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the downfall of IH

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Mikey

12-01-2005 21:38:44

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Over on the John Deere board there is a mention of the 460/560 debacle in the late 1950"s and how the final drives failed in many of these "new" tractors and that was the begining of the end for International Harvester. Can anybody tell me more about this. The thread is J.D. G.M.

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goterdone

12-04-2005 19:27:56

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

Face it. What goes up will come down. It has in all systems. Corprate greed and yes even we stock holders demand more and more profits. We just may be the most greedy. If company A makes a good product and pays 3% but company B pays 4% for a lesser product who do we sell out? You got it, so long company A and all your workers. To survive, company A cheapens there product or lowers there cost to produce. How?. Cut wages or move to another location. And we ask where did all the quality go?

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Hugh MacKay

12-04-2005 03:33:27

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

Mickey: I don't alltogether buy some of the reasoning put forth in this thread, nor do I agree with everything Barbra Marsh said in her book. All manufacturers of farm equipment had to deal with labour unions. Furthermore all companies had their failures with a particular tractor. Deere is the one company that should have had it right, not having any good ideas of their own, they have come closest to the perfect tractor by using and perfecting Oliver's 6 cylinder, Cockshutt's IPTO, IH's TA, Ferguson's 3 point, Ford's Select-O-speed, etc. I'm sure there are others I've missed.

Having said all of this, I think the real reason for the IH downfall, is they were ahead of their time. They weren't listening to their customers. I quite frequently am around new car, truck and farm equipment dealers. I can't believe my ears when I hear some of the garbage coming out of hot shot college educated salesmen. I bought a lot of new equipment in my day, probably more than most farmers. I never in my life went near a salesman until I knew more about the tractor or machine in question than he did. Most salesmen didn't like dealing with me, thus I usually got shuttled of to the dealer owner.

IH were the amoung the first to apply this BS sales approach of knowing more than customer, today it's just standard proceedure. One day last winter I overheard a salesman telling a customer what he needed in a new corn planter. I didn't know the customer, but thought to myself, can anyone this stupid really be in business farming. I'd have told that hot shot where to go and damn quick. I notice the farmer did in the end. I guess some folks are just more tolerant than I.

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Bus Driver

12-03-2005 05:34:23

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

One thing not yet mentioned is that in the 1970's, IH got the notion that bigger dealers would help them. Their approach was to order the smaller dealers to expand or be dropped as IH dealers. One dealer was landlocked and could not acquire at that location as much land as IH required. Being about 5 years from planned retirement, they just decided to close the business rather that start anew at another location. AGCO did the same thing with the Massey dealer who located there. So that dealer dropped Massey and picked up Kubota. Sells lots of the Kubota. Another IH dealer was primarily a heavy trucking owner-operator outfit. The owner did the shop work and decided to offer parts and service for IH tractors. Was not interested in selling new combines. IH dropped him. My idea is that IH would have benefitted from whatever these dealers were selling and customers would have benefitted from the convenient service and parts. But I am not a big-shot manager.

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lee

12-02-2005 15:40:02

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

When Harley Davidson got in trouble it wasn't just one problem, but many problems across the board in management, marketing, manufacturing, sales. It was a management change and drastic change across the board that brought them back around. A stroke of luck or genious? Harley was not nearly as big as IH but they likely had similar problems as all companys do. I tend to think Harley was just lucky. Small enough to be straightened out by the right guys in command at the right time, who really cared and wanted to fix the company, who happened to be smart enough to listen to workers and dealers and customers,
to work to their strengths, who identified and worked the right issues throughout the company and brought the company back bigger than ever. IH being so big, and the burden of problems so vast and complex, a ship without a rudder, they probably just spun out of control and the selling began. I doubt the very upper management had a clue what was wrong or how to fix it. I doubt they suffered much. It was a slow death, they had time to abandon ship for dry land. Many good companies have folded in similar ways.

