Future of CNHI (CaseNewHollandInternational)

oldtanker · Dec 11, 2013

Can't find it now but I read an article in what is now the AM of yesterday that stated dismal sales of FIAT cars both in the US (little over 6,000 units in Aug 2013) and Europe were causing Fiat to up it's game (Fiat's total loss of market share sense 09 is about 42%). They plan on spending 12 billion over the next couple of years redesigning cars to better compete in the markets, both in the US and in Europe. Not too bad sense FIAT cars, as a stand alone company has been losing money sense 2011 with losses of 304 million for the first 3/4 of this year. The article stated that FIAT has been looking for a buyer for CNHI (what they are calling it now) but that so far there has been little interest. According to the writer FAIT says there isn't enough profit in building and selling AG equipment today. Now lets all be cool headed, IH is dead and the IH some of us love can never be reborn. Even if the name was resurrected it would live on in name only. Only the name could come back. But the big question is what is the future of CNHI? Will the company carry one under FIAT? Will FIAT find a buyer? Will FIAT decided to just shut it down and sell off the assets (Fiat has done that in the past)? If it sells will it become like AGCO where most of the names go away?

Please lets keep politics out of this.

Rick

4020deereboy · Dec 11, 2013

Maybe it will be split back up and be seperate
companies I'd like to see a new IH tractor

Deere Scotty · Dec 11, 2013

Yes its true; been for sale at least a couple of years now with no buyers. I have huge problems with "not making money" Deere has been boasting record profits, & if You ask someone what type of tractor they would rather have, Case-IH, or JD? Its my impression more people say Case-IH. I am a John Deere Man; BUT the best tractor I ever owned was a Case-IH 7220. In the 1st 2500 - 3000 hours I had spent only about $600 in repairs. I never came close to that with a Deere. Last year a JD 3055 (no real match but...) got a 20 year service! 27xx hours. Had a dozen little problems, & one major Hydraulic problem. Spent $5300. It was a cheaper tractor; but its hourly operating cost probably matches, or exceeds the cost of the 7220.

In a nutshell... I cant imagine them not making money. But as with most big corporations nowadays. Making $20,000 isn't acceptable; when the competition is making $21,000 off the same size tractor. I would be very happy making some money, & staying in business. But they would look at me as being stupid!

Bob Bancroft · Dec 11, 2013

Are you sure it's not CNH Industrial?

Mike M · Dec 11, 2013

What little I looked at the Fiat cars it's no wonder they don't sell. The price is way higher then other similar size cars.
They should try and sell their cheap car cheap !

Spook · Dec 11, 2013

You are right, wall street would crucify them for a 5% difference in margins.

Traditional Farmer · Dec 11, 2013

How many of you own even 1 share of Fiat? The tractor business must be like farming those that don't make a living doing it are always the biggest self proclaimed "experts".Or how many even run a business of any kind?Far different running a business to make a living than just going to a job putting in time and collecting a paycheck.

Dick2 · Dec 11, 2013

The history of European companies buying U.S. companies has been one of failures. Fiat has had several failures, Deutz, Mercedes, etc.,etc.

I have experience in marketing and I don't understand what some of these companies are doing. When one company buys one that is failing, they should immediately determine which products were successful and profitable, then keep the winners and discontinue the losers.

Trying to keep all the losers in the product lines has got to cost them a lot of money.

One of my biggest complaints about equipment manufacturers is they build too many products without gathering marketing information in advance to determine what will sell at a profit.

Anonymous-0 · Dec 11, 2013

a new IH tractor? maybe one with a TA?the Magnum was one of the best most reliable tractors ever and had both Case and IH parts in it, Case makes some good tractors todaythat both Case and IH people could be happy with,

mkirsch · Dec 11, 2013

Trying to keep all the losers in the product lines has got to cost them a lot of money.

What people don't understand is you can't please all of the people all of the time, but they'll cry and whine and complain when their favorite thing is discontinued because it isn't profitable.

This is what companies fear, because it does more damage to their business than the loser product ever could. Often it's less unprofitable to keep that loser product around than it is to deal with the flak caused by the vocal minority who use or depend on that loser product.

How many of you got boiling MAD when pickup truck manufacturers stopped offering manual transmissions? How many of you got boiling MAD when the car manufacturers stopped offering large rear-wheel-drive sedans?

