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Deere & Co.

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Deere & Co. (collectively named John Deere) is one of the world's largest manufacturer of farm equipment next to CNH Global, and a major American manufacturer of forestry and lawn and grounds care equipment. In addition, the company is one of the front-runners in the construction equipment field. In the construction sector, Deere & Co. produces backhoes, skid steer loaders, dump trucks, waste equipment and excavators. It also manufacturers harvesters, feller bunchers and knuckleboom loaders for forestry. Its line-up of agricultural equipment is more extensive and covers tractors, tillers, harvesting machinery, and soil-preparation machinery.[1] Aside from equipment manufacturing and distribution, Deere & Co. is one of the largest finance companies in the United States.[2] The company is well known for its logo featuring a leaping yellow deer on a vibrant green background.


[edit] History

Born in Rutland, Vermont, on February 7, 1804, John Deere originally began as a blacksmith in his home state. He gained considerable reputation for the care and precision he applied to all his work. As a consequence of two workshop-destroying fires and a slump in the labor market in Vermont in the mid-1830s, Deere made the decision to collapse his business and relocate to Grand Detour, Illinois; his family would later join him. Within two days of his 1836 arrival to the village, Deere had built a workshop to serve the community.

[edit] Self-Scouring Plow

One of the biggest issues that the pioneers from the East were experiencing in their new Midwestern village revolved around plowing. Specifically, the cast iron plows they had brought were suitable only for the soft, sandy Vermont soil; they were inefficient for plowing the sticky, clingy Midwest soil. Understanding his fellow settlers' frustration, John Deere fashioned a self-scouring, highly polished plow—it was fabricated using the steel from a broken saw blade. This was Deere's first major product development, and thus, Deere & Co. was founded in 1837.

[edit] Pre-fabricated Tools

Following the invention of the self-polishing plow, Deere continued to build his company on his forward-thinking ideas. The practice of blacksmiths in his day was to manufacture equipment for customers only when they had placed an order. Deere decided to go a step further: he would produce his plows before they were ordered, enabling him to take them to the country and sell them directly. His new sales practice gained his self-scouring plows enormous popularity.[3]

[edit] Rapid Expansion

By 1847, John Deere was producing 1,000 plows a year,[4] due in part to a five year collaboration between John and Grand Detour settler John Andrus that dissolved the following year. A factor contributing to the company's growth and expansion was John's firm belief in the importance of development and improvement of products. Within three years he was manufacturing 1,600 plows all specified to work in different soil conditions. Deere was even quoted as saying, "I will never put my name on a plow that does not have in it the best that is in me." [5]

[edit] Relocating and Restructuring

In 1848, as a result of Deere's new partnership with Robert Tate, the factory was relocated from the frontier of Grand Detour, Illinois, to Moline, Illinois. The proximity to the Mississippi River was advantageous for transportation and waterpower purposes. The partnership of Deere & Tate would later expand with the addition of financially savvy friend John Gould. Deere, Tate, & Gould dissolved around 1851.

[edit] From Father to Son

In 1858, John Deere's son Charles, formerly a bookkeeper for his father, took control of the company at the age of 21. This change of hands came about during the financial crisis known as the "Panic of 1857," as Deere Jr. was known as a sharp businessman with a keen sense for finances. Had it not been for this intervention, it is possible that Deere & Co. would have collapsed due to high material bills and cash flow issues.[6] Instead, the company continued to grow, and in 1868, Deere & Co. was incorporated. In title, John Deere remained president until his death in 1886 at the age of 82, when Charles Deere officially inherited the role. At the time of Deere's death, the company was manufacturing cultivators, steel plows, corn planters and cotton planters and an assortment of other tools.[7]

[edit] Novel Plows

In 1874, the Gilpin sulky plow, which could plow three acres in 12 hours, was introduced. In 1898, the Deere gang plow was unveiled—using four horses instead of three, it could plow six acres in 12 hours.[8] By the early 1900s, Deere plows began to be powered by steam engines.