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Dave NE IA

12-02-2005 10:51:11

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

I sure should not take sides, but a friend of mine has a old girlfriend that worked at DEERE in Dubuque---in accounting, she claimed that only 12-13% of the tractor cost is labor. This I might point out is the plant that pretty well makes the construction end in the later years. I would be somewhat curious what the managment portion is. Many of my friends worked at Deere, and if anyone thinks efficiency has any part of the production line may need a second look. Yet Perhaps it could be standard for industry overall, I do not have the information to compare. The workers have in the past been the extra high wage / benifit jobs in our area. They always ask WHO could posably afford these machines we are making ---well they ask that before you criisize that you compare this website---->Link

I just talked to my friend on the phone he says he thinks the JD labor cost is more like 9%, but he can not remember perfect either. IH in our area had pretty good dealers, and the tractors / machines were pretty good on many models. So actualy it just about had to be the upper end managment. Competition plays a big part as we all know, yet how can any of us not look at a very big issue--just good or bad luck for the unseen future has made us all money as well as lost us money. Dave NE IA

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Aces

12-02-2005 08:20:19

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

A lot of good ideas here. IH did have there problems and so did JD. But the difference here is how they did buisness. I don't remember IH buying up JD tractors as did JD. Back when the 86's where new every JD dealer had a 86 of one size or other with only a few hours on it. I can't believe every JD deal would have had some come in and trade a new tractor with 10 20 hours on it. The same thing has happened again this year. A JD dealer here in Iowa has 4 new CIH with less than 100 hours on them. Do you realy think a person would by something the price of these new tractors and not have a good idea if he liked it or not. That is not the way I shop.
If the JD's are so good as we all have heard for years let them sell themselfs.

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Nebraska Cowman

12-02-2005 05:29:52

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

The failed bearings were only added to a problem that was already in motion. Just nobody could see it at the time. When the Super M was introduced it should have been a direct-start diesel with 3 point hitch and IH would be on top of the heap today. But Hey, The Farmall M had been a top seller for a dozen years and who thought they needed a change?

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MJ in the UK

12-02-2005 09:09:34

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Re: the downfall of IH in reply to Nebraska Cowman, 12-02-2005 05:29:52

Howard I fully agree with you and here in the UK IH offerd the BMD tractor with a direct start(glowplugs)diesel engine and 3 point lift. Unfortunetly they never fitted indipendent PTO to this tractor or its successor the B450. The BMD tractor was first introduced in 1952. MJ

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Ernest

12-02-2005 05:13:26

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

Of course it came from John deere? They do no wrong and they don"t break down! (ya right) They kept building 2 bangers too long! Each company has their faults, but I agree with the others who posted about Management!

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Dave Wis

12-02-2005 04:25:50

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

I stand in agreement also. I don't agree with everything unions do but there is no doubt we as workers need them. It is an established fact they bring up the wages of all workers, even non-union workers.

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Sam Hagar

12-02-2005 05:22:33

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Re: the downfall of IH in reply to Dave Wis, 12-02-2005 04:25:50

Yes, they do bring wages up, but they also drive the price of finished goods up as well. How do you think companies pay for these higher wages and still maintain their profit margins? Yes, MARGINS, not just profit, profit margins. They have to make X% or they close their doors.

How many companies have moved their manufacturing out of the US because of exhorbitant union-driven wages? You're all "Union! Union! Rah-rah-rah!" and in the same breath you curse Corporate America for taking all the good manufacturing jobs to Mexico and China.

What good is a higher wage when everything costs more because of it?

I agree that unions were needed back in the early days, maybe even up through the 1950s, but acute greed has taken over, just as it has with the corporate higher-ups. Now Corporate America has found a new weapon, and if you push for more money in your paycheck, you wake up with no paycheck at all because your company hired Paco Taco in Juarez Mexico to do your job for 1/100 of your wage.

