New efforts spotlighted by AGCO.

New Efforts Spotlighted By AGCO 

ARMED WITH orders for 1,000 of their new orange AGCO-Allis tractors, officials of Allis-Gleaner Corp. are feeling optimistic about the future of the new farm machinery conglomerate they are putting together.

"Beside writing orders for 1,000 tractors, we took orders for 125 of the new series of Gleaner combines, and we have cards from 450 dealers who say they'd like to talk about taking on companion lines in the AGCO group," said Susan Hogan, vice president of communications for the corporation.

Hogan was a major producer of weeks of meetings near Independence, Mo., in June at which AGCO executives introduced themselves and various new, updated and old product lines to dealers of the Deutz-Allis and Hesston product lines and the White tractor lines.

After a series of hectic months in which AGCO chief Robert J. Ratliff seemed to be on an endless buying spree, Hogan reported at the end of July that there had been no new purchases recently, and no decisions made yet on where the company will move production of White tractors (and the 9100 series of large Deutz-Allis models), which are to be built at White-New Idea's Coldwater, Ohio, plant until the end of August.

"He's probably buying something, but I don't know about it because he's on vacation," she said. "Things are settling down here a little bit, but they're heating up as far as putting plans into action. The next big item will probably be the decision on where we put tractor production, but there's no real rush on that."

Ratliff used the "Partners for Tomorrow" meetings with dealers to outline the AGCO game plan and show off the extensive new tractor lineup built in Italy to AGCO specifications by Europe's SLH consortium, formed by SAME and Lamborghini of Italy and Hurlimann of Switzerland.

The new tractors, rated from 40 to 130 pto horsepower, use direct air-cooled engines, the Deutz-Allis line-up will also include 6 DX models of green-painted air-cooled KHD tractors, rated from 51 to 120 pto hp and bearing the Deutz-Allis nameplate.

Air-cooled engines, built in Germany by KHD-Deutz, are used in the Gleaner combines, built in Independence, Mo., and in the orange-painted 9100 series of tractors built to Deutz-Allis specifications at the White-New Idea tractor operation. The 9100 series includes 4 models rated at 135 to 193 pto hp.

White tractor dealers, the latest AGCO acquisition, will continue with water-cooled tractors in the America series, (2 models of 61 and 81 pto hp) and the Workhorse series (4 models of 125 to 195 pto hp). Hesston hay equipment was to retain previous lines, with no tractor added to the brand.

At a press conference and product preview, Ratliff said the development of a strong, well-supported dealer network is the top item among 5 priorities he and AGCO directors set for the company. He noted AGCO has contracts with about 700 Deutz-Allis dealers, 640 Hesston dealers and 680 White tractor dealers.

"That is almost 2,000 dealers," he said, "this is one of the largest dealer franchise organizations in the ag industry today.

Calling for "fine tuning" of the dealer network, Ratliff declared that "We are not as interested in the quantity of dealers as in the quality of our dealers. We are going to make a major effort to upgrade them and provide the support they need to take their important place in the market. We are looking for financially strong dealers who have a strong local following and who generally produce a balanced sales effort for the products they represent."

The second priority, he said, was a technically solid product line with good backing. The company, he said, will adopt a "no hassle" warranty, so dealers can tell customers "if you paid good money and expect value, you'll get it, no matter how long it takes or how far we have to go." Deutz-Allis, he said, will warrantee combines and tractors over 40 horsepower for 4 years, 4,000 hours, with the first 24 months covering all components with no deductible, and a deductible of $250 to $400 for the last 25 to 48 months.

Item 3 will be creation of sales unit in which each field representative will handle all product lines under the AGCO umbrella. This, Hogan said, "should reduce 'windshield time' and make things simpler and more efficient both for the corporation and the dealer."

Ratliff said Deutz-Allis, Hesston and White will retain separate identities and product distinctions, and promised to "protect the entrepreneurial investment" of dealers, saying "we are not going to be putting competition across the street" from dealers within the system.

Fourth on the list of plans is strengthening the AGCO parts division, which will handle a bewildering variety of service parts for the Allis-Chalmers and Deutz tractors, Gleaner combines and its predecessor Baldwin line, and the Minneapolis-Moline, Cockshutt and Oliver product lines that were melded into the White tractors. The numbers gets staggering when supplemented by the various Hesston products and assorted tillage tools, planters, balers and others implements offered by all the various parent companies through the years.

"We're going to consolidate our parts business into one major division that will supply parts for all of the different product lines," Ratliff said. "In doing this we anticipate they will continue to excel over the competition and provide a 95 percent first-time fill rate, which we think is the leadership position in the industry."

Fifth on the roster, he said, is development of the AGCO farm finance unit which the company formed in February to provide retail financing. "We think we can serve all of the dealers in the AGCO network and certainly perform equal or better than all of our competition."

On the expansion front, Ratliff said AGCO would "continue to look for niche acquisitions that will fill the voids in our business and allow us to further capitalize on the utilization of our assets."

Looking ahead, he said it is "reasonable" to anticipate 1992 annual sales volume exceeding $500 million, which he said would exceed the sales volume of Allis-Chalmers.

Ratliff, president and chief executive officer of AGCO and Deutz-Allis, said AGCO, while just over a year old in June, had demonstrated its ability to run a business.

He said AGCO had taken a company "that had experienced losses for at least the last 5 years under KHD ownership and provided profits right off the bat." He said 1990 profits were more than $8 million, with a positive cash flow in excess of $20 million.

The turnaround, he said, "was not miracles or playing with mirrors. It was textbook operations to reduce inventories, reduce personnel costs, utilize facilities better than ever . . . we just went after one thing right after another."

PHOTO : ROBERT RATLIFF is heading a major integration of lines under the AGCO banner, with a new supplier for the Deutz-Allis tractor line; redesigned Gleaner combines; the acquisition of White tractor production and dealership; and the takeover of the Hesston product line and half-ownership of the plant that builds hay tools for Tenneco's Case-International dealers.

PHOTO : BRIGHT ORANGE colors like the old Allis-Chalmers products and a large new identifying badge as an AGCO tractor are among outward visual symbols of the changes taking place in the Deutz-Allis system.