AGCO’s newly-expanded Jackson, MN, assembly plant is now home to mid-range Massey Ferguson and Challenger-brand tractor production
When Massey Ferguson had its near-death experience in the late 1980s, the Detroit-area production facility that built the bulk of its North American tractor models was permanently closed. After that, MF tractor assembly was relegated to plants in Europe; and its combine business was splintered off and sold to Western Combines Corp, which began building and marketing MF combine designs under its own name. That left the pared-down MF brand with barely a toe-hold on the market in Canada and the U.S.
Enter AGCO corporation. The then-fledgling equipment manufacturer purchased MF in 1994 and began the process of attempting to restore the brand to its former glory. During an interview in June, AGCO chairman and CEO, Martin Richenhagen, said he now thinks it’s possible to win back the same significant market share MF enjoyed during its heyday in the 1970s.
“Yes, this is the idea,” he said with his trademark German accent. “When I think why did we lose it, this was when Massey Ferguson was owned by private equity. And they were really only milking the business. They didn’t invest in the factories anymore and they didn’t invest in the product.”
But all that has changed. When he made those comments, Richenhagen and most of his senior North American executives were in the rural community of Jackson, Minnesota. They were there to cut the ribbon at the newly-created visitors centre attached to the assembly plant that since December has been home to production of large, row-crop MF and Challenger tractors bound for North American farms.
The visitors centre isn’t the only recent improvement to the facility. A 75,000 square foot expansion completed in 2011 allowed for the addition of a third assembly line at the plant, and the company just added another 200 people to its workforce to handle the increased workload caused by adding production of those MF and Challenger row-crop models. At the same time, new manufacturing systems and a four-stage quality control process were installed on the tractor assembly line.
The large, row-crop 8600 Series MF machines and their sister line of MT600 Challengers add to the MT700 and MT800 Challenger lines of rubber-belted tractors and articulated, four-wheel drive MT900s already being built at Jackson. RoGator and TerraGator sprayers are also assembled there.
The 8600 Series tractors now rolling off that Minnesota assembly line are the first MF models to be built on this continent since the brand folded its North American manufacturing tent and confined tractor assembly to Europe a couple of decades ago.
According to Bob Crain, AGCO’s senior vice-president and general manager for North America, bringing row-crop tractor production back to the U.S. from the Beauvais France factory is a sign the company is serious about being a contender in the U.S. and Canadian market. And it was done in response to input from the AGCO dealer network.
“It started from a dealer panel meeting,” he said. “A former dealer told me, Crain, if you’re ever going to be serious with tractors in North America, you’re going to have to produce them here. And we took that to heart.”
The Beauvais factory will continue to assemble the same model lines of tractors for the European market. But by building row-crop tractors bound for Canadian and U.S. customers at the Jackson plant, the company has shaved at least 30 days off the time it takes to put a machine on a dealer’s lot after an order is placed.
Bringing production of mid-range tractors back to North America has gone down well with dealers, but Richenhagen said those same dealers told AGCO management they would like to see all MF and Challenger-brand tractors built on home turf. And the company intends to make that happen. “They want us to localize the product completely,” Richenhagen explained. “And that’s what the plan is.”
The Jackson plant will soon turn out the smaller 7600 Series MF and MT500 Challenger models as well, which means all MF and Challenger-brand tractors above 140 horsepower sold in North America will be built here. And there is already a plan in place to bring production of utitlity tractors to the U.S. “Sooner rather than later, we will be building small tractors here as well,” confirmed Crain.
In the meantime, AGCO will also continue to develop new machines and technologies to enhance the standings of both brands. This year, the company is spending U.S. $350 million on research and development and as much again on new capital investments like the Jackson plant expansion.
“If you know anything about product development, you don’t start seeing the goods until three or four years after you start spending the money,” said Crain. “What dealers are seeing right now is truly the tip of the iceberg. The best is yet to come in terms of products.”
“We know that farmers are conservative,” added Richenhagen. “Before you get them back (as customers), they watch you very carefully. You will also see, it’s like a locomotion; once it gets traction, then it will be good. What we hear from experts and what external test results show is there has never been a better range of products for Massey Ferguson than today.”
As AGCO goes forward in its attempt to recapture more of the North American farm machinery market, executives seem to have two major goals in mind: first, build locally. “We would like to have everything we sell in America produced in America,” said Richenhagen. “We’re getting there. This (Jackson plant expansion) is an important first step in that direction.”
Second, regain the MF brand’s reputation for quality. “We want to be number one in perceived quality by 2014,” he continued. “Which isn’t an easy target because our competitors don’t stand still.” †