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Billde

12-02-2005 08:30:45

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Re: the downfall of IH in reply to Sam Hagar, 12-02-2005 05:22:33

Sam, if union wages drove IH to ruin, how did JD survive? Deere workers have historicly had a better wage and benefit package than IH. The key is management, from the CEO right down to the line Foreman.

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Easy

12-02-2005 08:30:38

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Re: the downfall of IH in reply to Sam Hagar, 12-02-2005 05:22:33

I don't care if you are union or non union, I don't think that American workers can compete with 3rd world wages. A couple of years ago, Vincente Fox, the president of Mexico, was complaining about the competition from China, the MEXICANS could not compete with "basiclly non existent wages" !! Don't think high tech is going to stay either, our competitors are already ahead of us in many ways. Easy.

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dave from MN

12-02-2005 06:32:54

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Re: the downfall of IH in reply to Sam Hagar, 12-02-2005 05:22:33

I do have to agree with Sam, there was a need for unions in this country at on time, not any more. I was in a union for7 years, then became a a manager in the same plant for the next 7. I as a manager was at times held back for making things better in the deptarments due to "shop rules". Trying to reward your hardest worker, that had been there 30 years, never missed a day, was not possible because the -abusing FMLA, had to sit down cause of "restrictions" lazy 2 year employee would file a greivance for un-equel recognition and compensation. As a union member I seen my dues go up yearly, my benifits stay the same or go up and when it came to progressing to a better job it some how worked out that the "freinds" of the shop commitee were some how either more qualified or had more seniority, depending on what "I" have more of, but yet I seen the shop commitee always getting off the line for "union business" while the others had to double up on jobs and work harder while the commitee would do everything to drag out the issue, go out and have long BS and smoke sessions. On the company side I had been in negotiation for contracts and was amazed at how each union negotiating commitee member had there own agenda of what they wanted, even bickering amonst them selves. remember I was a union member and had 100's of feinds and some family in the union, and what was being fought for was not what they wanted or needed, and when I would ask they shop memebers about getting back to the line so they can get back on the job and give there "union brother " a break from doing 2 jobs the rest of the day, I ussually got the answer "why would I wanna be on the line any more than i have to" geez thats looking out for the majority. I do think union leaders need to start unions in other countrie though, and make a stand over there. That way, maybe some day the jobs will come back before the only employment in the US is working for a corperate farm, Fast food chain, retail store selling absolutly nothing made in the us, or working at an import unloading what you used to make a living on making in your hometown. Venting a little here but little is far from the truth

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NDS

12-02-2005 07:16:24

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Re: the downfall of IH in reply to dave from MN, 12-02-2005 06:32:54

Do not disagree with you that some workers both union and non union do not want to do their job. It seems that everyone wants to lay blame for ineffiecncy on the lowest levels. I worked for 37 years for a Fortune 100 company that was non union at my location. For most of those years we had dozens of middle to lower management drones. A few years before I retired corporote people sent in a hatchet man and he cut out the jobs of most of the drones in our location. In my department the jobs of 7 seven foremen and 4 supervisors were taken over by 1 foreman and 1 supervisor and things ran much better without all the turf wars.,

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NDS

12-02-2005 16:03:01

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Re: the downfall of IH in reply to NDS, 12-02-2005 07:16:24

Sadly most of the dealer mrchanics I have encounterd to not know how to diagnose or repair problems either. If it pulled in under it's own power everything is normal especialy under warranty. Have had many occasions over the years that I have had to straighten out things that dealer mechanics have fowled up.

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dave from MN

12-02-2005 07:28:11

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Re: the downfall of IH in reply to NDS, 12-02-2005 07:16:24

Yeah I agree with what that, our place lso cut about 50% of salaried do nothings and the place ran great for a few years, then the same old cycle started again, had to have a manager or director for everything, what a mess. Most lines can be run with a good fore man and a few smart, respected line leaders.

