John Deere Pulls Plug

On one of the four oldest dealers in the world. The Manchester Union Leader reports this morning that John Deere pulled the plug on RN Johnson of Walpole NH after 84 years, due to inadequate sales volume. Trucks loaded tractors and equipment for two days, and local farmers interviewed said that Johnson had a pristine reputation for service and that they were very supportive of the community, particularly 4H. They have had to lay off six of 20 employees but they say that they will continue to support the equipment that they have sold, and they will maintain their JD museum. I have never dealt with them personally, but I stopped in there years ago and I remember being impressed with the line of unstyled antiques. The picture with the story shows a very large modern building, which shows that they were reinvesting money and trying to maintain the required image, but apparently there are just not enough large farms in the area. A friend, through pulling, just moved into a new larger building in northern MA. I hope that he can help some big farms get bigger.

Just remember the statement made by jd a few years ago. "From now on we are going to be a profit driven company and not a service driven one" I for one will be amused when jd falls off the perch.

I love how everyone thinks that companies should just run themselves into the ground for the sake of "service." They've got to make a profit in order to stay in business to continue to provide any service at all.

It's not a matter of "provide good service and they profit will follow" anymore. People shop on PRICE.

If someone else has something for $1 less than you, it doesn't matter if they insert a dry pinecone in the customer's rectum as a mandatory term of purchase. The customer will happily buy from the other guy because it's cheaper.

People don't think about service after the sale, until something goes wrong. Then they expect the cut-rate outfit to kneel down and kiss their feet, and they're *SHOCKED* when it doesn't happen.

How can a business compete in this climate? Only thing they can do is cut service.

Oh, amused huh? In todays society we just keep on raising idiots, it is no longer good enough to run a business by the golden rule, or to do things the "right" way. It's a shame what's happening all around us. It all goes back to the way we raise our kids these days, let them grow up and become "educated" and now we see the results in front of our face and can't recongnize the trees for the forest!

Hard to believe, I know, but it's pretty easy to
farm without JD.

Amen.

Glenn

Why does it have to be JUST Profit Driven? Why can"t they see that they can do both? Evidently those who buy just on $$ have no understanding what it means to have REAL support from your dealer. Those guys become true friends who will try to help you if you stick with them. Obviously, there are dealers who don"t fit that model and can be weeded out by NOT feeding their profit model.
Yes, maybe I"m one of the stupid ones who will pay $1 more to get it from somebody whom I feel will support me. But, I feel like I have received more than that amount from them over the years.

I don't know if they said that or not ? I have no idea.

But I do believe it from how I have seen JD company and its dealers transform. This is not the JD company I grew up with !

JD uses the "inadequate sales volume" tactic to close dealers that are current on all financial dealing with them. What the real crooked thing they are doing is this. They change the area of responsibly of the dealer they want out of business. Here is how they do it.

Here in Dubuque there where three JD dealers: Dyersville Implement, Smothers Equipment, and Schmitt Implement. Smothers equipment was a two store chain that sold out (Dean Smothers got cancer) to Bodensteiner Implement (Bodensteiner Implement happens to be the "Golden child" dealer for JD in this area. JD always stacked the deck in his favor) They left the Cascade store open. Then they made Schimtt the responsible dealer for all of Dubuque County. Even though the other two stores set in the county. Plus three CIH dealers and a New Holland dealer. SO if all of the dealers in the county sold 10 hundred horse power tractors. JD wanted Schmitt to have sold 60% of them. They come up with that number from the nation wide ratio of JD tractors sold as a percentage compared to the other brands. So the targeted dealer could actually sell more dollars of equipment than they had done before an JD close them because they did not meet JD's sales target number.

To me it is a crooked way of doing business. I do not buy the reason that it cost so much to keep each store open. JD does not pay one single dime of this cost. It is all back on the dealer. The dealer pays for all of his parts, interest on used floor plans and interest on new inventory. This is due the tenth business day of each month. No questions and not extensions.

I was at a JD dealer meeting twenty years ago. The JD high up where all a twitter about how Caterpillar sold twice as many dollar of equipment from less than 500 locations in the US and that JD had 2600 stores at the time. The JD cooperate guys where creaming their jeans over this fact. They think that more volume from fewer dealers is better business.

