Corriher Implement closed up?

[hazmat]

You disagree, yet New Holland and even TrueBlue agree. I don't think I will read that book you read.

Robert - As a newer father, you owe it to your daughter to read that book (regardless of the current discussion).

 

[Robert_in_NY]

Well, since you and Mike think I should I will.

 

[VAChesterfield]

It's not a bad book but it's got no relevance to this thread.

Tractors are not commodities where the only issue is price. Tractors have a local component of service and not simply warranty work. A truck can deliver the tractor and the UPS truck can deliver parts but neither can deliver service.

Mike, I believe the book is extremely relevant to this thread since we are discussing why Corriher went out of business. Some believe this occurred because Corriher “didn’t play by the rules” and other people have other opinions. Me, I believe it was because NH and a great many of its dealers, saw Corriher as a threat to their business interests, and engineered its exit from the market.

I agree with your assessments that tractors are not a commodity (but many of the lower end tractors are headed in that direction much like lower end personal computers), and I especially agree that local service is important. So important in fact, that local service ought to be a key differentiator that brings customers into the dealership. Unfortunately, in too many cases, tractor dealerships (most colors judging by the posts throughout TBN), treat service as a chore that must be offered and endured rather that as a primary component of their business model.

The “World is Flat” is not simply about selling commodity items based on price. It explains the dynamics which are driving fundamental changes in how businesses, any business, achieve their primary goal – making money.

NH was faced with a choice in dealing with the complaints from its dealer network about TarHeel and Corriher. They could embrace this new business model and find innovative ways for all of their dealers to gain marketshare in this new environment, or they could try to herd TarHeel and Corriher back into the fold to do business the same old way – just like everyone else.

As Trueblue points out, NH chose the latter alternative, Corriher refused to comply and they paid a high price for their noncompliance. But, as Harold_J points out, NH and its dealers do not live in a vacuum – there are other color tractors for buyers to choose from, and at some point, another color may leverage our flat world and push NH to the brink of extinction.

As for myself, before I purchased my NH, I was determined to buy a Chinese tractor. However, the price difference between those tractors and the TC 30 available from TarHeel convinced me to drive a few miles, pay a few more dollars, and get a better tractor.

So take another look at the “World is Flat”, and think about the ten flatteners and the triple convergence in light of the business model Corriher (and others) were trail blazing. Then ask yourself, should NH and its dealers stand still and continue to do business as they have for generations, or should they adapt to this new (and flat) world.

 

[Diesel-ME]

Perhaps Thomas Friedman can do what I cannot. I suggest you read his latest book (please try to find the updated version), The World Is Flat: A Brief History of the Twenty-first Century.

Information about the book is available on Wikipedia at The World Is Flat - Wikipedia, the free encyclopedia

Corriher was trying to live in a flat world, while the mass of other dealers insist the world is still round. One day, much like our American auto manufacturers, NH and the old die hard dealers will discover, to their horror, that the world is indeed flat.

I have to agree with VAChesterfield's assessment of Corriher's sales practices. While I have read Freidman's book and both enjoy the benefits of the 21st century global economy AND suffer its consequences, I don't necessarily agree that ANY dealer has the right to violate the rules sent down from above. Of course sometimes it takes a little civil disobedience to get the rules changed

Personally I was willing to spend the extra few $$'s (and in New England believe me it's extra) to do business with my local family run NH dealer. They are great people and I know that they will use me right. To me (not a farmer nor do I derive revenue from my, um, toys) a tractor is a specialty item not a commodity item. But I can see where to others, machinery would be commodity.

When it comes to cars and truck - I NEVER use local dealers unless they give me the BEST price - no exceptions. I've bought my last three new vehicles out of state. Low price wins and no BS is accepted..... The local car stealerships have OK service departments and the service managers have their own P&L. They are only too glad to perform both warrantee work and regular repairs. They do not treat me any different than they would if their boss's name was on a sticker on the back of the vehicle. BUT, cars/trucks (to me) are a commodity item.

Same thing with chainsaws. I buy a certain brand (not mentioned as I don't want to cause any debate) because they allow dealers to price as they wish. BUT to me a saw is a commodity item.

So you see, for each individual you might look at any given product or service as a commodity item or as a specialty item. There's no one "right" viewpoint.

But, alas, da CNH rules are da CNH rules.

~paul

 

[jimg]

Well, since you and Mike think I should I will.

Why? If the wiki page is a good representation of the book save yourself the time and $$. Its laughable! Wishing the world was 'flat' isnt the same thing as it being that way. The commies and socialist have been at this task for decades.

 

[trueblue]

Trueblue, I know what you are saying about how some people don't like certain local dealers. But if you don't like your local NH dealer because of problems with warranty work then how is buying a tractor from another dealer out of state going to solve your warranty work problem?

Much like my response to jimg, I did not intend to suggest that buying out of state will solve the warranty problem. I was only trying to make people understand the circumstances under which many out of state customers approached us. I may have been unclear...

Having said that, it was mentioned that in this business you have to "play by the rules" or suffer the consequences. Our rules are the New Holland Dealer's Agreement. There are no territories in that agreement. There is no rule that says you can't sell a tractor to another part of the country. There IS a rule that says any New Holland dealer HAS to perform warranty work on any New Holland under warranty. So if you are following the rules of the dealer's agreement to the letter, Tarheel and Corriher never broke the rules while all these other dealers that were refusing to provide warranty work to people who bought from us or Corriher simply out of spite were, in fact, breaking the rules of the dealer's agreement.