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texasoldiron

12-02-2005 10:08:53

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Re: the downfall of IH in reply to dave from MN, 12-02-2005 07:28:11

You've got to be kidding me. An assembly worker can do the job of a dealer line mechanic? HA! Not a chance. The majority of the auto assembly workers are doing one-three jobs. They don't have any clue what it would take to repair what they have assembled, NOT manufactured.

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NDS

12-02-2005 06:29:54

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Re: the downfall of IH in reply to Sam Hagar, 12-02-2005 05:22:33

I am not and never have been a union member but can not understand people that get upset about assembly line workers making $20 to $ 25 dollars an hour when dealers charge $75+ an hour for labor (that is no more skilled than assembly line workers) and no one complains. A person with family to support and educate can not maintain a decent living standard on Mexican wage rates. If familys can not afford to give children the education they need to compete in the so called "global economy" we will become second class nation. Just my opinion.

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dave from MN

12-02-2005 06:58:19

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Re: the downfall of IH in reply to NDS, 12-02-2005 06:29:54

NDS, There is not anything wrong for making a $20.00/ hour as an assemly technician, if the business they work for can afford it and make more than at least a 4% profit margin, less than that and the investor may as well put the millions in a CD. What the problem is when there are 1400 people making $20/ hour the work can be done with 1000 people but due to poor work ethics, lack of pride in work, and what ever reasons the other 400 are there making the same cash sitting on their butt. In some , not all, factorie a pay for performance scale would eliminate the "slackers" which cost manufacturers millions, and reward the (wanted and needed and irreplacable) employees with probabaly a better rate and benifit package than the get by the union contract book. If you hired 3 people and after 30 days you had to pay them all the same regardless of there attendance, quality, actions, or performance, would you want to be bound like that? Yes higher wages are good sometimes, but after 30 years of increases anything made in the US cost more, everything we buy cheap ( so we can spend more on that new truck to show every one we have good wages) is made in another country, soon so will that truck. Heck steel prices are nutts, how much of that steel is from the US? Some day all this cheap stuff will be high priced also, and many of us will not be making a good income cause there will be very jobs that you can make a living at. Do I run to walmart to buy a freezer made in china so I can save $20? Heck no I will buy one that is made in St. Cloud MN and pay what I need to , because if I dont, I will be part of the issue of putting freinds and neighbors out of a job.

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RustyFarmall

12-02-2005 06:53:22

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Re: the downfall of IH in reply to NDS, 12-02-2005 06:29:54

NDS, you just said a mouthfull, and I have to agree completely. People can moan and complain all they want about "union wages", but just take a good hard look at what has happened to quality and workmanship since most of those "union" jobs have gone to Mexico or China. I say bring those jobs back to the U.S. I would really like to be able to buy a new car that doesn't break down every other month.

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pgo12

12-02-2005 02:11:44

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

that was part of their downfall, but they had other problems i am sure that contributed to it. management, union troubles, money, ect,... good reading, but sad. its tough to read the book, about the #one ag company and see the end coming. pg

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Bob

12-01-2005 22:01:00

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Re: the downfall of IH in reply to Mikey, 12-01-2005 21:38:44

Have you read "A Corporate Tragedy", by Barbara Marsh?

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Wally

12-02-2005 02:47:39

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Re: the downfall of IH in reply to Bob, 12-01-2005 22:01:00

Yes, I read the book couldn"t put it down once i started reading it but it was kinda sad. They had a lot of problems in my opion top management was the main cause for the fall. But i have been a union worker all my life and proud to be union..... WALLY

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gene bender

12-02-2005 03:01:58

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Re: the downfall of IH in reply to Wally , 12-02-2005 02:47:39

I stand with WALLY.

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Gary Mitchell

12-02-2005 05:05:03

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Re: the downfall of IH in reply to gene bender, 12-02-2005 03:01:58

Amen Wally and Gene.

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