[edit] Charles Deere's Takeover

During his presidency from 1886 to 1907, Charles Deere expanded the company to form retail centers, known as branch houses, to cater to independent retailers. 

[edit] Butterworth’s Mergers and Acquisitions

After Charles Deere died in 1907, his son-in-law William Butterworth became president of Deere & Co. In 1911, Butterworth led the company to acquire Van Brunt Manufacturing Co., based in Horicon, Wisconsin. This company was a producer of the first working broadcast seeder and grain drill.

Also in 1911, Deere & Mansur works, a company established by the company in 1877 to make corn planters, merged with Deere & Co. Another merger took place the same year between Deere and Joseph Dain’s hay-making tool company.

It was Butterworth's purchase of Waterloo Gasoline Traction Engine Co., one of the first tractor manufacturers, in 1918 that caused Deere & Co. to become the largest tractor manufacturer in the world.[9] As World War I brought a high demand for food, farmers were led to rely on tractors rather than animal power. The year Deere & Co. acquired Waterloo, it sold 8,000 Waterloo Boy tractors.[10]  The introduction of Deere's first tractor called the Model D followed in 1823.[11] 

[edit] Wiman, New Products, and Profits

In 1928, John Deere’s great-grandson Charles Deere Wiman took over as president of Deere & Co. Wiman grew the company rapidly by concentrating on engineering and product development. Under his leadership, the company achieved $100 million in gross sales for the first time in its history.[12]

In the 1930s, the John Deere combination unit was introduced. This machine, able to bed, plant, and fertilize cotton, was 10 times as fast as four men using four mules.[13]

Another development, the four-row tractor corn planter, enabled 40 to 50 acres a day to be planted and fertilized by one man.[14]

Despite the Great Depression, Deere & Co. reached $100 million in sales, as a result of the introduction of new products.[15]

[edit] Growth After World War II

In 1952, Deere & Co. became the first farm equipment producer to modify a self-propelled combine to be used for picking and shelling corn. Three years later, the company was one of the 100 largest manufacturing companies in the United States.[16]

Wiman died in 1955, and William A. Hewitt, Wiman’s son-in-law, became president and CEO. During his presidency, the company continued to grow and expand. Hewitt was focused on increasing the communication between the company’s decentralized operations in order to coordinate them.

During this period, Hewitt promoted Deere’s controller, Elwood Curtis, to vice president.

In the mid-1950s, Hewitt led the company’s manufacturing operations overseas. He believed that expansion was necessary to avoid being forced out of the market. The first company to be acquired was a German tractor firm called Heinrich Lanz that was acquired cheaply due to its financial troubles. Following this, other acquisitions and the construction of new plants occurred in France, Spain, Argentina, Mexico, and South Africa. Further expansion into Canada, Western Europe, and Latin America took place during this period.

In 1957, Hewitt hired a Finnish architect named Eero Saarinen to design a new headquarters—it was completed in seven years. The new building became a tourist destination, especially for farmers.

[edit] Diversification into Finances and Other Markets

By the late 1950s, at the recommendation of vice president Elwood Curtis, the company began diversifying into finance. In 1958, John Deere Credit was founded as a financer of farm equipment dealerships.

A decade later, John Deere Credit acquired Fulton Insurance Co. in New York.

The insurance and financial sector became important to Deere, as it helped offset the company’s losses occurring from low equipment sales. Fluctuations in farm equipment sales were common due to unfavorable weather, agricultural prices, and government policy.

In the late 1950s, Deere & Co. began manufacturing construction, road maintenance, and logging machinery. Growth ensued, and by 1969, 3,700 independent dealers had been established throughout North America. The same year, the company began establishing parts and service centers through its dealers.

