Sandy Lake Imp losing AGCO

Dale-OH wrote:   In the corporate world it is all about numbers,

Executives in corporations are constantly scrambling to the to the top; they often don't care of what company or division because they jump from one division/company whenever they see an opportunity for advancement.  The point is, the decisions they make are often personally motivated for the good of their careers and not necessarily for the good of the company. 

The key to (career) promotion is "vision".  Executives have to have a vision which separates them from the other leaders/managers who are available to the upper management of the company.  Cancelling SLI's part distributorship may have been part of an executive's vision to reduce distribution costs/inventory space/personnel.  Whether the concept works is entirely secondary.  Once the exec can show a quarter or two of bottom line benefits, he can move up or transfer to another division or company.  The job of making the project work long term will be left to someone else.

As far as real costs on the corporate side,  personnel are expensive.  By centralizing their distributorships, AGCO reduces the amount of personnel required to maintain contact with dealers like SLI.  Instead, AGCO retains fewer highly-paid and trained salesmen/reps and can substitute lower-paid and trained employees to send out orders.  Also, the personnel who know the older parts are likely to be more experienced and therefore more highly paid than someone off the street.

What I'm looking for is AGCO spinning off its antique parts business into a separate organization.  The organization won't make any products itself but will outsource the manufacture of its parts.  I saw a posting earlier which mentioned something along those lines.  That way the company can easily separate the costs/profits on its balance sheet while reducing employee costs to a minimum.  Moving the parts business to a separate company will also make selling the parts business easier.  Selling the parts business division would give a nice bump to the quarterly bottom line.  Some executive may even get a promotion out of the deal.