customer-friendly setup, says the company.
On June 23rd, specialty equipment dealer P. Bradley & Sons joined JCB’s North American dealer network, which will culminate in the opening of P. Bradley JCB, a new dealership in St. Harrisonburg, Vt.. The expanded dealership will allow for a wider array of merchandise, including telehandlers and wheel loaders.
Kibble Equipment, an 8-store John Deere dealership in Minnesota, has started construction on a new 48,000 square foot store in Sleepy Eye, Minn. It has also expanded its service shop in Minnesota Lake and is planning a new facility in Blue Earth.
On June 25, John Deere dealer RDO Equipment announced its acquisition of Triple W Equipment, a 3-store John Deere dealer in Montana.
Triple W supports forestry customers and the addition of these stores will double the business of that product line for RDO, the company says. RDO now has over 75 locations.
As remote support and telematics become more attractive and efficient service options for precision farming dealers, one organization is looking to develop standards for how machinery transmits in-field data.
The Agricultural Industry Electronics Foundation recently formed a working group to evaluate and select radio standards for machine-to-machine communication of field position, speed and implement fill levels.
Once approved the guidelines created by the Wireless In-field Communication project team could then be universally adopted by ag equipment manufacturers.
But with many farmers using different combinations of equipment on their operation, one of the challenges, according to AEF chair Peter van der Vlugt, will be overcoming proprietary barriers that could hinder compatibility.
“We see that companies will come with solutions that are non standardized. So the major obstacle that we at AEF see is that there will be non-standardized solutions, which in the end, similar to ISOBUS technologies in the past, will lead to incompatibilities in the field. So as AEF, we want to be a step ahead and try to address these issues prior to these products getting into the field, to make sure that our customers as well as the dealers get compatible products."
While the working group is still in it’s preliminary stage, AEF members say future recommendations and standards could lay the groundwork for additional evaluation of data management transfer and even certification of wireless devices as AEF components.
Back in 2009, John Deere CEO Samuel Allen said the company wanted to double annual sales to $50 billion by 2018.
Looking at year-end numbers for 2014, it looks like Deere has some work to do in the next 3 years to reach that goal. Net sales for fiscal 2014 came in just over $32.9 billion. As Ag Equipment Intelligence reported in March 2011, the key to this growth would be expanding Deere’s foreign markets.
Looking at Deere’s major markets worldwide, sales have been holding relatively steady over the last 3 years and have even dipped in some areas.
Since Allen set the goal in 2009, North American sales are up $7.2 billion. In Western Europe sales are up $1 billion, but have been hovering at $4.4 billion since 2011. In Central Europe and CIS, sales are up less than $1 billion and Latin America is up $1.8 billion.
Allen was recently quoted in a Quad Cities Online article saying less than half of Deere’s sales are made to U.S. farmers. However, according to a recent Deere investor presentation, U.S. and Canadian sales account for $20.2 billion compared to $12.7 billion for the rest of the world.
Ag Equipment Intelligence’s latest Dealer Sentiments & Business Condition Update revealed that in April the number of ag equipment dealers reporting used equipment inventories as “too high” fell to 43% from 47% the previous month.
In April 2014, a net 23% of dealers reported used equipment inventories as “too high,” a 20% difference compared to April 2015.
The Assn. of Equipment Manufacturers (AEM) reports that combine inventories are down by more than 400 units, or almost 17%, in March year-over-year. Despite this, the level of dealers reporting combine used inventories as too high has gone up over the last 2 months to a net 54% of dealers.
The number of dealers reporting new equipment inventories as “too high” in April rose to 41% compared to a net 33% in March. This is on the high end of a solid trend of dealers reporting new inventories as “too high” over the last 6 months.
The next Dealer Sentiments & Business Conditions Update will be released June 30.
As a desperate entrepreneur trying to capitalize on the rising Ford motor name, Baer Ewing hired a man by the name of Paul Ford (with no relation to Henry) in 1915 as his assistant to the newly founded the Ford Tractor Co.
Unfortunately for unsuspecting investors, it soon became apparent that Ewing and his partner were in the business to make a profit, not a tractor. After designing a model to sway purchasers into buying stock in the company, none of the investors saw any return as only a handful of tractors were actually manufactured.
While Ewing ultimately avoided any convictions following a fraud investigation, these practices were not uncommon at the time and eventually sparked severe regulation reform in the tractor manufacturing industry.
If you have any feedback or story suggestions, you can send them to email@example.com. Thanks for watching, I’ll see you next time.