Corriher Implement closed up?

[MessickFarmEqu]

Diagonstic time is one problem. They don't really allow much for it at all, and some of these complicated machines can take some real work to get down to the actual issue.

Flat rate is aggressive, but it should be really. They come up with those times assuming that your standing by the machine, tools in hand and ready to go. They don't account for the fact that the guy was loading chicken manure with the machine and it really needs washed off first.

Then there is "the system". To get credit consistantly you need to know how to word things and provide the right proof of what was done to get credit. We have a full time guy who does this, but at most dealers its the parts or service manager who has to squeze this into his day and they don't have the time to go into the depth required to get full credit.

Some brands are better than others. New Holland is about average, there are some who just decide to send back half of what you file for, but there is also others who don't question much of anything and trust that your being honest. This is not unique to this brand, its the norm in our industry.

 

[jimg]

# of tractors bought from cut rate dealer - # of those that broke - # you serviced - # of services over book time = very small number

Is this incorrect??

 

[Harold_J]

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.

I'm not one to advocate breaking agreed upon rules, but in the CNH situation it seems the rules changed after the season started as a reaction to complaints from other players. I don't know what you were reading into Trueblue's posts but he explicitly said

There are no territories in that agreement...Tarheel and Corriher never broke the rules...

He goes on to say NH "issued a statement" relating to price advertising, ie. they changed the rules.

But you know the old saying "He who has the gold, makes the rules". Maybe some of the whiners were high enough profile dealers that they could make a valid threat to jump ship.

I believe if the manufacturers could have their way in the future they would want nothing more than to sell everything at a fixed price and the dealers would be turned into little more than service agencies. I think someone posted on the JD boards recently that list prices have been lowered closer to dealer cost. And NH has the "lean and mean" pricing with little bargaining room. In my opinion only, that's where it's going. GM tried it with the Saturn auto and it really didn't work out (yet anyway) but in machinery they just might pull it off and I think it's already happening.

 

[Robert_in_NY]

TrueBlue, how many other New Holland dealers do you have in your area?

I have been told by managers of two different New Holland dealers that they can not push their tractors in the other dealers area. If someome comes down and buys one they can sell but they can not purposely advertise in the other dealers area. Up here there are territories for New Holland dealers in regards to advertising.

 

[Robert_in_NY]

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.

I have come to trust a few guys on here and if they recommend something then I will listen. You can always gain by learning something new.

 

[Robert_in_NY]

# of tractors bought from cut rate dealer - # of those that broke - # you serviced - # of services over book time = very small number

Is this incorrect??

Even if it is a small number at the time the situation was going on, it was a potentially large problem if allowed to continue since a lot of the tractors were being shipped into the North East and Messicks is in the North East. The dealers and New Holland addressed the problem before it became a bigger problem.

 

[trueblue]

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.

My answer to your question is the following scenario: 1) Customer takes tractor to local dealer. 2) Customer gets bent over by local dealer over some aspect of their relationship-warranty work, for example. 3) Customer is irate with local dealer and vows to never do business with that dealer again. 4) Customer still really likes the NH brand, but there is no other local dealer. 5) It's time to buy another tractor, NH is the preference, but where can he go? 6) Customer remembers seeing ad for Tarheel Tractor in the Heavy Equipment Trader, so why not give them a call? It doesn't have to be a service issue necessarily that makes people stop the business relationship-it could be that they were lied to about getting a full tank of gas with purchase. Who knows? My service example was just a common reason we had people calling us. No more. No less.

Any experienced dealer will tell you the goal is to have parts and service absorb the expenses associated with running the dealership. Afterall, your margins are WAY higher in those profit centers. Sales is supposed to be the "gravy" money and what drives traffic to your parts and service. It's hard to get to that point as a dealer and it doesn't always work out that way, but that approach has proven effective over time.

Our stores are in what is jokingly referred to as "Tractor H*LL." The entire area is cut-throat, although it's getting better. BUT the days of making $3,000 off a $10,000 compact tractor are long gone-at least around here. If dealers up north or out west can still do that (and I know some of them try), then that's up to them. If the customer wants to (in some cases) pay more to be on really great terms with their local dealer than that's what I would rather them do. An unhappy customer, either in NC or NY, is the last thing any dealer wants.

One thing I have a hard time apologizing for is being more aggressive than the next guy who could have done the same thing and WITHOUT breaking any terms of the dealer's agreement. We fell back in line with the status quo when it was the most financially responsible to the company to do so, but I think it all comes down to capitalism in the end.

 

[Harold_J]

...Our stores are in what is jokingly referred to as "Tractor H*LL." The entire area is cut-throat, although it's getting better.

trueblue: In your area did some of the Tractor H*LL come about because of CNH/Fiat mergers? I know in some places you had the old Case dealers starting to sell IH after the merger and they were right up the road from the existing IH guy.
Or was business always very competitive near your store?

 

[MessickFarmEqu]

I have been told by managers of two different New Holland dealers that they can not push their tractors in the other dealers area. If someome comes down and buys one they can sell but they can not purposely advertise in the other dealers area. Up here there are territories for New Holland dealers in regards to advertising.

There are particular products where this is the case. New Holland AG is starting to clamp down on skid loaders going out of territory. Largly though, our territories are not enforced. Its important to have good working relationships with other dealers. We have to transfer in alot of equipment from other dealers. If we **** them off, we then have to go to New Holland (or whoever) for that machine and spend more $$ and time in the process. I will not undercut certian dealers because my relationship with them is important.

 

[trueblue]

trueblue: In your area did some of the Tractor H*LL come about because of CNH/Fiat mergers? I know in some places you had the old Case dealers starting to sell IH after the merger and they were right up the road from the existing IH guy.
Or was business always very competitive near your store?

For the most part the merger didn't have much affect in our area. I don't want to make it sound like a soap opera, but there was some bad blood between dealers that created an environment where regardless of brand we had to go way low on price. Since we walked into the situation by buying out the dealer that was already here, the stage was set and most of our pricing became reactive. Sometimes other dealers would forgo better financial judgement and take a losing deal just to say "I won." There's more to it, but I'll leave it at that.

Another bit on the merger: The top people from Fiat have been upset with New Holland's decline in overall marketshare. They basically fired the people on top and took over themselves. They've been giving the dealers more incentives to pass on to the customer in an attempt to regain marketshare. For this area solid marketshare is 17% or more. Our average has been around 26% but lately it's just under 40%. I don't know how Messick feels, but for us it seems to be working. July is usually very dead with all the vacations, etc., but we actually had an extremely good month.

Messick is right though-the skid steers and track machines are controlled by New Holland Construction and we are New Holland Ag. dealers. The construction side got VERY sensitive about out of state sales and from what I'm told they do pay attention to where the machines go. The thing is, it's still not a violation of the dealer's agreement and since the Ag. side sells 70% of all NH's skid steers and track loaders, I don't think too much has been said.