There are several reason that this is false. The biggest is risk management. Lets take this area that now has nine Bodensteiner dealerships. In the 1980s these stores where owned by eight different guys. Seven of the eight where multi-millionaire in their own right. They all had outside money besides the JD store. The other one's wife's uncle was a multi-millionaire. He actually was the start up money for the store. So when the farm crash of the 1980s hit none of these stores closed. I have been personally told by several of the old owners that they had to take $75-100 thousand each year for several years of their personal money to keep the stores open. So now we have one man owning the nine locations. Could he keep nine stores open if the farm economy crashes??? Can he afford losses of a few hundred thousand at each location for several years?? I think not. So that leaves either him closing locations or if he goes broke nine stores closing. That would leave the entire North-East corner of Iowa without a single JD dealer. This is poor risk management.

Then I think that there will be a class action suit against JD and other brands for price collusion. When you have a multi store dealer like Bodensteiner they use a sales program called "Sales Quote". Every salesman is supposed to write every equipment quote on this program. What this does, that I think is actually illegal, is that if you go to different locations under that same dealer's ownership they look at the quote given by the first dealer and then just match it or maybe even bid a little higher to funnel you to the closest dealer to your location. IF any other dealership chain does this it is illegal. An example would be a multi location car dealership. They are not allowed by Federal law to fix the prices among all their stores like the JD dealers do with the sales quote program.

So the only way to get a true competitive price is to get quotes from different chains. Even then that does not guarantee that you will get a competitive bid. JD has special unpublished sales programs that only apply to the dealer's area of responsibility. So if you are out of that area and have not done business the other dealer can't get all of the discounts that the dealer in your area does. Where this is really wrong is if you dislike the dealer in your area John Deere is stacking the deck against you doing business with another dealer.

What has happened in my area is that some long time JD owners have switched brands to be able to not deal with the dealer they do not like.

An example of this would be right in Cascade. A large local farmer does not like Bob Bodensteiner. The local farmer had been JD for years. When Bodensteiner bought Smothers out that farmer quit dealing with JD. He now has a CIH combine and all MF tractors. The only green equipment he still owns is his hay and planting equipment.

What farmers many time do not think about is that they are protected under the same consumer protection laws as everyone else. These rules where made for just a regular Joe buys cars and house hold items but they apply to all personal consumers. An example of this would be repair estimates/quotes. If the repair goes more than $100 over the quote the service provider is requires to have approval from the customer BEFORE the work is done. How many times have you had something done at a Agricultural dealer and the quoted price would be way under the final bill??? I never have had the repair come under the quoted price.

So I strongly disagree with how JD is doing business today. CIH is not much better about this. Look at how many stores Titian Equipment has.

In 2012 John Deere forced the sale of our local John Deere
dealer which was doing fine...The JD dealer that bought it
now has 4 dealerships and I hear that they need to buy
another one just to keep Mother Deere happy..

Deere is also forcing the sale of the JD dealership in the
next town to the north of us..

Dad grew up in central Kansas just 4 miles from an IH
dealer...After being in the IH business for many-many years
they left when Case-IH took over...They went to Salina,KS
and were the JD dealers there until John Deere forced them
out 3-4 years ago..

Yep,that's why we lost our local dealer. They weren't on Mother Deere's master plan.
Like Hemihead said,pretty easy to farm without them. Just a royal pain to have to drive farther to do it is all.
The college boys running that worthless outfit need to study up on why Allis Chalmers bought Rumley. It wasn't to get their products,it was to get their dealer network. They'll find that out too late on their own though.

That goes for me too. The old company is dead and the new one is as good as dead to me.

due to the college educated idiots that run deere and company our dealer was forced out a little over a year ago. creeger implement in tiffin ohio was the oldest dealer in the country and they were doing very well and had built a new building not too long ago. their service was always great .

Thughts on this;
1. Local Deere dealer of many many years aruond here always said, service was where a dealer made his money.
2. My little small local Stihl dealer gives me the best service, and I will buy new saws, equipment, ear protection, oil, etc. from him becuase of that.
3. Was told yesterday my 11-year old Lennox furnace is obsolete, cannot get parts,out of date, etc etc., and my reply was "Well why would I ever want to buy ANOTHER Lennox??"

We lost our JD dealer here in town back in 1980. Mother Deere only wanted dealers on state highways in new attractive buildings. Many dealers built the required 1 million dollar shops and many didn't survive the '80's.