Clodbuster · Dec 11, 2013

Here are the sales numbers:
http://www.allpar.com/news/index.php/2013/12/chrysler-sales-rocket-higher

RodinNS · Dec 11, 2013

Ahh, tis the annual season for stupid useless conjecture...
Why do these rumours crop up every year around this time? Do you have an actual source? If you do, print it... because I can't find it. What I did find shows CNH to be modestly profitable... considering they have gross earnings of 631 million Euro.... not too far off of 1 billon US dollars.
This seems to be an annual event to speculate who will be buying CNH this year; most of the rumour driven by AGCO, who would like to think they can buy it... and Marchionne stating quite clearly that it's NOT for sale.
Considering it's the main profit center that Agnelli's holding company has at the moment, it's not likely to be sold unless they were severely strapped for cash....
My assumption... at the moment, it's not going anywhere. They've spent the last 25 years building the second largest AG/Industrial manufacturer in the world. There's not a lot of options to sell that. What has been their habit over the years.... if they need cash... they float a bunch of stock and dilute their own holdings in the company, then when things improve, they reinvest. It's how they bought Ford. It's how they bought CaseIH from Tennco... and various others. Chrysler, they got hold of at fire sale pricing.

Rod

oldtanker · Dec 11, 2013

(quoted from post at 06:18:20 12/11/13) How many of you own even 1 share of Fiat? The tractor business must be like farming those that don't make a living doing it are always the biggest self proclaimed "experts".Or how many even run a business of any kind?Far different running a business to make a living than just going to a job putting in time and collecting a paycheck.

WTF? All we are doing is discussing the possibility of FIAT selling off CNHI and what a reporter said was the reason FIAT was looking at getting out of the AG end. What's wrong with that? All I did was post what was said in a news article.

Rick

2 Old 2 care · Dec 11, 2013

Quite simply, if CNH DOESN'T make "a decent profit" it's entirely mismanagement, which has plagued "International Harvester" since the late 50's and killed them in the late '70's/early 80's. They DO turn enough sales to be a thriving company. If they convert those sales numbers into a net loss, especially through a time when their #1 source of competition has netted record profits, they need to get out of the business.

Last I heard, the CNHI was the "industrial" end of the business (ie New Holland back hoes, etc...) That's been for sale for quite some time.

Once upon a time, the rumor was flying around about a potential buy out of AGCO by Caterpillar. I wouldn't be totally shocked if CAT stepped in and bought CNH (Ag and industrial) if it were to go on the market at "fire sale prices".

dcarp · Dec 11, 2013

Doesn't make a lot of sense to me for fiat to sell CNH. Why would they sell the one part of the company making money when the rest of the company isn't.
To address the AGCO rumor all I know is the stock has taken a large jump upward recently, has to be some kind of deal going on underground.

rrlund · Dec 11, 2013

Sounds like DeJaVu all over again. That's what happened to Oliver,Cockshutt and Moline. White was loosing money in their truck division and milked them as cash cows until all of the products were obsolete. By the time they changed the name and consolidated in an attempt to save money it was too late. In their case,bankruptcy court sold off the product lines to the highest bidders. Massey for example got the combine line.
I suppose if nobody is interested in CNH in its entirety,the same thing will happen to them.

2 Old 2 care · Dec 11, 2013

Then again, you're looking at a company that is an evolution of IH, who sold off the most profitable parts of it's brand to raise cash to prop up the failing part. History has a way of repeating itself. Not saying ANY of this is any more than rumor, just sayin.... It's freezing cold and covered with ice outside so why not gossip about unfounded rumors?

rrlund · Dec 11, 2013

As far as Agco's stock price,it's just been the same slow climb that Deere has been experiencing. I think it has had as much to do with the general farm economy and the rise in stock prices in general more than anything else. It's still $10-12 shy of where it was prior to the 08 crash. It's the crash in the price of CNHI stock that I'd be concerned about. Agco's on firm footing and bought out Cat's ag line,so I wouldn't buy in to any idea that anybody is about to buy out Agco.
This coming from somebody who's owned Agco stock for a long time. For many years they didn't pay a dividend and my broker told me that when I bought them,but for the past year or so I've been getting a dividend check every quarter.

