FarmTrac Troubles

[HayDR]

What dealers have been contacted.
I have not yet.

I got emails from 2 dealers that contacted Textron to tell Textron to come pick up the tractors and they had the same story. This my just be Textron giving a strong front trying to overt a mass dealer revolt. I did call some other dealers and they have not tried to contact Textron nor has Textron tried to contact them. I'm not an attorney so you need to get advice of your attorney. Realize the laws do vary from state to state so even that may cause a different response from Textron.

 

[Cop in Overalls]

Tim C. just contacted me and reported that Textron and LS are currently unable to come to an agreement. They are still working on it and hopefully we will have some news next week. I am very anxious, and I would imagine many other Farmtrac owners and dealers are also. It appears that Tim C. has the inside scoop on this topic and I am glad that he is gracious enough to pass it along. As I recieve more info, I will pass it along.

 

[KrumpsBrother]

Is there any truth to the rumor that the Escorts Indian management of Farmtrac is/was difficult for the dealers to work with?? Has Escorts really left the building?

KB

 

[agequipt]

Farmtac has never been hard to deal with from an aggresive standpoint.
The problem has been with the floorplan company Textron.
I have been a dealer 14 years ( I started when it was LONG). Farmtrac has had its issues but from a dealer prospective I have been with worse.

I will add this problem started with a particular manger that is not here any more.

I don't think Escorts has left but I am sure it is going to change how they are here.

 

[bluechip]

I don't have the detailed info Tim has, but according to one of my contacts, a conference call that we had hoped would bring some good news, was really just more uncertainty. In short, the laid off employees were told that they did not see any real hope for rehire at this time. TimC also sent me a "dealer to dealer" PM indicating similar news and adding that more discussions were to take place next week. I don't know what is being discussed or who is discussing it but the talks apparenty did not get settled by a Feb 1 target.

I did get a certified letter today from Textron "reminding me" of my obligations under our floorplan contract. I do not know whether this is a result of Farmtracs current uncertainty or a response to the dealership termination letter that I sent a couple weeks ago. I'd be interested in knowing if any other dealers got the same letter.

It appears this is going to get very complicated and expensive and I now think I am going to have to hire an attorney just to make sure I don't absorb any more liability than is legally mine.

It is true that each state has its own farm equipment dealer franchise and floorplanning buy back laws. It might be a good idea for Famrtrac dealers in each state, who still have inventory or balances with Farmtrac (or Textron), to jointly retain legal counsel. No point in duplicating effort and burdening ourselves (dealers) with added legal expneses in addition to the potential losses we are possibly facing on our existing Farmtrac inventories.

These are still good tractors and there are parts sources out there. the big issue in my opinion is backing of the warrantys. Most of these tractors seem to need little or no warranty work anyway so hopefully the end users will not be drastically damaged by these events.

Dealers will be damaged in many ways, not the least of which is credibility with our customers.

Funny thing is, today I was talking to a dealer that Farmtrac fired several months ago for lack of sales and service facilities... they came and got his tractors and cleared his floorplan account... he is off the hook totally, all because he wasn't a "good dealer" in Farmtracs book... We have sold increasing numbers of tractors, been faithful through the tough times and now we are going to get squeezed hard over this... Oh well. sorry to be whining here... I don't have a bartender to talk to.... dry county... Then there is the election... daughter brought home a stray dog tonight.. somethings got to go well soon! Ah but In the end, none of this will matter.

 

[JoeinTX]

I really do hate to sound like someone who's picking through the pieces but I have been following this thread with attention.

I'm not actually in the market for a new tractor, BUT, is any dealer out there contemplating a "fire sale" (if you will) should this drag-out or continue to be uncertain? I really like the Farmtrac offerings, I recommend them to others looking for a tractor, and if the issue is in doubt I might go ahead get one.

Like I said, I hate to hear about this and I wasn't looking at buying for another couple of years.......but.

 

[Robert_in_NY]

I really do hate to sound like someone who's picking through the pieces but I have been following this thread with attention.

I'm not actually in the market for a new tractor, BUT, is any dealer out there contemplating a "fire sale" (if you will) should this drag-out or continue to be uncertain? I really like the Farmtrac offerings, I recommend them to others looking for a tractor, and if the issue is in doubt I might go ahead get one.

Like I said, I hate to hear about this and I wasn't looking at buying for another couple of years.......but.

Joe, you bring up a good point. If things fall this way a lot of people may get new tractors at great prices. I only hope that all of the dealers explain to the people the situation and where they can get parts for that particular tractor.

I am going to look now and see what models they have to offer just in case a deal comes along. If it breaks down and I need to wait a few days for a part it won't matter as I would be using it as a raking/tedding tractor and other simple chores around the farm.

