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VIEW FROM THE TOP
AGCO FOCUSES ON DEALER, CUSTOMER EFFICIENCY
Editor's Note: John Shumejda is president and CEO of AGCO Corporation, the world's third largest agricultural equipment manufacturer. A part of a management group that formed AGCO, Shumejda has held key positions in the company before being appointed to his current position in 1998.

AM: AGCO has grown from infancy 10 years ago to yearly sales that have surpassed $3 billion. What's been the growth strategy at AGCO?

JS:AGCO Corporation has its roots in farm equipment with its heritage going as far back as the mid-1800s through many of our brands. However, its direct lineage is from the North American Allis-Chalmers Company. In 1989, that company, then known as Deutz-Allis, was sold to a management buyout group. The new company, named AGCO Corporation, began June 20, 1990, with its headquarters just outside Atlanta.

In the succeeding years, our management team led a series of 17 acquisitions of agriculture equipment companies throughout the world. Our revenue growth has been astounding -- from just $200 million the first year, to topping out at more than $3.2 billion. With the acquisitions, we've been able to market brands such as Massey Ferguson, GLEANER, Hesston, FENDT, AGCO Allis and White tractors, Willmar, Spra-Coupe and numerous short lines.

AM: Acquisitions continue in the ag equipment business. Are these mergers good for the industry?

JS: AGCO is still one of the largest tractor manufacturers in the world, and we want to continue that trend with profitable growth. It will probably take a couple of years for all the effects of the Case/New Holland merger to surface. Of course, divestitures in their lines will take place and AGCO will certainly look at those that pertain to the agricultural market. But, as we consider them an opportunity, we also have to study them to see how acquisitions will ultimately help AGCO and our dealers. Case's divestiture of Hay and Forage Industries has special implications to us since our Hesston hay line is manufactured there.

Consolidation and mergers are a fact of business today. With farm numbers shrinking and farm acres-owned growing, it only makes sense that business follows. Fewer and fewer people are making purchasing decisions, and we are looking at ways our dealers and company can help those decision makers become more efficient and profitable.

AM: With a depressed ag economy, what special marketing concerns do you face when introducing new products, such as the FENDT tractors and the new Eagle 8500 sprayer?

JS: We feel that now is one of the best times to introduce some of our most innovative units. Take for example our FENDT Vario Series tractor that we launched in Europe last fall and released in North America in February. With its stepless drive technology and impressive suspension system, this product will find its niche. It is interesting that while sales of medium and high horsepower tractors have been declining, FENDT's worldwide sales have actually grown. The Willmar Eagle 8500 sprayer is another example of how new products can increase efficiency, improve productivity and add to the bottom line. We are very excited about what these products can offer to customers.

AGCO has also revamped its finance and leasing system. By creating AGCO Finance, we are able to better serve our customers by providing them with special programs in this down economy. AGCO is also redirecting its sales force to better help dealers with sales, rather than burdening them with administrative tasks such as inventory. Even in this down economy, we are excited about our potential sales future.

AM: What special marketing tools are you using to promote your Fieldstar precision farming system?

JS: Farming today demands adequate technology. But as you know, technology can change at a moment's notice. Our Fieldstar precision farming system has evolved over the decade to be an integral part of our AGCO family. As the industry leader, Fieldstar is fast emerging as the standard. Fieldstar can be effectively used on AGCO brand products, as well as that of the competition. This year, Fieldstar will be available on our White planters and Willmar application units, and is already available on combines and tractors. Of course, early adopters are always the first to use and reap the rewards from technology. Large farmers who see the need to embrace technology have already begun to see Fieldstar's benefits. Making the system user-friendly and effective for farmers is a high priority, but our AGCO dealers must also be kept abreast of changing technology since they are partners. AM


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