Just have to look in your stock portfolio if you have one and see
why they do what they do. Everyone wants their stock to perform at
top level.

Mid-Michigan is all locked up with the John Deere mega-dealers.

There is one smaller independent JD dealer south of Flint. I still wonder how they continue without JD corporate forcing them out.

Many companies fail and go bankrupt. There is not reason that Deere may not be the next one. Customers are your income stream, whether you are a little convenience store or JD. Tick them off, and they will go somewhere else.

Rick

I have a friend who shall remain anonymous who is Head Maintenance-man at a very large company near here..
Co. hired a New idiot ("College educated") as his Foreman...
From the 1st DAY, the "New Idiot" has been on a most interesting LEARNING Process...!! He is learning when to keep quiet and observe (OR, he might end up DOING the job all by his-self)..!!!
Sad that Idiocy is rewarded...but, what do you get when you cannot even Discriminate on the grounds of ABILITY...????? (A President??)...

IMPEACH This FOOL...

Ron..

Deere's tactic seems to be to ridicule you at the dealer till you buy new. Your comments about how they operate really make sense of it all.

There's one in north west Michigan with only two locations. I'm sure he knows he has a big bulls eye on his back,he's way too close to a mega dealer with at least 8 locations. In fact,except for those two,they have all the locations on the west side of the state. Every month when I get the Farm Trader I expect the name to be changed on those two.

Got that exactly right. The parts men here will cop an attitude and ask you if you know how long it's been since Deere made that? Then they compound it by mostly only stocking maintenance parts for new equipment and not repair parts for the older stuff. In fact,Deere is discontinuing parts for the 10 and 20 series tractors,but they'll order them for you from A&I if you want them too. But that's when they cop the attitude and ask you why you don't buy something new.

As far as what JD says,yep,the local dealer sold quite a few combines their last year in business,several under Deere credit. Two got reposessed and Deere told the dealer they had to pay the interest on them until they resold them. Corporate had pulled so much crap on them that I don't know that the owners were all that disapointed when Mother Deere wouldn't renew their contract.

Anything sold under JD,CIH,Agco,Oliver,Case,MF,Cat or etc credit corps.and repoed,the dealer has to pay for the idem in full.That is what put a lot of dealers out in the 80s.Deere is nothing compared to what we have seen Agco do to their dealers and to me Agco has the most to lose.

I saw the same thing when Cummins bought out Onan. First thing they did was kick out most of the dealers. Then kicked out anyone that knew anything. That was around 1985 and they are still paying for that mistake.

I read these arguments with a bit of cynacism, because most are right, and a lot because it's the way things are. Our local dealers have merged and become a large chain with a dozen stores, way down into Virginia. Like the CIHNH dealers, also. And our local JD dealer can usually have parts the next day for most things because of it. But I also see the advertising of a combine vs. a car, and the statement that they're not the same. Well, DUH! But quite often, I can find a lot of parts from local automotive supplies for half the price of the dealer. Same part, different package. Bearings are a great example, or PTO crosses. Our local red dealer left here some twenty years ago when the were told by CIH they couldn't carry NH as a short line. Our nearest dealer, again IH, had their franchise yanked when they broke up IH, and they wound up with a truck line and Kubota tractors. Our nearest CIH dealer is now over 50 miles away. I still have three NH dealers within 40 miles, but NO CIH!!! And, though I am a greenie, I still respect and use some IH equipment, but I hate going for parts, so most are used or aftermarket. Does CIH benefit? Probably not. I also have one JD dealer within 15 miles, but two others within 50 miles, and unassociated with each other. Yet their prices are set hard and fast (like NH) from the manufacturer. I have learned to LOVE USED equipment that is almost new and half the price at the auction, if I can find one without a dozen dealers snapping it up to keep the price high enough to make a guy look at their overpriced new paint. My baler is a great example. It's a NH 644. It cost me about $12k new, and a new one is close to $25k. I can get a current model at a sale for $10k if there are no dealers there, or about $15k if one is. He'll ask $20k for the used machine. He wants to 'give' me $6k for mine in trade on the machine he just bought at $15k, and bill me for $20k for the used machine. He'll turn around and sell mine for $10k and swear he's losing money.But, I'm the one who has to work my ask off to pay the bill.