That was then. More recently New Holland issued a statement (mostly aimed at Tarheel and Corriher) saying anyone who advertised less than retail price on the internet (especially eBay) or in print in another market would lose incentives. We did the math and Corriher (I guess) did too. Our math told us it would be wiser financially to comply with this new advertising policy and keep our incentives. Corriher obviously figured they could make more money losing the incentives and continuing business as usual. I can't say that was what led to the close for them-I really don't know for certain.

We like out of state customers because as long as we do our part it is almost always a smooth, pleasant transaction for both sides. We like our local customers because we can develop relationships with them-like Robert has done-and quite honestly we can get their parts and service business. If someone didn't buy their equipment from us we would NEVER turn them away or charge them more for warranty work. We would try to leave the best impression possible so we could have their business in the future. That may be obvious to most of you, but surprisingly it has not been obvious to many dealers.

I'm not here to spam you guys or sell you anything on our philosophy, blah, blah, blah...I just want to provide a different perspective on a situation I'm close to.

 

[MikePA]

Mike, I believe the book is extremely relevant to this thread since we are discussing why Corriher went out of business.

IMO, anyone who breaks the established rules in any human endeavor gains an advantage over those who do not and this applies in all aspects of human interaction, not just in business. IOW, it's not new versus old model or round versus flat model and it's got nothing to do with other dealers whining, as some in the thread have accused.

Not knowing the details of the rules makes it difficult to evaluate but based on comments from trueblue, NH has a territory based contract with it's dealers. Corriher and Tarheel broke those rules by selling on eBay, posting prices on the Internet, etc., and attracting customers from other NH territories. Yes, some of those sales went to customers in areas without a NH dealer, but some did not. By breaking the rules, they gained an advantage over dealers of other makes but also over other NH dealers.

A contemporary sports analogy is Barry Bonds, assuming the accusation of steroid use are true.

The established rules (model) of baseball prohibit steroid use. Bonds used steroids and gained an unfair advantage, both for him (homerun record) and the Giants (more wins). However, he did it at the expense of the other teams as well as baseball in general. Most Giant fans love Bonds, fans of other teams do not nor do fans of baseball, hence the push to put an * behind his name when he breaks Aaron's record.

Bonds and the Giants gained an advantage because they broke the rules not because they adopted a new model.

Baseball can react in one of 2 ways, change their rules (model) to allow performance enhancing drugs or enforce the rules of their existing model. The deciding factor should be what's best for baseball, not what's best for Bonds, the Giants or fans of the Giants.

Replace

• Bonds with Corriher
• Giant fans with Corriher customers
• Other teams with other NH dealers
• Baseball with NH

and it describes the topic of this thread.

Is a business model not based on dealer territories better or worse for NH? Who knows. It'd sure cost a lot of money to replace it but assuming it's better based on Corriher breaking the rules is a bad idea. Corriher didn't sell more tractors because of a better model, they sold more tractors because they created a different model by breaking the rules. If all NH dealers could magically switch to the Corriher model overnight, Corriher wouldn't have an advantage. The key is, from NH perspective, would NH sell more tractors? Obviously they decided they wouldn't.

 

[jimg]

It wasnt unclear to me. What I dont understand is the logic of buying from you b/c they had service problems w/ the local dealer. I dont think you can answer this question. I was just thinking out loud.

I suppose some folks dont have a good idea what it takes to run a business and/or deal w/ people. They arent cut out for it. NH should let them go out of business so they can find their niche in life. It would benefit everyone. OTOH an otherwise very good dealer may not have the latitude to compete pricewise w/ you. Its a tough call, theyll loose the tractor sale but still have parts/service and perhaps implement sales. Is that really enough for them to stay in business? I think probably b/c not every one is computer literate or willing to buy online. Theres a fairly large segment who prefer to deal face to face rather than over the wire. I guess I tend that way, if I have a good local dealer then Id like him to have my business. I might pay a bit more but in the long run it helps us both. I know he'll be around when I need the help/advice/etc.

 

[MessickFarmEqu]

The real issue here is service related. As a whole, dealers loose money on warrenty work. We have factory trained tech's who have been in the business 30 years who still miss the flat rate schedules for warrenty jobs. The way these dealers did business pushed the expense of providing service to other dealers and creates alot of bad blood with the customer stilling in middle. Many of the tractors they sold literaly went out with $300-400 profit margins. They could do this because they did not have the expense of providing service after the sale.

This is VERY different from the car and truck business where warrenty work is their bread and butter of their shops.

 

[Harold_J]

The real issue here is service related. As a whole, dealers loose money on warrenty work. We have factory trained tech's who have been in the business 30 years who still miss the flat rate schedules for warrenty jobs. The way these dealers did business pushed the expense of providing service to other dealers and creates alot of bad blood with the customer stilling in middle. Many of the tractors they sold literaly went out with $300-400 profit margins. They could do this because they did not have the expense of providing service after the sale.

This is VERY different from the car and truck business where warrenty work is their bread and butter of their shops.

Why do you think warranty work is a money loser in ag equipment yet "bread and butter" for autos and trucks? To me it seems there's some shortcomings with the ag industries flat rate scheds or reimbursement policies. If 30yr experienced techs are consistenly missing the book either they're incompetent or the schedules are unrealistic; these things should average out in the end.