ORANGE paint could be a special order option.

There's no way that would hurt the stock prices.

And it might even sell a few more tractors.

 

There you go....thats what I hate about modern corporate thinking...Its all about "stock price"  its no longer about making a fair profit by providing quality goods and services, taking care of your customers, and treating your employees as  more than just an "expense"...  If a good stock price was to be obtained by doing all of the opposite of what I just described, no doubt CEO's would do it.  "Stock Price" is too much tied with perceptions.  God help  Marty if those perceptions change.

 

That is the short term way for sure..... Most of these types are in it for the short term, they want to get a quick payout up front, and a package on the back end. Then, it's off to the next company....

 

Having said that, the truth is that you can't save your way to prosperity.  At some point it does become cannibalistic and things go south. Marty realized that before he took the job, and you can bet his exit strategy is already planned.

 

The only question for him is: "How much money can I take out of this place before I go..."?

 

I agree with your position but AGCO has to compete in a "Global Economy" and unfortunatly Allis is not a Global brand like Massey is.  I read an article where Mahindra is positioning themselves to be the worlds largest seller of tractors and being located in India they already have a price advantage over American producers.

So Allis isn't Global but Valtra is? Doesn't fly with me. I only heard of Valtra cause AGCO introduced it here. Did AGCO introduce Allis to Europe? I doubt it but in any case Valtra isn't global no matter how you try and tell me it is.

There would probably be some dumb___ (fill in the blank with the expletive of your choice) that would insist on a massey decal on it for you. That doesn't cut the mustard in my view.

Red decals on the Gleaners is a real slap in the face, too. Our dealer is supposed to be looking into getting orange replacements for at least a couple of machines they sold last month. I imagine if either one of them shows up with MF referenced on them anywhere, there will be something hit the fan.

You gotta keep the punches above the belt.

You mean to tell me they would sell a certain colored tractor in South America because that is what was popular there? Perish the thought. This must be stopped. That's not global thinking. Surely you meant they were selling red or yellow tractors cause red and yellow are global.

 

Good one!

The article seems to say that they did not do much R&D or manufacture much.  Then later it states that they are starting to do more with the MF aquisition.  I would say that they do plenty of R&D now with the new large series of tractors as well as the large Challenger.

Yep, I remember that now but the same applies. They gutted the company for what they could get then dumped it. They might not have all been Deutz but someone was they and they gutted it whether it be Deutz, Allis leadership itself (Scott) or stockholders. 

That's the rub when they go public.

I could not see a farm equipment company being a lifestyle business though.  They need to make money in a ruthless business.  If they aren't ruthless too, they won't be there to participate.

At least DA and Agco got the orange to survive a little longer after Allis Chalmers, (yes, AC) dumped it.

I don't agree. There are vultures who buy up companies for one reason. To gut them. Every company AGCO has bought they SEEM to have gutted. Any how you look at it AGCO is off my list.

Once upon a time, there was a guy who had the same idea with automobiles.

Simple, inexpensive to purchase, cheap to operate and repair...that guy sold millions of them.

Can anyone say "Henry Ford, and his Model T"? 

 

I was thinking the All-Crop...

 

Bryon,

You and Spud are saying the same thing.  To "increase shareholder/owner value" is another of way of saying  "lining their pockets and raising stock(prices)". What you have just rightly pointed out the short-term, short-sighted methods of doing it.

 

In publicly owned companies, the CEO has two obligations:  (1)Running the business in a manner that insures short and long term profitably,  (2)Increasing shareholder value (stock price).  Often these two task compliment each other, sometimes they conflict.  Sometimes one task is given more undue attention over the other.  Seems to me these days task #2 gets too much attention leading to the practices you mention at the sacrifice of task #1.

 

If I ever owned a large company, dont think I could ever make it public for these reasons. I am a task  #1 man thru and thru.

 

legally- the management of a company owes a legal obligation to shareholders to maximize value. that simple- they can and are reg sued for failure to do that.

 

i own 1 acgo tractor and a mower/cond., and 2 acgo allis tractors. if we wanted aorange paint, we should have bought more of them. that simple.

 

Anyone who has studied basic statistics knows that the only place to go, once you have REALLY reached the MAXIMUM, is DOWN....

That's why it's a mistake to go public sometimes and there were 4 times more orange tractors sold in the US than red and yellow combines. 11 times more Gleaners with orange stripes. You're not making sense and neither is AGCO. Think about it a while.

Agree with Lonn,  Sometimes the fiduciary responsibilty  to increase stock price results in actions opposite of what the actual business is doing.  Sometimes "buying more of them" has no effect.

