Deutz-Allis shows long line.

Deutz-Allis shows long line

WHEN YOU think about it, the change is really quite abrupt. In this age of product specialization, some of the majors are staging a comeback as long-line operations.

Just before the merger wave crashed on the industry's beach, Case and Ford specialized in tractors, as did Steiger and Versatile. White was essentially tractors. New Holland was mostly hay tools. Allis-Chalmers was primarily tractors and combines, and so was Massey-Ferguson. Even Deere and International Harvester had cut back on some of their product lines.

And now look. There's Case IH (to which add Steiger). There's Ford New Holland (and toss in Versatile). There's Deutz-Allis. There's the Allied Products ag group, including White. Only Deere retains its former shape, while Massey has moved in a different direction and become separate companies for tractors and combines.

Three essentially new companies have emerged as long-line marketers -- Case IH, Deutz-Allis and Ford New Holland. (The companies in the Allied Products group continue to do most of their production and marketing separately.)

It isn't surprising if these companies are feeling the need to establish themselves in the minds of their dealers as long-liners. Over the years, as farming demanded more specialized, niche-oriented products, dealers found their major suppliers cutting back on their offerings. To meet the needs of their markets, these dealers went out and found other major franchises plus more shortlines -- some of them not so short -- and their front yards became sprinkled with big logo signs from three, four, almost any number of companies.

And so the Deutz-Allis gathering of a large slice of its dealers in Kansas City April 14 and 15 stood as one company's way of saying, "Take a look at us, dealers. We're a long-liner again and we want to supply all your needs."

Deutz-Allis had some new products to show and some others that they wanted to re-emphasize. The prime focus was on the addition of a Class V combine to its rotary repertoire, the R50 Gleaner (more about the model in I&T's harvest equipment focus in July). But the tractor and hay equipment lines were given a going over and the lawn and garden machinery line, with a new look, was shown off, too.

Roy Uelner, president of Deutz-Allis, laid the company's position on the line for the 1,200 persons (from 500 dealerships) to consider:

"We must require our dealers to represent our full line of equipment and our financial merchandising programs. We expect you to achieve a fair share of your market for Deutz-Allis, and those who do not do that have no right to hold our franchise.

"This (market share) has been a subjective measurement, but soon the Farm & Industrial Equipment Institute will have county reporting of retail sales, giving us a market share report by county in the USA.

"Accordingly, Deutz-Allis will officially announce (May 1) to all dealers minimum sales levels that must be met to retain our franchise, and those choosing not to meet this minimal standard will, out of necessity, be terminated...those who are sitting on the franchise...must take actions to at least achieve those minimum standards, which is what we prefer, or we will cancel those contracts. This is in the best interests of both the company and the dealer organization and has been strongly recommended by your dealer representatives at previous dealer panel meetings.

Changes needed

"I'm sure you recognize it is not practical to provide the necessary sales and service support to dealers only selling parts or selling parts and very minimal quantities of machinery."

Later, William Templeton, the new marketing vice-president for Deutz-Allis, told the group that the minimum level will be $75,000 annually in purchases. But it was stressed to I&T that even this figure is not to be absolute. It isn't intended to apply, for example, in conditions of severe drought such as were experienced recently in the southeastern U.S.

"Sometimes," a Deutz-Allis official said, "a dealer will take on a franchise with no other objective than to tie it up in his area, to keep some other dealer from having it as a traffic builder. And sometimes a dealership cuts back to the point at which it's just a place for the dealer to go every day and sell a few parts, instead of retiring. That's what we need to change."

The Deutz-Allis dealers were told that in late 1988, a new tractor, made at the Independence (Mo.) Gleaner plant, will be introduced. It will have a Deutz engine and a 16-speed Powershift transmission.

Deutz-Allis is reportedly about sold out of its four-wheel-drive 305 units. Options include purchasing the large size four-wheelers with Deutz engines. For smaller four-wheel-drive models under 200 hp, one possible source is the new European joint venture between KHD (Deutz-Allis' parent company) and Mercedes-Benz.

In July, Deutz-Allis will introduce a line of orchard and vineyard tractors for its East Coast and West Coast dealers.

Warranty on all 1987 Gleaner combines is for two full years, regardless of hours, with a deductable per claim occurrence in the second year.

Rebuilt components

Deutz-Allis is instituting a program of rebuilt components for the rotary combine line. Kits will include cages, cylinder bars, discharge augers, discharge paddles, accelerator rolls and other components in demand.

The R70 Gleaner, biggest in the Deutz-Allis line, will be built only forretail sale in the future unless the ordering dealer has a strong history of retailing Class VII machines. The R60 Gleaner, the company said, will also be kept at low inventory levels, as dictated by retail sales activity.

Deutz-Allis will continue to offer conventional type combines in Class III and IV sizes -- the F and M models, now also being fitted with Deutz engines.

Deutz-Allis is informing its dealers that it expects to continue reducing its discount programs through 1987. Uelner said: "No better deals will exist than exist today, and pricing is expected to firm up as the year goes on and even more so in 1988."

Like other companies, Deutz-Allis has taken a position in its dealers' used equipment inventories. The company is now stressing that while floor planning of used equipment will continue, the risks and rewards of trading used equipment must belong to dealers. Support will be reduced during the year, dealers were told, and corrective actions should be taken immediately.

The program featured one thing that I have never seen before in almost 30 years of watching new product introductions to dealers. Tom Stewart, president of the Independence local of the United Steel Workers union, came on the platform to tell the dealers that the members understand the interdependence of quality production work and selling effort, and that they would be striving to keep up their end. This was in spite of an earlier announcement that there would be some layoffs at the Gleaner plant until sales pick up.