[edit] Economic Loss and Volatile Employee Relations

In spite of the company’s expansion efforts, it lost money in 1966 and 1967, due in large part to overseas operations. In 1968, losses continued as bad weather and decreasing crop prices impeded farmers from purchasing new equipment. Additionally, the United Auto Workers (UAW) staged a six-week strike following Deere’s refusal to sign a contract similar to the one the UAW had with Caterpillar Tractor Co.[17]

The UAW and Deere came to an agreement whereby the company would implement an inverse seniority plan, paying senior workers up to 95 percent of their earnings if they volunteered to be laid off for a year. The plan, which began in 1967, resulted in the 1,698 lay offs in three years.[18]

[edit] Product Line Additions and Profits Overseas

Through the 1960s and early 1970s, Deere increased its offering of lawn and garden products to include snowmobiles, hand tools, portable heaters, lanterns, chain saws. In addition, the company introduced the John Deere bicycle in an attempt to break into the growing market.

In 1972, Deere & Co. earned a profit overseas for the first time, resulting from an increased demand in farm equipment abroad. Three years later, international plants were responsible for $681 million of the company’s sales. The same year, the company implemented a seven-year, $1.8 billion plan to increase the capacity of factories and plants by 30 percent.

[edit] Conflict and Economic Downturn in the ‘70s

The 1970s were a time of conflict between Deere and the UAW. As the company began mechanizing its manufacturing operations and cutting back costs, many workers were laid off.

In 1976, the UAW went on strike for six weeks, reducing inventory significantly during a period of high demand, and causing the company to lose money. Three years later, in October 1979, workers staged another strike, demanding higher pay and more paid vacation time. During this strike, the plants were closed for three weeks.

During this time, Hewitt was still focused on further international expansion. In 1978, he committed $350 million to the cause; however, start-up costs on the company’s new line of German tractors were high and foreign exchange was fluctuating, resulting in major losses.[19]

Another expansion attempt was made in the late 1970s as the company doubled the size of its Davenport, Iowa plant and added 20 products to the construction equipment line. By 1982, however, high interest rates cause the construction equipment business to falter. That year, the company was also affected by a farm recession.[20]

[edit] Unstable Times

Also in 1982, Hewitt retired, passing on the roles of president and CEO to Robert Hanson, the first CEO unrelated to the Deere family.

To stay afloat during this time of economic crisis, the company incurred a large amount of short-term debt. Hanson also cut spending by 30 percent; much of that was cut from labor costs. Between 1980 and 1983, he laid off 40 percent of Deere’s employees.[21]

In 1982, the Waterloo Tractor plant, which had been newly robotized, began to lose money after only a year, and continued to do so until 1986.

During this economic downturn, the company continued to focus on its financial sector, acquiring Central National Life Insurance Co. and expanding John Deere Credit Co. to include leasing. Additionally, it attempted to strengthen its relationship with Japan in 1983 by importing Hitachi construction equipment into North America. The following year, Deere & Co. acquired a rotating combustion engine business from Curtiss-Wright Corp., and bought rights to an agricultural financing service known as Farm Plan.

As agricultural equipment sales continued to decrease during this time, the company relied on the lawn tractor sales, European business, and financial operations. Yet by 1983, the company still held only a slight share of the market in Europe.[22] 

In 1985, Deere simplified the design of its basic engine, and, as a result, 480 workers were laid off. The same year, approximately 20 percent of the company’s dealerships in the Midwest were shut down.[23]  A John Deere tractor that once could easily be sold for $100,000 fell in value to $70,000.[24] 

In 1986, a total of 12,000 members of the UAW were locked out after attempting to return to work when Deere walked away from negotiations. During the lockout, some UAW plants were shut down and others tried unsuccessfully to operate with salaried personel doing bargaining unit work. Deere lost $99 million in 1987 as a result of the strike and weak sales.[25] In the same year, Deere also won a considerable contract for $11 million dollars to design an implement for repairing runways from bomb-damage.[26]

[edit] Financial Recovery

In 1987, presidency of Deere & Co. was given to Hans W. Becherer; Hanson remained CEO. A year after Becherer accepted the position, the lower American dollar and an improvement in the agricultural economy translated into increased sales for Deere. That year, the company’s sales increased 30 percent to $5.4 billion and its net income was $315 million, which was a $414 million turnaround in one year. Tractor sales increased 90 percent, and the sale of harvesting machinery increased three-fold.[27]

The company’s recovery was evidenced by its largest-ever selection of new agricultural products in 1988 and 1989, when it spent approximately $16 million to display 44 new combines, tractors, and balers in Denver and Palm Springs, Colorado.