 

Consider this..a company may be doing just fine...selling lot of product, making good money with nothing in the mid term future seeable such as foriegn competition or higher taxes that would change it.  However since the stock price is flat due to reasons unrelated to the performance of the company; lets say inflation for instance, management in its goal to "increase shareholder value" decides to offfshore..They announce how much MORE money this SHOULD make them in the future.  The market goes abuzz, the stock price rises.  Mission accomplished. This move has nothing to do with being "competitive", or trying to stay afloat. Sucks to be you if you are going to lose your job.   Thats capitalism in America today. 

 

 

A global company and a global brand are two different things.  I am not defending AGCO and I don't like what they are doing any more than you do but it's all about brand recognition.  Go ask any person on the street if they have heard of Massy and then ask them if they have heard of Allis.  I'd bet money Massey gets the most votes.

Parasite is a great way of describing stockholders today. They will suck blood from the host not caring if it kills the host or not. If it does kill the host they move on to another. If it doesn't then they'll stay and continue to live off of others hard work. It's the system we are "blessed" with and I don't see anyway out. That is until we end the Fed. OK, now I've officially crossed the political line. That's enough from me.

 

my point is, they have a legal duty to make the most out of what they have- for the shareholders. a lot of you are retired or have 401k plans- you realize that you want the most production out of your investments so you can live on the money, right?

 

right or wrong fellas, this is the law.

 

 

and lonn, i think i was making sense- what i am saying is that i own 3 agco tractors. how many that complain about them dropping orange own any? what i said is if people were really upset about it, we should have ordered 10x more and saved the color based on demand.

 

i love AC, but they are just a means to an end for me. i dont get a premium for running ac- i have never been asked by my buyers what tractors i run. they are tools. if you like the tool- i can see from a purely objective point of view that the color shouldnt matter- it is the machine you are buying. if you like a ford truck and hate chevy, etc- i doubt you would buy an orange chevy just because you couldnt get that color in ford. we are talking about the machine itself- i doubt it knows what color it is.

 

and- the federal reserve has exactly zero to do with the laws of corporations- this stuff was set up a long time ago- i spent a long time studying them a long way back- you are right about us being stuck with the system though Lonn- corporations move to better states based on the laws in those states- at one point almost all major corporations were incorporated in delaware- most big players still are bc that state decided they would have the most business friendly laws for them.

 

i dont fault management for trying to maximize shareholder value- i expect it- i want to retire someday and stock growth is what most of us bank on one way or another (read- insurance here as well)

 

Don't blame stockholder for management stratigies. If your company has a retirement fund that they manage, (not a 401K) you are holding stocks even if you didn't pick them. A diversified portfolio in a mutual fund may well include "agricultural sector" stocks so you may own stock in John Deere or Agco right now. LOL

 

And as far as saving orange if we bought more tractors, they were already Agcos best selling brand in N.A. and they dumped they it anyway, I'm sure if they were selling 10 orange tractors for each red or yellow it would not have changed anything.

If your 401K manager came and said that we are trying to decide between investing in a successful company or investing in an effort to bring back Studebakers because there are people out there that like them and damn the cost, it is the right thing to do, which would you prefer he did?

That's why I said We are "blessed" with this system, meaning we are stuck with it and I don't know a way out. We are all part of it like it or not.

You don't make sense because you are OK with a decision AGCO made that devalues your orange AGCO tractors and because AGCO orange was selling 4 to 1 over AGCO yellow and red combines you say we didn't buy enough. Did we buy enough yellow Challengers in the US? How about red Masseys? That's why you don't make sense. 

Also if you really studied how money flows you will see that the answer to many, many of our problems rests with the Fed. But you have to dig deeper than just looking at how a corporation works to understand how the Fed has kept everything in la la land. What exactly was the original purpose of corporations clint? They don't meet that original purpose at all today so to compare corporations of today to those early in our country's history is comparing apples to oranges.

Anybody who relies on money made from nothing for their retirement relies on smoke and mirrors. You might get lucky despite yourself but it would be just luck. The luck is in the timing and has nothing to do with real work.

This system is coming to an end. Socialists have taken over a long time ago and they are winding down true freedom of the markets. It's not a dem vs repub thing either.

Now that's enough on this here. Bring it up in the political forum if you guys want to discuss these intricacies further.

 

all we are talking about is a color- from there view- the color means a lot to me for heritage reasons- but from a farming view- what difference does it make if it is yellow or red if it is the same machine?

 

how many orange agco tractors do you own? did you but one to drive orange demand?

