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The rebirth of a tractor company. (Cover Story).

Is it possible to build a new tractor company in today's economy? It's not easy, but it can be done. Just ask Joe Michaels. He has a great story to tell about McCormick's return to the U.S. tractor market. Formerly ag division product director for the hay equipment specialists at Vermeer Manufacturing Inc., Michaels is general manager of McCormick International USA Inc. Since the company's rebirth one year ago, he has been working to bring McCormick USA to life.


In 2000, Joe Michaels was responsible for locating and evaluating new products and product concepts for Vermeer, Pella, Iowa. While seeking a European production partner for Vermeer's big square baler, Michaels met with representatives of the Morra family, owners of ARGO S.p.a. and the new McCormick International. Following the 1999 purchase of Case IH, Fiat was forced to divest certain European holdings, and as a result, ARGO acquired the rights to Case IH's combine and large square bale product lines. In January 2001, ARGO also acquired the McCormick name, and engineering and design rights to the C, CX, MXC and MX Maxxum tractor models, and factories in England and France. McCormick International was reintroducing tractors in Europe, South America, Africa, Australia and New Zealand but had not found the right distribution partner in the United States.

It became apparent to Michaels that ARGO and Vermeer were a great fit. Both were longtime leaders in agriculture with solid reputations for top-of-the-line equipment and service. They were privately owned, family-run, with a clear vision of what it takes to succeed. And, says Michaels, both companies believed in treating their dealers with the same level of respect and fairness that every customer deserves.

By February 2001, talks shifted from balers to McCormick tractors. In late October, Vermeer and McCormick agreed to form a strategic alliance. McCormick Tractors International would produce tractors in Doncaster, England; Vermeer would support the venture in the United States through the use of its logistics and facilities in Pella, Iowa. And McCormick USA would build the dealer network and handle product distribution.

On Oct. 25, 2001, McCormick International USA was born. Six days after the alliance was signed, Michaels brought on board the staff at Lessing-Flynn, Des Moines, Iowa. For the next six weeks, Michaels was the only employee of McCormick USA--and Lessing-Flynn's account team, along with a few key managers from McCormick Tractors International and Vermeer's Ag Division, were his only support.

McCormick USA benefitted from several unusual assets few start-up companies can claim: a proven product and recognized name; McCormick International's global power and manufacturing expertise; and Vermeer's immediate and reliable parts support and service.


Michaels began negotiating contracts, procuring office space, recruiting and training territory managers, ordering tractors, and working with McCormick International's contacts in England and Italy. He also worked with the LF team to hammer out details of McCormick's rollout to media and consumers. The national media event was set for Dec. 7 so McCormick's story could reach ag publications' audiences prior to planting season.

Organizing a nationwide media event for any upstart company in four weeks is difficult, even under the best of circumstances. The agency team, headed by account supervisor Tom Flynn and PR director Kathy Murphy, faced additional challenges. "McCormick USA did not have a phone number, fax, e-mail or address. There were no dealers, territory managers or staff; Joe Michaels was the lone employee and decision-maker," Flynn says. "And all literature needed to be adapted for the U.S. market, including specs, terminology and photography." Most importantly, the team needed to develop both a media event and a long-term positioning strategy that would be ready to go in less than four weeks.

"We also were concerned about how the ag media would respond to an invitation on such short notice. Would the broadcasters and editors head to Iowa in December? Were their travel budgets shot for the year? And would they clear their calendars to attend?" Murphy recalls. The LF staff immediately began making media calls; response was highly favorable from the start.

The agency's first challenge was to reintroduce the McCormick brand to the market, build awareness, and generate interest from prospective dealers and customers. There would be no tractors or dealers for several months, so product branding would wait. In focusing on McCormick's long heritage and 30-year absence from the U.S. market, Michaels and LF decided to spin out the theme used by McCormick worldwide--"It's Good To Be Back."

"McCormick has been a world brand since the late 1800s," says Chad Huyser, marketing manager, who joined McCormick USA in 2002. "Seldom do you have the chance to relaunch an industry-wide icon that has been absent for 30 years! We were truly amazed at the power of the McCormick name after all this time. The theme expressed our excitement about being back in business."

During the next three weeks, Lessing-Flynn photographed the first handful of tractors to arrive in the United States; designed, edited and printed product literature; researched McCormick's heritage and produced history-based news releases and graphic elements; and recorded interviews with Michaels and top management from Vermeer. An informational packet was created (both on paper and CD) that included rollout news releases, product-specific releases and photos, spec sheets, FAQs, leader bios and backgrounders, and information about McCormick's parts distribution center and service / product training facilities at Vermeer.

LF also developed consumer and dealer directed ads based on the "It's Good to be Back" theme, created a dealer-recruitment / training binder for territory managers, compiled a comprehensive prospective dealer kit, designed displays and materials for McCormick's February appearance at the National Farm Machinery Show in Louisville, Ky., and began to develop marketing plans and positioning themes to follow the rollout.

