As I watch the continuing saga of “should General Motors be saved?” or, “can General Motors be saved?” it reminds me of all the companies that have disappeared over the years.
Some of them deserved to fail and some of them did not. It seems that shortsighted management usually played a key role in the company’s demise, although that may be too simplistic.
Two names that came to my mind that are gone but still have a loyal following are International Harvester and Allis-Chalmers. With a little more thought, the list can grow quickly and easily to include Oliver and Minneapolis-Moline and many more. Did these companies deserve to fail? Should there have been a program to support them with taxpayer money?
After graduating from college, I worked for International Harvester, which was quite a departure for a John Deere loyalist like me who was raised on green tractors and implements. My reason for working for International Harvester was simple. They offered me a job and John Deere did not.
This was during the early 1970s when everything in this country seemed to be doing well while being involved in Vietnam. We were coming off Richard Nixon’s price controls, another story of questionable government intervention with poor results, and inflation was becoming a problem.
People were buying as fast as they could before the price went up again.
IH had a good lineup of tractors and implements but John Deere was a fierce competitor. The 4020 was still king and IH’s 856 and 826 were running a strong second. Allis-Chalmers, Case, Massey-Ferguson, and Oliver all had good products, too, but I knew who signed my paycheck. I have a soft spot for IH products to this day and, besides, I like the color red.
Before I get too excited and start selling you something that is not made anymore by a company that no longer exists, I will try to stay on subject here with the question of letting companies fail whether they deserve to or not
I will have to admit that as good as IH products were, John Deere set a fierce pace with innovation, design, and support. John Deere always seemed to be about one-step ahead.
That is not saying IH did not have innovation. There was no torque amplifier on a John Deere tractor or anything close to it. Turning up an IH diesel from its factory horsepower setting was commonplace. You turned up a John Deere diesel at your own risk.
The large IH combines of the early 1970s came with a hydrostatic transmission as standard when John Deere was selling gear drive. However, hydrostatic transmissions made the IH combine more expensive reducing its competitiveness. IH briefly owned the planter business with its Cyclo-planter until John Deere caught up and became dominant.
I am sure by now the John Deere fans are pounding the table wanting to tell me that, other than the Farmall M, IH never made a tractor that amounted to anything, but that just shows you the debate is still going on. More importantly, in the case of these two farm equipment giants, one failed and the other thrived. Why?
Around 1980, IH, which had been competing with John Deere in farm equipment and Kenworth, Peterbilt, Ford and Chevrolet in trucks, was crippled by an extremely long strike by the United Auto Workers union. Neither the management nor the union was going to give in to the other.
When the strike was finally resolved, IH never seemed to recover as its customers who needed new equipment had bought elsewhere. Next came the end of inflation and the farm crisis when everyone suffered.
Should IH have been saved? I hate to admit it, but my answer is no. Its problems were both internal and external. If the government were to step in to save IH, then what about saving Case, Allis-Chalmers and Oliver? They all had important reasons to survive, too.
The market place remains the best place to sort out those who succeed and those who fail whether it is farm equipment or farmers, automobile manufacturers or newspapers.
Those businesses with visionary leaders and a quality product will be rewarded and the rest are at risk.
Rye is a Farm News staff writer and farmer from Hanlontown. Reach him by e-mail at email@example.com.
Please Enter Your Facebook App ID. Required for FB Comments. Click here for FB Comments Settings page