Why The Demise of IH Ag Division?

ccguy · #1 12-02-2014, 08:39 PM

After reading Oscar Will’s book “The 50 Years of Cub Cadet”, I am mystified why more information wasn’t provided regarding the BIGGEST, EARTH SHAKING change to the most dominant player in the entire agricultural equipment sector of the American market – which I’d like to understand. I am aware that the economy was awful in the late 70’s, with high loan rates, farm prices were down with increasing consolidation taking place resulting in equipment sales plummeting. But they were also plummeting for Deere, Massey Ferguson, Allis Chambers, Gleaner, White, Case, Sperry New Holland, etc. I know IH had a recall problem with the 460, 560, and 660 tractors – and lost some market share – but they were still the MASSIVE, dominant, diversified, conglomerate powerhouse as ever - always three step ahead of everyone else. So why, even if IH had revenue issues, why would they sell the foundation, The Soul, of the entire corporation (Ag Division) when they could have sold off other lines of business such as their Consumer Division, Construction Equipment Division and/or their Truck/Diesel Engine Division? Why?

My grandfather who farmed 1+ sections in Leoti, Kansas (pop. -2000) from the 50’s-70’s (wheat/corn/milo) only used IH Farmall equipment. As a 12 year old kid in the early 70’s, I can still remember the joy, looking at his Ag magazines, gazing with delight at IH ads featuring a BIG RED 666 Turbo with HUGE wheels and a white enclosed cab– with the tagline on the bottom:

International Harvester. We help you feed the world.

ccguy

1994-1440
1976-#4

Shaner · #2 12-02-2014, 09:22 PM

Could not compete with john Deere. Cih or CNH still can't.

Cub Cadet 123 · #3 12-02-2014, 09:33 PM

I heard the big shots were bleeding the company dry for all it was worth, but don't recall the source.....sorry. That happened to several industries in my area and it seems like the innocent blue collar workers are always left out in the cold. Maybe we need a Robin Hood clause in the CEO's contract for a re-distribution of the wealth when they embezzle, mismanage, etc. from a company.

Cub Cadet 123

J-Mech · #4 12-02-2014, 09:40 PM

Quote:

Originally Posted by Shaner

Could not compete with john Deere. Cih or CNH still can't.

Incorrect. But it's cute that you think that.

IACubCadet · #5 12-02-2014, 09:57 PM

Quote:

Originally Posted by J-Mech

Incorrect. But it's cute that you think that.

HAHA, I was thinking the SAME thing!

Shaner · #6 12-02-2014, 11:12 PM

Quote:

Originally Posted by J-Mech

Incorrect. But it's cute that you think that.

Figured youd enjoy that...lol In a way...its true tho...at least around here. I've heard many reasons why they went under. Never read the books but terrible management and a bad economy was the main reason they fell that I know of.

bocephus1991 · #7 12-02-2014, 11:49 PM

The reasons Jon listed as to the demise of IH is right far as I know. IH tried to do to many diffrent things. Had they split off the divisions to keep each insulated from each other things may have been different. A lot of their manufacturing facilities were outdated, heck the owned mines that they got the ore from to make steel! Also their foundries were outdated as well. It was a perfect storm for failure that came together at the wrong time. I still feel that if they could have gotten the magnum out in the 70's like they wanted they would still be around today.

J-Mech · #8 12-03-2014, 12:20 AM

Quote:

Originally Posted by bocephus1991

I still feel that if they could have gotten the magnum out in the 70's like they wanted they would still be around today.

Well..... the 80's. They had it in mind but went with the 88's because of cost. Same machine, for the most part. Just without the powershift.

I agree with you about it being a perfect storm. That's a good explanation.

Shaner · #9 12-03-2014, 12:21 AM

Quote:

Originally Posted by bocephus1991

The reasons Jon listed as to the demise of IH is right far as I know. IH tried to do to many diffrent things. Had they split off the divisions to keep each insulated from each other things may have been different. A lot of their manufacturing facilities were outdated, heck the owned mines that they got the ore from to make steel! Also their foundries were outdated as well. It was a perfect storm for failure that came together at the wrong time. I still feel that if they could have gotten the magnum out in the 70's like they wanted they would still be around today.

I had the exact same thought. The magnum cab with the 88 series front end experimental tractor. The magnum series would have helped IH for sure.

bocephus1991 · #10 12-03-2014, 05:43 PM

I don't it know if any of you guys are on redpower.com or not , but there is a guy dirtboyz who built what probably would have been the tractor that IH would have came out with if they hadn't sold to tenneco. The back half is a magnum the front is a 88 series IH. I believe he put the dt466 in it. He said there wasn't alot to do to modify it to fit together. Here is a pic. He numbered it a 5388 . He told me at the time of the merger there was a 5188 at the Nebraska test site.