Reorganizing for the new market.

Name: Bob Crain

Title: Sr. VPand Gen'l Mgr--North America

Career: Started with Ford's tractor operations and has held various management positions within New Holland and CHH Global.

Education: B.S. degree in Business Administration and Marketing from the University of Alabama.

Responsibilities: Oversees the implementation of all business strategies within the U.S., Canada, and Mexico, including sales and marketing, manufacturing, product mgt, materials, engineering and dealer organization.

AM: Why does AGCO have a new structure in which AGCO and Massey Ferguson will be its lead brands?

BC: It is important to remember that AGCO Tractors and Massey Ferguson are brands with a rich history in the U.S. farm equipment industry. In an effort to strengthen the more traditional dealer distribution networks typically associated with these brands, we are implementing numerous internal and external initiatives.

AGCO Corporation has an equally important initiative to build the Challenger brand through the non-traditional distribution network represented by the Caterpillar dealership organization. The strength of the CAT Dealer network more effectively targets the professional or commercial farm segment.

Internally, we have restructured our marketing teams to focus more strategically on the market segment these brands impact. The larger professional farmer makes purchasing decisions differently and approaches farming differently than the smaller lifestyle farmer, so we'd be remiss if we didn't embrace these differences and evolve with the market. Our goal is to achieve a larger market share, improve overall product and brand value in the minds of our customers, improve shareholder value and continue delivering some of the highest levels of customer service in the market.

AM: How does this impact the Ag Chem brand of sprayers and floaters?

BC: At this time, the Application Equipment Division including, SpraCoupe, RoGator and TerraGator, will remain unchanged in almost every respect. As a benefit to application equipment customers, numerous Caterpillar dealers have taken on parts and service contracts, providing them with high service and product support levels in, and out of, the field.

AM: How has this change been announced to the dealers? What was their reaction?

BC: AGCO Corporation fosters open and constant communication with its dealer organizations through several practices. Annual Dealer Interface meetings provide AGCO and Massey Ferguson dealers with a forum for candid discussions and feedback on a variety of topics. The Dealer Panel program engages selected dealer representatives in detailed conversations about corporate policies and strategic plans with key product managers and executives. The Challenger brand also has similar programs for the CAT dealers.

The reaction from dealers at our recent product launch in St Louis was very positive and, quite honestly, they have been receiving information about this new direction and market strategy throughout the past year. Dealers crowded into breakout sessions to learn all they could about the new products and future market strategies. Even more telling is the number of orders placed onsite--more orders than at any dealer meeting in the history of the company.

Likewise, the Challenger dealers (CAT dealer network) positively responded to the new market strategy, which we announced to them in Las Vegas, NV, last month.

AM: Regarding dealers, how many does AGCO have and how many does it expect to have in the next five years? How do you expect that this change will take place?

BC: In the U.S. and Canada today, AGCO Corporation is represented by more than 1,500 Massey Ferguson and AGCO dealers, and the CAT dealers add more than 40 dealers to this robust distribution network. A need exists to restructure the ag equipment distribution network throughout North America, as the industry as a whole is shifting toward fewer, and larger, dealers. These larger dealers may have more than one location with larger equipment and parts inventory, as well as on-site mobile service capabilities.

We expect to experience consolidation within our North American dealer network, and the exact shape of this new distribution system is difficult to address in precise numbers. For example, in order to better access and serve the lifestyle consumer, dealer numbers may increase in some geographic areas, while the number of dealers might consolidate in the most rural and agriculture-dominated geographic regions serving the professional farmer segment.

Editor's note:

Due to space limitations this is a condensed version of the interview with Mr. Crain. To read the entire interview, go to www.AgriMarketing.com, access the "Archived Issues" link and go to the October 2006 issue.