 

[HayDR]

Joe, you bring up a good point. If things fall this way a lot of people may get new tractors at great prices. I only hope that all of the dealers explain to the people the situation and where they can get parts for that particular tractor.

I am going to look now and see what models they have to offer just in case a deal comes along. If it breaks down and I need to wait a few days for a part it won't matter as I would be using it as a raking/tedding tractor and other simple chores around the farm.

I totally agree that the Farmtrac product is a great value at full price while the Farmtrac dealer network was up and running.
The situation now is some states may prohibit the sale of these tractors as new if there is no viable entity coordinating warranty. The warranty laws of states vary and there are minimum thresholds of warranty required if you are selling a product as a new product. There are also lemon laws in most states. A dealer may have to sell these tractors to be sold as "AS IS" no warranty available. If the dealer does not sell as "AS IS" they may be held to legally providing a warranty up to the minimum threshold required by the laws of their state. This situation will reduce the value of the tractor. That devaluation may even be below the floor plan amount financed by Textron. If a dealer was to sell below the financed amount then that dealer would have to make up the difference out of his pocket. Many tractors are often priced $1,000 over dead cost. Remember these tractors will have no rebates or volume bonuses to the dealer if Farmtrac is dissolved. In my opinion, customers in the market do not realize how small the profit margins are on these tractors. The Textron floor-plan will work to prevent most of these tractors from a fire sale situation. If there is no resolution between Escort and Textron then many of these tractors on dealer's lots and under Textron's floor-plan could be as a frozen asset. Textron will demand interest and curtailment payments from the dealers and yet the dealer can not sell the tractor and make any money. Likely the dealer termination and buy back laws of each state and situation will be tested in court.
Unless Farmtrac comes back with adequate financing and/or someone purchases Farmtrac's paper owned by Textron, it will be hard to conceive few if any dealers wanting to do business under the Old Farmtrac dealer contract.

 

[montanaman]

I totally agree that the Farmtrac product is a great value at full price while the Farmtrac dealer network was up and running.
The situation now is some states may prohibit the sale of these tractors as new if there is no viable entity coordinating warranty. The warranty laws of states vary and there are minimum thresholds of warranty required if you are selling a product as a new product. There are also lemon laws in most states. A dealer may have to sell these tractors to be sold as "AS IS" no warranty available. If the dealer does not sell as "AS IS" they may be held to legally providing a warranty up to the minimum threshold required by the laws of their state. This situation will reduce the value of the tractor. That devaluation may even be below the floor plan amount financed by Textron. If a dealer was to sell below the financed amount then that dealer would have to make up the difference out of his pocket. Many tractors are often priced $1,000 over dead cost. Remember these tractors will no rebates or volume bonuses to the dealer if Farmtrac is dissolved. In my opinion, customers in the market do not realize how small the profit margins are on these tractors. The Textron floor-plan will work to prevent most of these tractors from a fire sale situation. If there is no resolution between Escort and Textron then many of these tractors on dealer's lots and under Textron's floor-plan could be as a frozen asset. Textron will demand interest and curtailment payments from the dealers and yet the dealer can not sell the tractor and make any money. Likely the dealer termination and buy back laws of each state and situation will be tested in court.
Unless Farmtrac comes back with adequate financing and/or someone purchases Farmtrac's paper owned by Textron, it will be hard to conceive few if any dealers wanting to do business under the Old Farmtrac dealer contract.

There is a lot of truth in this especially when it comes to the small profit made per tractor. People WILL be looking for 1/2 off sales. Some folks with cash in hand may get some GOOD buys if it is worth it to them to buy, but I doubt there will be any low rate financing available for those needing a loan.

A lot of folks just do not understand how this business works and for some reason, think that selling tractors make you rich. The costs of running a business are huge these days!

Ken

 

[JoeinTX]

I do understand that dealers aren't makinga killing off of the tractor business especially in cases like this.

I was really more curious about pure cash-and-carry deals.........I pay cash and understand there may be no warranty covering the tractor and know full well I may be on my own. The 435/535 aren't too darned far off of my price as they sit right now.....just wondering if the average Joe like me might see them "as is" for a couple thousand less than we see today in the not so distant future.

 

[Thack]

Sounds like Farmtrac is a thing of the past, wishfull thinking can't change anything. Bobcat is now in the game, Deutz-Fahr has tractors sitting on Framtrac dealer lots...

 

[racerxxx1968]

ive been following this for a few days and its really kinda sad that with the economy seemingly down there are lots companys hurting..i have a friend who sells farmtrac and i was considering buying a 555dtc w/fel i know they are good tractors heck the utility types are ford and we all know they was good and they have a great financeing at less than zero..i know my dealer thinks they have been good to work with hopefully they can be salvaged a good unit at a decent price, guess im gonna have to shop for either the big green or big blue since thats the only other choices were i live (sigh)

 

[pete-mi]

I think the less than zero financing was the thing that hurt them the most. Its hard for a company to make money selling a tractor for 0% and giving money back each year to.