Anonymous-0 · Dec 11, 2013

It seems like Fiat/IH/Case/New Holland decided to go with the worst design (Fiat tractor design) for it's tractors.

I've found the IH's and old Fords to be more durable and had a better ergonomically design than the Fiats they are selling under different colors.

The Case/IH merger was a good one the that gave us some great tractors. Looked like they did it right picking the best designs of both ag lines.

The CIH/NH merger seemed to pick the worst Fiat designs and use them across the line.

Would love to see someone buy the line and reintroduce some of the older IH/Ford designs

rrlund · Dec 11, 2013

Thing is though,if you buy any brand in a certain size and price range,it's either gonna be a Fiat or SAME. Given how well my 73 Fiat/Oliver has held up,I'd be inclined to take another Fiat over a SAME built Deere.

paul · Dec 11, 2013

Read something about that a couple yeas ago, their car
division was faltering and they wanted to get that back to glory
days so were going to rob resources from the ag division to
prop up the cars.

Looks like that has had the predictable result, both sides not
so good now.

We are looking at the end of the ag bubble right now, crop
prices dropping.

The future for ag dealers a d manufacturers has to look pretty
bleak, after 5 years of wonderful. Times? Crop farmers have
been buying tax deductions for 5-6 years now, most big guys
have way more equipment than they need, and newer stuff.
When the crunch of this ag bubble hits, they will just shut off
buying anything for 2 years, and get by fine.

Going to be very tough on Deere, Agco, Case New Holland.
Going to be a very lean time for them, after rolling in the dough
the past few years.

I'd suppose Agco is the only likely buyer of Case New Holland,
ratchet the competition down, control a bigger piece of the pie,
start running more cross-chassis platforms..... Selling parts will
be the only income source once this bubble hits, having more
names under the umbrella will mean more parts to sell.

The way of things.

Paul

oldtanker · Dec 11, 2013

(quoted from post at 07:57:24 12/11/13) Doesn't make a lot of sense to me for fiat to sell CNH. Why would they sell the one part of the company making money when the rest of the company isn't.
To address the AGCO rumor all I know is the stock has taken a large jump upward recently, has to be some kind of deal going on underground.

As the news article stated, FIAT says that CNHI isn't turning enough profit. Add in that they are planning on spending 12 billion oven the next 2 years to try to make FIAT cars more competitive. The FIAT end has lost 304 million in the first 3/4's of this year and over a billion sense 09. So to spend 12 billion they have to borrow, sell more stock or spin off something. And they are making money on Chrysler I think.

Rick

Anonymous-0 · Dec 11, 2013

Which Deere models are built by Same? I haven't been able to find out. Closest I've found are some orchard and vineyard tractors are built by Carraro. (an Italian company) Also some Zetors were rebadged and sold in certain countries, but nothing about Same. I have to agree with "cant say" that the old Ford and IH utility tractors are superior to the Fiats that are sold as Workmaster and Farmall utility tractors today.

NY 986 · Dec 11, 2013

Fiat back to glory in automobiles? I never knew they had a golden era. I considered them the AMC of Europe and saying that is probably an insult to the long defunct AMC.
A CNH purchase by AGCO would probably have to be signed off by the US Justice Department for Anti-trust purposes. When the CNH that we know currently took shape the Feds forced Versatile to be spun off to Buehler. I don't know that the Feds would want the industry to be reduced to two giants (Deere and AGCO) and some very minor competitors. Kubota has been expansion-minded so I don't know if they might be involved in buying some portions of CNH. Almost as fascinating as back in 1984 when everybody was trying to figure out how the giants were going to reshape things.

NY 986 · Dec 11, 2013

I don't know about your statement concerning brand preference. It probably is true where you are but I see a lot of "Red" farms starting to have "Green" equipment during the last sales boom at least where I am at. The "Red" dealer is still moving a lot of product but I would say Deere has made a net gain. I would agree the 7200 and 8900 series Magnums were some pretty good tractors.

dcarp · Dec 11, 2013

Should have been more precise about AGCO, the stock is up some but there are a huge number of calls on the stock. Meaning someone is betting the stock will rise. Options are usually a indicator of where the stock is going and are usually done by the. "Smart" money.

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