Deere Co. selling out??

I was consulting my Ag-Business Management professor the other day about internships(of which I am required to complete 2 before I graduate). I asked him if Deere does internships and that I have wanted to work for them all of my life. He told me to forget about it because deere wants to get out of the tracor business. He explained that demanding stockholders want more dividends which may mean that Deere&Co will have to cut out implements and large machinery to concentrate on more profitable ventures. He told me that AGCO has made 2 seperate offers to buy Deere's AG tractor lines(which deere declined). Also, he said that the President of Deere&Co. has mentioned this in some investor meetings in the recent past. He told me that unless I liked dealing with lawnmowers and small utility equipment I shouldn't bother with Deere &Co.

I was appalled to hear this.....
Maybe I'm too naive to comprehend that Deere&Co. could even consider this....but it got me thinking to get some other opinions. Is the bottom line worth more than the reputation?? I hope not, but I fear so...

**Again, I didn't mean to alarm or offend anyone, I just wanted to know if anyone else has information or opinions about this...
I hope that I wouldn't have to work for AGCO to be around what I enjoy....Green Tractors

You might have also noticed the ballot for election of directors included the former CEO of BMW, Joachim Millberg - obviously a German - and indicative that they see more growth outside the USA. Annual meeting is Feb 26, we'll see what happens.

Steve

For 2002 Deere's revenues were 13.9 billion - nearly half of that, or 6.738 billion were from AG equipment which alone generated an operating profit of 439 million. By comparison AGCO's results for the year were 2.541 billion in revenue, an 88 million net income which became an 84 million dollar loss after accounting charges.

So ask yourself - 1: Why would Deere want to sell off a business that generates half their revenue and is by itself far more profitable than AGCO. 2: What band of fools is going to lend AGCO 6 or 7 billion to buy Deere's AG business as AGCO already has 86 cents of debt for every dollar in assets they control.

Deere has underperformed the S&P 500 over the last 15 years -but it's done better than the S&P over the last 2 years - so the shareholders aren't that unhappy right now. Meanwhile the numbers of farms keeps declining worldwide - so Deere knows that the AG tractor business is going to evolve into an arena where they'll sell 1 quarter of a million dollar monster tractor instead of ten 4020 types.

Net, net, Deere will be in the AG business for a long time to come - so if you want to give that internship a try, best thing to do is get in touch with Deere.

Steve