 

[Viezur]

The Lower than Zero" program was a way to increase cash flow, Instead of writing the finance company a check for the total interest cost of the loan at signing, (several thousand dollars) the company opts to reimburse/amortize the interest over the life of the loan (2-5 years) by making installment payments to the retail customers. This, of course, frees up a lot of cash at the beginning because instead of spending 3-5 million dollars on low rate financing buy downs, you only have to pay a few hundred thousand dollars out to customers for the first year or two. But what happens when the cash is used for operations/other purposes and payments stop going to customers?

 

[Bryan_E]

you can still get parts through the manufacturing from there company store there in tarboro. 252-823-1163

 

[tommybr]

Don't count Farmtrac out just yet...there are alot of negotiations going on behind the scenes that the public is not aware of......something is hopefully going to happen by the end of this week. This according to a source from inside the facilities at Tarboro.

 

[HayDR]

All of a sudden we have new members joining TBN and their first posts are inside information on Farmtrac. It very well might prove out to be accurate and true information but it also could be a spin to try and keep consumer confidence up. I'd say by now Textron will have their hands full with the dealers. You don't slam the door in a dealers face and magically knock on his door in 2 weeks and say let's play ball.

Everyone can see what the dealers feel like because it's been posted already. I can not for the life of me understand why Farmtrac does not include the dealers in their solution. If you make the dealers upset then how are they going to sell those 5000 tractors. Solid dealers insure customer confidence in a tractor.

I sure hope this situation could be worked out quickly but it does not seem anyone is motivated yet.

 

[Charolais]

All of a sudden we have new members joining TBN and their first posts are inside information on Farmtrac. It very well might prove out to be accurate and true information but it also could be a spin to try and keep consumer confidence up. I'd say by now Textron will have their hands full with the dealers. You don't slam the door in a dealers face and magically knock on his door in 2 weeks and say let's play ball.

Everyone can see what the dealers feel like because it's been posted already. I can not for the life of me understand why Farmtrac does not include the dealers intheir solution. If you make the dealers upset then how are they going to sell those 5000 tractors. Solid dealers insure customer confidence in a tractor.

I sure hope this situation could be worked out quickly but it does not seem anyone is motivated yet.

I'll have to agree with tommybr. That doesn't mean that Farmtrac will ever go back in to operation but it does mean it's not over until it's over. I've been on the phone a lot the last two weeks. I can't and won't post what I've learned but to understand what went wrong, it helps to know the root cause. Farmtrac was doing great until it's first CEO left to join another company in Sept. of 06. After he left things took a down turn and perhaps was caused by bad leadership.

Farmtrac hit the ground running with a great product at a decent price and impeccable service,and I'm speaking for myself with this comment. If I had questions I got answers. If I had issues those issues were corrected. I even talked to engineers at the plant to work out a hydraulic problem on one model and they made a production change to correct that problem. Plus they cured the problem I had too. When I needed a straight drawbar because the curved one that came with the tractor wouldn't work on my hay conditioner they sent me a straight drawbar and we traded. They had all that and can return to that again if someone sees it's worth keeping it alive and see that the right management is in place to get the ball rolling in the right direction. That may or may not happen. If it doesn't then a good tractor company is going down the tubes. I would hope they can get back on track and return to operations. The final decision should be made soon now. I just hope all those plant workers can get back to work. If they make a come back it may come back bigger than before. I haven't written them off yet. When I see the final word I'll believe it then.

I know I have my dealers support which ever way it goes and I'll keep on putting hours on my Farmtrac either way.

 

[tommybr]

None of us, least of all myself , can claim to have a crystal ball and be able to predict the future about Farmtrac or anything else. I just think that if Textron wants to get any of their money back, they better be figuring out a way to keep Farmtrac going. This is just my opinion....based on some things being discussed.

 

[HayDR]

None of us, least of all myself , can claim to have a crystal ball and be able to predict the future about Farmtrac or anything else. I just think that if Textron wants to get any of their money back, they better be figuring out a way to keep Farmtrac going. This is just my opinion....based on some things being discussed.

I totally agree that it is in Textron's best interest if they can get Farmtrac back up and running. But Textron has treated the dealers like the dealers were the problem not the management of Farmtrac.
When Farmtrac could not pay Sicma for orders and Sicma took all their orders back and resold them via Unifarm & Goforth that was the first signs Farmtrac was in trouble. Framtrac had rather grandiose ideas in 2003 & 04 that they would manufacture rotary cutters and dirt working implements. It was and is the worst possible time to be starting in that business. Absolutely no profit margins are in that sector now, only King Kutter made any money last year.