 

 

corporations were started to allow an entity to function without personal recourse to investors if the entity failed- the exact same reason we have them today.

Who's comparing orange tractor sales to combines? I'm comparing orange AGCO tractor sales in the US to red Massey and yellow Challenger sales in the US.

When you take a hit based on the color of a tractor that is a good reason to want to promote the color you have to be continued. Of course it makes no difference to those who don't own orange.

I own orange tractors. They take a hit too just like the AGCO orange do. My L2 takes a hit if Gleaner goes away. I'll guarantee it. Now I have a cousin who I have worked for from time to time that has owned AGCO orange tractors. He has two right now. He has a red Case combine but so when he was talking about trading for a Gleaner this year he has to now take into account of what value a Gleaner will have down the road if Gleaner is eliminated. I doubt now he will get into a Gleaner based solely on that. His orange AGCOs will take a hit I assure you. Right now it isn't noticed cause the farmers had a record year around here but that time is coming when his iron will be worth less because there is no more orange. History with Allis and Deutz proves that.

Wrong, dig deeper.

 

But we all own orange stuff on here. I was asking about something that says Ago on the side- esp on that just says agco and that is orange.

 

Now sure about the hit on value- i dont trade stuff- it generally comes here for good.

 

 

No sure what you mean by dig deeper. that is the primary legal reason for "modern" corporations (not churches, cities etc). i have done about as much digging as i want to- sitting in all those business law classes, corp tax, entities, directors, ethics etc was enough for me!

and I answered that's all

You really should look into the original charter of corporations in this country and also what limits our founding fathers promoted on corporations. Not to prove you wrong but to let you know where I'm coming from.

 

Lonn,

 

Sounds like you are referring to companies chartered by the Crown? Were not "legal persons" and could be revoked at the pleasure of the King...

Nope, not exactly. This really belongs in the political forum but the founders were against corporations of the English type and wanted restrictions on them. They looked at English corporations as part of the reason for the need to break away from the crown. They didn't consider American corporations should be as our government has defined them today. They were first to provide a public good as their charter. Is that the reason they exist today? The founders wanted a corporation status to be revoked if they didn't meet this charter reason or if the corporation broke the law. There is a lot to be said on the subject and should be brought up further on the political forum.

 

True enough.  They were supposed to be short term entites and disbanded once they fulfilled their charter.

 

We've always ran AC tractors. There came a time that we needed to buy a newer tractor though. AC was gone and all Agco had to offer was some repainted foreign tractor. That and the fact that nobody knows when they will drop a tractor line and the company support that goes along with it. As bad as I hate to say it, we went with JD.

The AC name is for collectors but if you own orange equipment to farm with whether it's AC or AGCO the value took a hit when they dropped orange and the Allis Gleaner Co name. Especially true if you own orange AGCO tractors. So forget the collector's perspective. Look at the hit you take on trade in value. We do trade in once in a while. Now If at some point I decide, like my cousin, to get out of my Gleaner into a company that is stable I'll take a hit just because of this. Forget me though, I'm not in it for the money and I'll stay with old Gleaners as long as I can but my cousin took a major hit on the value of his AGCO tractors. Do you think he should trust AGCO and trade in his CaseIH combine for a Gleaner that he may not be able to trade back out of because AGCO might paint them red and throw a Massey decal on them? I'd think hard if I were him. He was hot after an R65 at one point until AGCO dropped orange. My bet is that he stays with CaseIH. That's the smart move. He bleeds orange as much as anyone but he is also smart about the future. I hope he goes with an R65 but I wouldn't blame him if he didn't AND THE REASON WILL BE BECAUSE AGCO DROPPED ORANGE. So anyone who claims it makes no difference........well apparently it does with some people. That's a fact you can't argue with. That fact proves AGCO is wrong.

Amen on that.  Often I hear that free trade benefits the consumer by making things affordable; thats the good thing about free trade. Is true in a lot of cases, but not always.  I seen items at the hardware store side by side, one made in Chine, one in USA.  USA one about the same price...Im thinking, the USA made company can make a profit at that price, but somehow the competitor had to have it made in China?  Smacks more of greed to me than trying to be "competitive".  US Corporations have abused and taken advantage of desperate employees in the past, giving rise to unions.  Nowadays many say companies dont do that, no such need for Unions. It is true a lot of the things unions fought for are now law, and there may not be such a great need anymore in the States, but thats not because Corps have gained a consciense.  They will and do still continue to do those bad things many times thru a proxy, but now its done out of sight via "outsourcing"....