During this period of economic strength, Deere & Co. began acquiring companies. In 1988, Deere and Hitachi embarked on a joint venture called Deere-Hitachi Construction Machinery, formed to produce and market excavators. The following year, the company acquired Funk Manufacturing, a powertrain component manufacturer.

[edit] Restructuring Under Becherer’s Leadership

After having become CEO in August 1989, Becherer was named chairman in June of 1990 following Hanson’s retirement. He took on the role in the wake of a difficult financial period for the company. In 1991 and ’92, sales dropped due in part to a recession, and Deere’s construction equipment sector was greatly affected.

In response, Becherer implemented a major restructuring program in 1991, following by a research and development program in 1992—in two years, $400 million was spent on these plans. The establishment of new divisions, product offerings and acquisitions took place as a result.

[edit] Lawn and Grounds Care

A year after the company’s 1990 establishment of the Worldwide Lawn and Grounds Care Division which was run separately from the agricultural sector, it purchased a majority stake in German company SABO Maschinenfabrik AG. This company was a manufacturer of walk-behind mowers and commercial lawn mowers.

In 1994, Deere & Co. acquired the Charlotte, North Carolina-based Homelite division of the conglomerate known as Textron Inc. This manufacturer of handheld and walk-behind power products began generating nearly as much profit as the industrial equipment division.

The following year, the company unveiled the “Sabry by John Deere” line, which consisted of mid-priced lawn tractors and walk-behind mowers.

In 1996, the Lawn and Grounds Care Division was renamed; it was now known as the Worldwide Commercial & Consumer Equipment Division.

[edit] Advancements in the Agriculture Business

In 1992, Deere & Co. unveiled its 6000 and 7000 series tractors, thought by many to be the company’s most important products since 1960.[28] The product line was comprised of six tractors with horsepower ranging from 66 to 145. These tractors were built with the largest cabs available in the industry, with a strong emphasis on operator comfort. The cabs included comfortable seats, stereos, air conditioning, and, to increase visibility, 29 percent more glass.[29] In 1994, the company introduced its 8000 tractor series, which included the 8400, the first 225 horsepower row-crop tractor in the world.[30]

Around this time, Deere & Co. shifted its focus to the sale of tractors outside North America. This plan was initiated in 1993 with a marketing agreement between Deere and Zetor s.p., a Czech Republic-based producer of tractors. The agreement stated that Zetor would supply low priced 43 to 93 horsepower tractors to Deere, who would then sell them to Latin America and Asia.

The three-year period following 1993 was also a time of record sales and profit for the company, as farmers were once again making money and replacing their old farm machines with newer Deere equipment. From 1993 to 1996, agricultural equipment sales increased from $1.55 billion to $2.75 billion—an increase of more than 75 percent. As well, by 1996, sales outside North America had risen to 28.6 percent of overall sales, from 22.8 percent in 1989.[31]

In 1996, Deere made the largest single agricultural sale in its history by selling $187 million worth of combines to Ukraine.[32] This marked the beginning of a profitable period for the company. In 1997, Deere & Co. embarked on a joint venture, John Deere Jiamusi Harvester Co. Ltd., with Chinese company Jiamusi Combine Harvester Factory. Deere held a 60 percent interest in the venture, which would produce smaller combines to be exported in the Asia-Pacific region.