On Dec. 7, McCormick International USA introduced itself to the U.S. ag media. More than 40 editors and broadcasters from across the country attended the event in Pella; others linked up via teleconference. Following the formal presentations, attendees could check out the first McCormick tractors in the U.S., then hold one-on-one interviews with leaders from Vermeer, ARGO, McCormick USA and McCormick International. McCormick International's

Dr. Andrea Bedosti and Ray Spinks were amazed at the media turnout and positive coverage, Michaels says. "We all underestimated the excitement this would generate. Obviously the McCormick name still carries a tremendous following 170 years later."

Within a couple of weeks, the rollout had generated more than 200 print, broadcast and online stories. Throughout January and February, Michaels handled dozens of media interviews, as well as calls from consumers who wanted to know when and where they could buy a new McCormick. But until the dealer network was up and running and tractors were on the lots, customers would have to wait.


Starting a company from scratch allowed McCormick USA to do things right, such as focusing on the critical elements of dealer recruitment and support. Rather than rush to sign every interested dealer, the team first decided what kinds of dealer-partners were desired. "We wanted top-level, forward-thinking dealers who shared our `customer-first' attitude and who were looking for a better business partner," Michaels says.

At the rollout, Michaels vowed that McCormick would be more open, approachable, responsible and accountable to its dealers than the competition. "Our dealers will know us on a first-name basis, and they'll have direct access to our decision-makers. If dealers or customers need to talk to the head of McCormick, just give me a call."

When the initial dealer recruitment ad appeared last winter in Farm Equipment magazine, Michaels was inundated with calls from interested dealers. "That ad really hit some hot buttons! Dealer response was so overwhelming that we pulled the follow-up ads." By April, McCormick had received more than 250 dealer applications.

McCormick USA signed up its first dealers in mid-March. By late September, more than 100 dealers were approved. More than 60 dealer applications were denied, and several dozen more were undergoing McCormick's stringent review process. Even though McCormick's territory managers have now shifted their primary focus from recruitment to supporting the existing dealers, the company is still receiving new dealer applications daily.

There's a strong undercurrent of dissatisfaction and apprehension among equipment dealers nationwide, Michaels says. An article last winter by Bill Fogarty in Farm Equipment magazine reiterated those concerns. "Mr. Fogarty's dealer survey reinforced our plans to approach dealers in a very different way and focus on their needs," Michaels says. "Dealers are being pressured more than ever to increase their market share and lower costs; their margins are being squeezed. These folks are looking for an opportunity to change, and McCormick offers that opportunity."

Huyser says McCormick has surpassed its first-year dealer recruitment target, as well as sales expectations for both retail and wholesale units. "Several of our dealers have sold 20 to 25 tractors in just a few months. We're very pleased with how well McCormick is being accepted in the market."

Currently, McCormick USA is marketing the C, CX, MC and MTX Series of tractors (73-176 engine hp). The GX Series (38-50 engine hp), introduced at this fall's farm shows, is geared to non-ag niche markets including municipals, golf courses, grounds maintenance and landscapers. McCormick will market the VF Series--targeted to orchard and vineyard markets--this winter. In February, the company will roll out a 200-hp model, with models up to 260-hp on the market by late 2003.


Thanks to the interest of the media, dealers and customers in McCormick's history and its return to the United States, Lessing-Flynn sought additional opportunities to help brand the new product while building on the company's rich heritage. Historical timeline posters and handouts were distributed at farm shows. The tractor company joined forces with the Red Power Roundup collectors' group in Illinois to celebrate International Harvester's 100th anniversary. And in a fun link to McCormick's nickname, "Big Red" gum was handed out at farm shows.

A two-part heritage advertorial in Farm Journal generated tremendous response. Within just a day of the second ad hitting the streets, McCormick USA was flooded by several hundred callers.

McCormick sponsored a casual reception at NAFB's summer conference. Michaels and Huyser brought tractors to the outdoor reception and encouraged attendees to take a test-drive. "These broadcasters didn't just read a news release about our tractors--they got to drive a MTX175," Huyser says. "What better way to introduce them to McCormick USA?"

At fall farm shows, a new brand-positioning theme--"The REAL McCormick"--was introduced to the public. "This hammers home the fact that these are familiar tractors from a solid, reputable company that's back for the long haul. We're getting back to the real company, the real tractors, the real service customers and dealers want from a real tractor company," Huyser says. "We're fully dedicated to making it as easy as possible for people to do business with us--and that's a real and welcome difference for everyone involved."


Customers and dealers are beginning to understand and appreciate what McCormick is all about, Michaels says. With that comes a growing sense of confidence, trust and momentum at all levels. "We have a great brand and a rich tradition of quality and value. There's a tremendous parts and service support system in place. We're on course with every goal we've set. And we're setting new targets for the second year and beyond."

Yet the tasks ahead are even more difficult today than a year ago. "McCormick is back, but we can't afford to rest on our laurels. Today, the growth and evolution of this rich, old brand continue to accelerate. And the challenges are accelerating right along with it," Michaels says.

"Since all tractor sales take place at the local level, strong dealers hold the key to our future. It's time to take the next step and introduce both dealers and producers to The REAL McCormick and the qualities and values that made this company successful more than 170 years ago. This business has always been about relationships and trust. And McCormick's future will be built on developing and maintaining those relationships," Michaels adds.
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Publication:Agri Marketing
Article Type:Cover Story
Geographic Code:1USA
Date:Nov 1, 2002
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