And that's a good reason why guys are getting out or never starting farming. If they were reasonable without over pricing, there would be more farmers who could stay in business. But, by the time they have the machinery paid for, it's worn, and there's some slick salesman telling them they HAVE to have a NEW machine, at a premium price set by the manufacturer, not the market. And the market is shrinking, because a man can make a living making them rather than paying for them.

As I have found, new paint is much cheaper than new iron. And , I have a rainbow of colors to chose from....

I agree 100%.

If your sign doesnt say, Tri-County (9 stores) or D&G (8) your days are numbered on this side of the state.

Rick

knox county ohio lost there john deere dealer when Harstine went out of buisness

Happened to a lot of car dealers over the years, including arguably the oldest dodge dealer in the nation, definitely oldest in the state. Only one new car dealer within less than 30 miles of me.

Deere dealers, 45 minutes at the closest.
I buy a lot of aftermarket parts, cobble up something when I have to!

Not for nothing, but I'm not surprised at any of this.

Any time we ever went over to the local Deere dealer in the last 40-ish years, it was a miserable experience. If you weren't there to drop six figures, you weren't there. List price was THE price.

Never could understand the rabid loyalty.

(quoted from post at 17:27:41 01/10/13) Not for nothing, but I'm not surprised at any of this.

Any time we ever went over to the local Deere dealer in the last 40-ish years, it was a miserable experience. If you weren't there to drop six figures, you weren't there. List price was THE price.

Never could understand the rabid loyalty.

Click to expand...

Here it is list plus an exorbitant shipping figure.

Ah the good old days. I bought a new 4040 from the local dealer in 1981. They didn't even have one on the lot,found one way down by Charleston West Virginia. They had it hauled all the way up here for me and knocked 12% off list price because I didn't have a trade in.

Anyone here work for Deere ? Got there Email ?

Can someone please forward all of this on to corporate headquarters for them to see what they are actually doing !

Who sells the most farm equipment, makes the most money, and has the greatest customer retention? JD. Seems these folks thatmany of you see as idiots.....are doing something right.

Yeah, Deere has a long history of making poor business decisions. (note; sarcasm)

They've been closing non profitable small limited service dealerships in favor of full service, profitable dealers since the 1980's. That's why you haven't seen Deere being sold, resold and renamed while EVERYONE else has. I doubt they'll reconsider and hang on to dead weight because a few nostalgia buffs don't like their strategy.

Times change, like it or not.

What a shame. RN Johnson is my JD dealer. They have a nice big yard so I can swing right in there with my truck no problem. Nicest people you'll ever meet. I will say that their parts people know nothing about older tractors, but as long as I knew what I wanted, I had no problem. They have not had any big Ag tractors on their lot in some time. They were still in the old sheep barn they moved into many years ago.

Add my voice, RN Johnson is, was a trusted dealer who could,
can be counted on for service and value. 'Mother Deere
dropping them adds one more reason to go back to Red
Power

Hi up here in Canada our local outfit of Deere dealers sell the A&I parts about $200 dollars more than you can buy the same part from non JD dealers.
I know this because I'm smart enough to get 2 prices on parts for my customers. Instead of it's cheaper than genuine,lets just order it. I bet if half the guys found out they would not be happy. The real stupid thing is I can get the other guys price right off the Net while these guys are on the phone trying to screw us over!
Regards Robert

WOW! 1033 words of misery! Do you need a crying towel with that?

I see it more like the DID something right in the past. I'm worried about the future if they keep going down this Wal Mart business plan of big box stores and NO customer service !
Big fancy shiny new buildings and sales & service trucks does not impress me one bit.
Now taking that money and putting it into inventory and paying a good wage to get and keep good help would !!!!

Not true on the AGCO finance comment. I work in my family"s MF dealership, and if the only way we get the sale is if the finance contract is done with dealer recourse, then we let the deal drop. Deere on the other hand, does not give the dealer a choice, if it comes back, it comes back on the dealer.

Tell that to some of the Gleaner Dealers that HAD to buy combines back.

A lot of JD Dealers around here are owned by one outfit... And I am not very impressed with their parts department. They don't seem to know or believe that the parts I am talking about exist -- for either old or brand new stuff. I order all the WD parts thru Case IH or Agco dealers.