And Case-IH was such a strong comany that it was gobbled up by Fiat-Agri.
A little history that has some similar things going on right now.
IH was No.1 for alot of years and found itself in a negitive cash flow situation (similar to GM now) in the early 80's and chose a partner who had cash, Tenneco (owner of JI Case) to sell its ag lines to.
Allis-Chalmers was diversified in all the wrong industries for the times and did go bankrupt. It's ag lines sold to Deutz. It had earlier sold its constuction lines to Fiat and it's electical business to Siemens.
The whole US Ag economy was on steep slide. There was some trading and mergers among MF and White to long to go into. They all had the same issue,
They were all looking for cash. Sound familiar to the Big Three now.
How Deere survived the downturn was they had cash like Ford is claiming now. The hope is you have enough cash to get through it.
Deere sold more tractors in 1980 than the entire industry (including Deere) in 1981. Commodities came off record highs in the late 70's and hit a wall when the US placed an embargo against the Soviet Union (a major customer for US corn) for invading Afganistan in 1980. Commodities crashed which created a rapid deflation in farm ground prices which were inflated by high commodities, which left farmers with not enough assets to off set their debts. A serious liquidity problem. Sound familiar.
The look and smell of a new tractor wasn't quite as appealing anymore to the farmer trying to keep the bank from foreclosing on his family farm of a century. Farm auctions were a regular event across the Midwest.
That changed the look of what the Ag Tractor industy looks like today like no other.
It will be interesting what this downturn changes.
One lesson I have learned, profit and assets are important in busineess, but Cash is King.