In 2000 banking and construction industry executive, Robert Lane, succeeded Hans Becherer as Deere's CEO. The company also changed the design of its logo from a deer appearing to land to a deer visibly leaping forward. [33]

[edit] Competition with Caterpillar 

In the North American market, Deere was dealing with direct competition from Caterpillar who entered the agricultural market during the late 1980's. At the time, Caterpillar was partnering with Claas KGaA in developing a large commercial sized combine. Though Deere provided more dealers that Caterpillar, Caterpillar offered on-site servcie. Deere and Caterpillar also each introduced their own skid-steer loaders in the face of the rising popularity of skid steer loaders being manufactured by Bobcat.[34] 

By 1998 a 20 year low in grain prices ended the company's path to financial recovery. Machinery not being sold started piling up on dealer lots. Deere once again had to lay off employees and put its focus into its lawn care business. Deere's competitors relied on diversification to survive economic hard times. For example, Case Corp and Caterpillar both extended their financing and distribution networks to cover other sectors. 

Later in 2000 the company was sued by RDO Equipment Co. one its dealers. RDO accused Deere of unfairly purchasing up other dealers of Deere's construction equipment. Deere had been busy buying out its own dealers to leverage competition with the network of large companies that Caterpillar sold its construction equipment through. Regardless of competition and weak market conditions, Deere had a net income of $485.5 million for the 2000 fiscal year on total sales of $13.1 billion.[35] It was also selected by Forture magazine as the United States' most admired company in the industrial and farm equipment category.[36]

[edit] Investing in Irrigation

In 2001 Deere purchased Richton International for $170 million. The acquisition of Richton International, an irrigation supply division, was partnered with the purchase of McGinnis Farms in order to create and a landscaping and irrigation supply division.[37]

[edit] The Company Today

171 years after the birth of the first self-scouring plow, Deere and Co. employs approximately 50,000 people.[38] It operates worldwide, with almost 5,000 independent retail dealers in more than 160 countries.

In addition to its joint venture with Hitachi, the company has branched into several new markets, including the ownership of the Nortrax group of companies.

Today, the company’s main divisions are the Worldwide Agricultural Equipment Division, the Worldwide Industrial Equipment Division, the Worldwide Commercial and Consumer Equipment Division, Deere Power Systems Group, the Worldwide Parts Division, John Deere Credit, John Deere Insurance Group, and John Deere Health Care.

It is an ever-growing Fortune 500 company listed on the New York Stock Exchange. Presently, the elected chairman of the board is Robert W. Lane, named CEO of the year in 2006.

The company’s proud to announce that the worldwide net sales and revenues for the first quarter increased by 11 per cent, to $6.767 billion as compared to $6.119 billion last year.

Samuel R. Allen, the chairman and chief executive officer of John Deere admits that the company has started 2012 on a strong note, owing to a record performance. According to Allen, the results are the evidence of the skillful execution of operating and marketing plans. The numbers also stand for an enthusiastic response of the international clientele to John Deere’s complex line of equipment. In order to maintain such a high level of execution, Allen continues, the company had to introduce new-product launches and greatly expand their global market presence. Allen also pointed out that Deere expanded or modernized its factories in the U.S. and other countries in the world.

The factors influencing the outlook for the company’s construction equipment and forestry equipment include the general economic conditions combined with the real estate and housing prices and consumer spending patterns. The level of non-residential and public construction also affects the results of John Deere’s forestry and construction segment. One also has to consider the possible impact of pulp, paper and lumber prices on the process of the forestry equipment production. Finally, the company’s results also depend on the changes in the level of employee retirement benefits as well as the changes in market values of investment assets followed by the level of interest rates, that could influence the retirement benefit costs.

