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McCormick finding success in return to U.S.


McCormick, the famed maker of the big red tractors, has for the past two decades has been passed from one European owner to another. Now, the company has been reincarnated and is finding initial success after its tractors were reintroduced to the United States 18 months ago.

From Pella, where McCormick Tractors International has forged an alliance with Vermeer Manufacturing Co., the tractor maker’s U.S. subsidiary is working to build its distribution network and convince farmers that its machines are here to stay.

In trying to start a nationwide network under the noses of much larger competitors, including Deere & Co., McCormick is taking on a tremendous risk, but one that could produce an outsized reward: The United States is the world’s largest market for farm tractors.

So far, McCormick managers said they have been swamped with inquiries from farmers and dealers who are eager to sell the machines and profit from a legendary name that apparently still carries a great deal of cachet.

“It’s been 30 years since anyone has seen the McCormick name on the side of a tractor in the U.S.,” said Chad Huyser, who is the company’s U.S. marketing manager. “We’re still in the mode of reacting to phone calls for people that want more information.”

Under the agreement, Vermeer workers help McCormick reassemble the tractors, which are build in England and shipped in pieces to the United States. Vermeer also handles warehousing and some distribution of tractor parts for the company. There are no financial ties between Vermeer and McCormick.

The move into the American market represents the latest in a series of quick expansions by Italy’s Argo Group, which bought the McCormick brand and some rights to tractor designs from Fiat SpA, the Italian conglomerate that is best known for its automobiles. Italy’s Morra family controls Argo.

McCormick is already selling its tractors in Western Europe and Scandinavia, Canada, Hungary, Israel, South Africa and Costa Rica.

In the United States, McCormick faces a two-pronged challenge: growing in an industry that isn’t growing very fast, and finding ways to fend off competitors that will “do whatever they can to keep another competitor out of the mix,” Huyser said.

So far, growth hasn’t been a problem, largely because of the strength of the McCormick name. The company’s managers, working from an office that is leased within Vermeer’s headquarters, said 155 dealers have agreed to sell its tractors, including 11 in Iowa. Huyser said he hopes to have 240 dealers within a year.

“The McCormick name had a very good following throughout the 20th century, and there were plenty of people who were very happy to that that name back on a tractor they can buy,” Huyser said. “We quickly realized that this tractor that we bought from Fiat had a very good presence in the U.S.”

To win more dealers, McCormick is arranging its dealer network in a way that is atypical of the agriculture equipment industry: The company won’t let dealers be located within 15 miles of one another.

“To be successful, dealers have to have a big enough area so that they can make investments in services, parts and a showroom and not be worried about a McCormick dealer down the street,” Huyser said. “We’ll give them a defined territory, and let them work that area without letting other dealers work there.”

So far, the company is finding its best success in South Dakota, Iowa, Nebraska, Kansas and parts of the Ohio River valley, including Kentucky and Indiana.

The company is currently selling models whose engines range in size from 20 horsepower to 200. The price tags run from $12,000 to $110,000.

Last year, Argo sold about 25,000 tractors, and McCormick-brand machines accounted for about 30 percent to 40 percent of the total, Huyser said.

Even with the initial success and its aggressive goals, which include becoming one of the five biggest tractor retailers in the country, Huyser acknowledges that the strong start in signing up dealerships, which he refers to as a “honeymoon period,” isn’t likely to last. Huyser estimates that McCormick is “probably sixth- or seventh-biggest” seller of tractors in the United States now.

“It’ll end, and signing the next grouping of dealers won’t be as easy,” he said.

Even if McCormick meets its dealership goals, it would still leave the company with about half the number of dealers as those belonging to competitors, which include former parent Case IH, New Holland and Deere.

To spur further growth, the company, whose U.S. division has 29 employees, 20 of whom work in Pella, is planning to introduce more powerful tractors.

One of those models has a 250-horsepower engine, which Huyser hopes will spur sales west of the Rocky Mountains, where farms are much larger than in the Midwest and thus require bigger machines. Huyser expects those models to arrive in time for the fall trade shows.

McCormick’s tractors are being built in Doncaster, England, in a plant that was constructed by American Cyrus McCormick Jr. in the 1930s. Drivetrains for the machines are being built at a plant in St. Dizier, France, located about 90 miles east of Paris.

Engineering work for some of the first tractors that McCormick Tractors International produced was done at a facility in Chicago. Engineering work for new models is now being handled in Doncaster, which is located about three hours north of London.

“We grossly underestimated how well the name would be received,” Huyser said.


1831  Cyrus McCormick invents the first mechanical reaper and demonstrates its capabilities on a Virginia farm. The machine is able to do the work of six men. He later offers farmers a guarantee that his reaper can cut 15 acres a day and save a bushel of wheat per acre.

1871   McCormick, his company now consolidated in a three-story factory in Chicago, is producing and selling more than 10,000 units annually. The McCormick Reaper Works plant is destroyed, along with most of the city, on Oct. 8 of that year by the Chicago fire. McCormick rebuilds within a year.

1902  Growing competition sparks consolidation. International Harvester is formed by Cyrus McCormick Jr. by combining his company with several other farm equipment manufacturers, including Deering, Champion, Milwaukee and Plano. Each of those companies continues to maintain separate brands and independent dealer networks.

1906  International Harvester introduces its first tractors, the Type A and Type B models. Fourteen are shipped in the United States.

1919  International Harvester begins selling the McCormick Farmall tractor

1930s  Cyrus McCormick Jr. opens a manufacturing plant in Doncaster, England. The factory produces ammunition during World War II. After the war, it continues to build McCormick Farmall tractors.

1936  International Harvest begins painting its McCormick tractors red, changing from the gray it had previously used because the brighter color was believed to be safer.

1985  Tenneco, an affiliate of the J.I. Case Co., buys International Harvester’s farm equipment division, including the McCormick line of tractors, its trademarks and its Doncaster factory.

1994   Case IH is spun off as a separate, publicly traded company.

1999  Fiat SpA, the Italian car manufacturer, purchases Case IH and merges the company with its own tractor company, New Holland. The European Commission allows the purchase, but requires Fiat to makes several divestitures, including the McCormick brand, the Doncaster factory and the design, technical and commercial rights to two Case tractor lines, the CX and the MXC.

2000  Italy-based Argo Group, owned by the country’s Morra family, buys the Doncaster facility and later adds Case New Holland’s transmission plant in St. Dizier, France. The purchases make Argo the fourth-largest tractor maker in the Western world.

2002  McCormick tractors return to the United States, arriving in Pella. The company has set up an alliance with Pella-based Vermeer Manufacturing Co.

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