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Tractor trials.

Tractor Trials

Burt Wilkerson returned to his old place of business in North Little Rock the other day. The rain poured down and the overcast sky cast an appropriate tone over his predicament.

The 57-year-old former tractor dealership president stood behind the counter over which thousands of parts must have passed during the 42 years he and his father Cecil Wilkerson before him operated the Mid-State Tractor Co.

Wilkerson's company, which sold both large farm tractors and smaller models, had done so well that from 1972 to 1984 it was the top-selling Kubota tractor dealership in the United States, he says.

But, today, Wilkerson has lost nearly everything, is plagued by lawsuits totaling nearly $1 million and says he has heard Kubota may press criminal fraud charges.

"It would be great if I could file for bankruptcy," he says. "I've heard rumors that Kubota is going to make an example out of me and even threaten me for fraud."

While he admits making some serious mistakes, based on poor business judgment, he denies that he siphoned money from the company for his own personal use.

Wilkerson insists Kubota, a company dominant in its native Japan and rapidly increasing its U.S. marketshare, is partly to blame for his troubles.

This story is told only from his perspective. A Kubota credit manager contacted declined to talk about Wilkerson's case. Other company officials were notified that Wilkerson had comments critical of their operation, but they did not respond.

In its heyday, Mid-State Tractor sold several lines of small tractors including New Holland, Sperry, Massey Ferguson and John Deere.

The dealership has been closed since May. The store is empty. Dust rubs off on Wilkerson's sweater as he leans against the counter. His face is craggy and his brow is furrowed deeply.

Following a lawsuit in U.S. District Court, Wilkerson agreed to pay the Kubota Tractor Corp. $414,275 plus interest. Other consent agreements or judgments, filed at the Pulaski County Courthouse, total $388,662. Outstanding litigation by creditors and suppliers seeks a total $235,605 from Wilkerson or his company.

OneBank is foreclosing on his Rose City store, and he is waiting to hear if his home will follow.

While he has agreed on some sums owed his suppliers and creditors, he says he does not know where he will get the money to pay them. He is looking for a job, but has had several rejections because he was told that he is too old.

Wilkerson says Kubota officials have told him they have the financial resources to tie up his case and deny him bankruptcy protection.

Attorneys for suppliers question him about the disposition of his previous inventory. He goes to meet with the companies' lawyers alone because he cannot afford an attorney. Wilkerson doesn't need one. "All I do is tell the truth," he says.

Shut Off

Besides his own failings, he says key ingredients in the demise of his family's long-standing business were economic times, the capriciousness of his bank which shut off a $300,000 line of credit and refused to finance his customers' purchases, and the ruthlessness of Kubota officials, who appeared to be intent on closing his business.

"We made a lot of mistakes," Wilkerson says. "Man alive, we made a lot of mistakes."

He was president and owned about 70 percent of the firm, while James Edward Wilkerson, his uncle, was secretary-treasurer and owned about 30 percent. All of Burt's four sons also worked for the company at one time. His son, Paul, was general manager.

He says the biggest error he made was to expand too ambitiously. He set up stores in Benton, Batesville, Heber Springs and Quitman from 1981 to 1983.

The company did very well from 1979 to 1981 during a relatively sluggish economic period, and he believed he could do even better in good times.

After expanding with pressure from Kubota, the farm economy did poorly in 1983 and 1984 and that was the beginning of the end, he says.

Mid-State sold combines, large tractors and hay balers to farmers, many of whom ran up bills of $3,000 to $4,000 each. They would generally pay in full after the harvest. The agricultural bust led to Mid-State losses totaling about $150,000 in a short time.

Line of Credit Revoked

In 1985, the company was dealt another severe blow. First American Bank of North Little Rock, which later became OneBank, cut off Mid-State's $300,000 line of credit, refused to finance customers' tractor purchases, told the company to take its accounts somewhere else and in effect blacklisted the company for other financial institutions.

At the time, Wilkerson says the bank had about 500 outstanding consumer tractor loans totaling about $1.8 million. Fewer than 1 percent were late, but the bank was trying to get out of agricultural lending on the advice of bank examiners.

OneBank officials declined to comment because they say Mid-State's problems occurred before they purchased the bank. Pat C. Koch, who had been president/CEO of First American Bank, says he would not discuss any of his former customers' business.

About five years ago, Wilkerson considered filing for financial reorganization, Chapter 11, but his attorneys convinced him to try to ride out the storm. He regrets his decision.

Besides selling tractors, Mid-State was the state distributor for small Kubota engines. In 1984, Wilkerson was working with a manufacturer who was going to buy 250 18-20 horsepower engines for about $3,200 each.

Following Kubota's rules, he says he notified the company about the pending deal. About the time, he hoped to close the transaction, he learned that Kubota sold the tractors directly to the manufacturer for less than what the engines would have cost him.

"We thought about legal action, but they said they would take our dealership away," Wilkerson says.

The day Kubota came in to close the dealership, Wilkerson says he had orders totaling about $100,000. It was spring, and the start of the best season for farm equipment sales. With another 90 days, he says he could have pulled out of his financial problems.

Times Were Changing

Wilkerson says other factors making it difficult for Mid-State are:

* Kubota management changed, and the company appeared less willing to work out the problems faced by Wilkerson and his customers, he says.

* Kubota prices went up so that equipment, which may have cost $5,000 new in 1982, sold for about $12,500 in 1989, he says.

* There appeared to be a movement back to the city from the country for people who had small farms and who had formed a large section of Mid-State's customer base. As a result, the market shrank.

* With the closing of Mid-State, some customers decided to quit making payments on equipment they purchased.

In defense of Kubota, Conrad Beggs, who owns Sunbelt Equipment Co. and operates tractor dealerships at Sherwood and Benton, says the Japanese company is treating him well. He calls Kubota helpful and fairminded, but he has just been a tractor dealer since May 1989.

Beggs' primary company is Sunbelt Properties, but he decided to venture off into a new business and approached Kubota about a dealership.

After Wilkerson moved out of his Benton store, Kubota moved Beggs in, so there would not be any noticeable lapse in sales or service.

There had been about two dozen Kubota dealerships in Arkansas, but now there are only about a half dozen struggling dealers, Wilkerson says.

It was ironic that the same week Wilkerson was being interviewed about his problems, Kubota dealers were attending a convention in the Opryland Hotel at Nashville. In better times, he might have been there with them.

Assessing the Wilkersons' situation, one businessman notes, "The world changed and they did not change with it."

There have been no fraud charges filed against Wilkerson. It hurts, he says, when people accuse you of a crime when your company has failed after being highly successful. But then, that's the price of doing business.

As his company started to falter, he says he had been through tough times before. "Everybody just kept thinking we'll have another good year. It will get better."

As the interview ends, Wilkerson locks up his vacant store one more time. The rain has subsided, and it appears as if the weather might be changing. But it continues to pour the rest of the day and into the night.

PHOTO : Talking about the heady success and crushing failure of a family business puts Burt Wilkerson through a range of emotions.

PHOTO : Burt Wilkerson stands at what was the parts counter in his Rose City store at North Little Rock. he talks about problems leading to the demise of a tractor company started by his father in 1948.
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Article Details
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Title Annotation:Burt Wilkerson of Mid-State Tractor Co.
Author:Kern, David F.
Publication:Arkansas Business
Article Type:interview
Date:Mar 12, 1990
Previous Article:Export diplomat.
Next Article:Ace in the hole.

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