[edit] Equipment List

- Forwarder
- Riding mower
- Aerator
- Four-wheel drive loader
- Roller harrow
- Ag loader
- Front-folding drill
- Rotary cutter
- Air compressor
- Garden tractor
- Rotary hoe
- Air drill
- Generator set
- Rotary mower
- Air hoe drill
- Greens mower
- Round baler
- Air seeder
- Handheld blower
- Scraper
- Articulated dump truck
- Harvester
- Skid steer loader
- Attachments
- Hay rake
- Skidder
- Auger platform
- Hedge trimmer
- Snowthrower
- Backhoe
- HMD transmission
- Split-boom line trimmer
- Blower
- Independent-deck mower
- Sprayer
- Bunker rake
- Infinitely Variable Transmission
- Square baler
- Chain saw
- Integral drill
- Tedder
- Chisel plow
- Integral ripper
- Telehandler
- Combine
- Irrigation engine
- Tractor
- Combine cab
- Knuckleboom loader
- Tractor loader backhoe
- Combine platform
- Landscape loader
- Utility vehicle
- Compact track loader
- Large-area reel mower
- Walk-behind mower
- Compact utility tractor
- Large square baler
- Waste equipment
- Core pulverizer
- Lawn tractor
- Wheel loader
- Corn head
- Log loader
- Windrower
- Cotton picker
- Mini excavator
- Zero tail swing mower
- Cotton stripper
- Mobile excavator

- Crawler dozer
- Moldboard plow
Specific Model Categories
- Crawler loader
- Motor conditioner
- John Deere crawler tractor
- Crawler tractor
- Motor grader
- John Deere hydraulic excavator
- Cultivator
- Mower
- John Deere loader backhoe
- Diesel engine
- Multi terrain loader
- John Deere midi excavator
- Drawn plow
- No-till air drill
- John Deere mini excavator
- End-wheel drill
- No-till drill
- John Deere skid steer loader
- Edger
- Planter
- John Deere wheel loader
- Excavator
- Planetary drive transmission

- Fairway mower
- Plow

- Feller buncher
- Powershift transmission

- Field cultivator
- Potato shredder

- Field rake
- Press-wheel drill

- Flail mower
- Pull-type scraper

- Flail shredder
- Pump drive transmission

- Forage harvester
- Push mower

- Forestry excavator
- Reversible plow

[edit] Used John Deere Equipment for Sale

Search for used John Deere equipment being sold at Ritchie Bros. unreserved public auctions.

[edit] References

  1. Deere and Company. 2008-11-24
  2. John Deere Story. Deere. 2008-09-09.
  3. John Deere Story. Deere. 2008-09-09.
  4. John Deere Story. Deere. 2008-09-09.
  5. Deere and Company. 2008-11-24
  6. History. Deere. 2008-09-09.
  7. Deere and Company. 2008-11-24.
  8. Deere Company History. Funding Universe. 2008-09-09.
  9. John Deere Story. Deere. 2008-09-09.
  10. Deere History. Funding Universe. 2008-09-09.
  11. Deere and Company. 2008-11-24
  12. Deere Company History. Funding Universe. 2008-09-09.
  13. Deere Company History. Funding Universe. 2008-09-09.
  14. Deere Company History. Funding Universe. 2008-09-09.
  15. Deere Company History. Funding Universe. 2008-09-09.
  16. Deere Company History. Funding Universe. 2008-09-09.
  17. Deere Company History. Funding Universe. 2008-09-09.
  18. Deere Company History. Funding Universe. 2008-09-09.
  19. Deere Company History. Funding Universe. 2008-09-09.
  20. Deere Company History. Funding Universe. 2008-09-09.
  21. Deere Company History. Funding Universe. 2008-09-09.
  22. Deere and Company. 2008-11-24
  23. Deere Company History. Funding Universe. 2008-09-09.
  24. Deere and Company. 2008-11-24
  25. Deere Company History. Funding Universe. 2008-09-09.
  26. Deere and Company. 2008-11-24
  27. Deere Company History. Funding Universe. 2008-09-09.
  28. Deere Company History. Funding Universe. 2008-09-09.
  29. Deere Company History. Funding Universe. 2008-09-09.
  30. Deere Company History. 2008-09-09.
  31. Deere Company History. Funding Universe. 2008-09-09.
  32. Deere Company History. Funding Universe. 2008-09-09.
  33. Deere and Company. 2008-11-24
  34. Deere and Company. 2008-11-24
  35. Deere and Company. 2008-11-24
  36. Deere and Company. 2008-11-24
  37. Deere and Company. 2008-11-24
  38. John Deere History. Deere. 2008-09-09.

[edit] External Links