Why The Demise of IH Ag Division?
 

After reading Oscar Will’s book “The 50 Years of Cub Cadet”, I am mystified why more information wasn’t provided regarding the BIGGEST, EARTH SHAKING change to the most dominant player in the entire agricultural equipment sector of the American market – which I’d like to understand. I am aware that the economy was awful in the late 70’s, with high loan rates, farm prices were down with increasing consolidation taking place resulting in equipment sales plummeting. But they were also plummeting for Deere, Massey Ferguson, Allis Chambers, Gleaner, White, Case, Sperry New Holland, etc. I know IH had a recall problem with the 460, 560, and 660 tractors – and lost some market share – but they were still the MASSIVE, dominant, diversified, conglomerate powerhouse as ever - always three step ahead of everyone else. So why, even if IH had revenue issues, why would they sell the foundation, The Soul, of the entire corporation (Ag Division) when they could have sold off other lines of business such as their Consumer Division, Construction Equipment Division and/or their Truck/Diesel Engine Division? Why?

My grandfather who farmed 1+ sections in Leoti, Kansas (pop. -2000) from the 50’s-70’s (wheat/corn/milo) only used IH Farmall equipment. As a 12 year old kid in the early 70’s, I can still remember the joy, looking at his Ag magazines, gazing with delight at IH ads featuring a BIG RED 666 Turbo with HUGE wheels and a white enclosed cab– with the tagline on the bottom:

International Harvester. We help you feed the world.

ccguy

1994-1440
1976-#4

Could not compete with john Deere. Cih or CNH still can't.

I heard the big shots were bleeding the company dry for all it was worth, but don't recall the source.....sorry. That happened to several industries in my area and it seems like the innocent blue collar workers are always left out in the cold. Maybe we need a Robin Hood clause in the CEO's contract for a re-distribution of the wealth when they embezzle, mismanage, etc. from a company.:bigthink:

Cub Cadet 123

Well..... The demise of IH is complicated. It had more to do with greedy management and an attitude of "we can do no wrong" than it did with economy.

Here are some key factors:
*High interest rates which made buying a new machine unpractical.
*Low grain prices as the US had imposed a grain embargo on the USSR.
*A major strike in '79 that hit IH in the "shorts"
*Major, major expense in designing, tooling, training, building the new '88 series tractors
*A main production facility (Farmall Works Plant) that was in need of upgrading and incredibly inefficient.
*Management.

I will not take credit for this knowledge as I have studied, and studied International Harvester. Some of the info given is from Ken Updike's book International Harvester Tractors 1955-1985. If you are really interested in the demise of IH there is one, and only one book chronicling the events that led to one of the greatest farm machinery makes ever to go virtually bankrupt. The book was written by Barbara Marsh and is called A Corporate Tragedy. I do not yet own the book as it is out of print, and very hard to find..... for a reasonable price. Most copy's I have seen were selling in the $200 range. I will find one.....

Incorrect. But it's cute that you think that. :biggrin2:

Oh, I think you meant a 4166. The 666 wasn't turbo charged. :BlahBlah:
(Sorry, not trying to be "picky")

Attachment 59374

HAHA, I was thinking the SAME thing!

Why The Demise of IH Ag Division?
 

J-Mech:

Quote:
Oh, I think you meant a 4166. The 666 wasn't turbo charged.
(Sorry, not trying to be "picky")

THAT'S IT!!! That's the monster tractor! Still brings back great memories... (and goose bumps) I would have given anything to drive one of those as a kid....

ccguy

Figured youd enjoy that...lol In a way...its true tho...at least around here. I've heard many reasons why they went under. Never read the books but terrible management and a bad economy was the main reason they fell that I know of.

The reasons Jon listed as to the demise of IH is right far as I know. IH tried to do to many diffrent things. Had they split off the divisions to keep each insulated from each other things may have been different. A lot of their manufacturing facilities were outdated, heck the owned mines that they got the ore from to make steel! Also their foundries were outdated as well. It was a perfect storm for failure that came together at the wrong time. I still feel that if they could have gotten the magnum out in the 70's like they wanted they would still be around today.

Well..... the 80's. They had it in mind but went with the 88's because of cost. Same machine, for the most part. Just without the powershift.

I agree with you about it being a perfect storm. That's a good explanation. :beerchug:

I had the exact same thought. The magnum cab with the 88 series front end experimental tractor. The magnum series would have helped IH for sure.

They designed it......
Like I said, it's the same power structure as the 88, just in a full powershift. The early Magnums even used the IH rear housing. If you take the hoods, cab and wheels off an 88 and a Magnum you can't tell the difference. (Well, you can if you know what your looking at.) CIH, changed the motor from a DT 466 to a Cummins 504, made the cab set-up more like a case cab, and used the case style front axle. Case and IH's axle was actually pretty similar.

Two words.

POOR MANAGEMENT!

They all went under one by one, only Deere survived and we almost lost them. I remember my Deere dealer increased parts prices 15% so he personally would not go under, explaining to us farmers that it was the only way he could make it.
It was tough times back then, I agree with the perfect storm thing.
Deere actually was casting some motor blocks for General motors to survive.

IH 1981 annual report.

I don't it know if any of you guys are on redpower.com or not , but there is a guy dirtboyz who built what probably would have been the tractor that IH would have came out with if they hadn't sold to tenneco. The back half is a magnum the front is a 88 series IH. I believe he put the dt466 in it. He said there wasn't alot to do to modify it to fit together. Here is a pic. He numbered it a 5388 . He told me at the time of the merger there was a 5188 at the Nebraska test site.

I've seen that.

Like I said, the power train, or the "base machine" is the same. All as he would have had to do was split an 88 and Magnum and bolt the two together, then make the hoods fit the cab, and engine controls. Not really that difficult. I wish I had a pic of the superstructure of the tractor without the cab wheels and hoods. When I worked for IH, I went to Lima, Ohio for training. They had a one there. I don't think I took any pics of it because back then...... there was no such thing as cell phones with cameras. Hell, cell phones weren't really commonplace yet. :biggrin2:

It is pretty cool! It wasn't a (straight bolt together) he did have to do some machine work as they changed the input shaft for the cummins vs the dt466. There's a video I think on YouTube of him pulling a chisel plow with it. The guy that built this has the first 1086 built a and several other intresting ih tractors. He has a test mule from hinsdale also.

This is a good topic but there are a bunch of reasons for the failure. I got a softcover copy of A Corporate Tragedy about 15 years ago and it is a great read, but I don't think I'd give $200 for it. Maybe some of you guys can try your local library.

Some things that I've read that maybe weren't mentioned here-

Construction division was sold in early 80s, (to Dresser Corp) for less than what the inventory was worth; Payhauler quarry trucks were spun off into a standalone company;

IH had a large share of ownership in Steiger Tractor, (that's where the 66/86s 4WDs were sourced) sold in real early 80s. Look for a marketing flyer for the 73/75/7788 tractors to see what the future IH/Steigers were supposed to look like. (By the way, one reason given for the sale was the lack of a PTO option)

We all know that the Cubs were sold off;

Wisconsin Steel was a money pit, I think they had a deal set up to sell it and then the buyer folded; 'I think" (I can't recall now) IH just closed it

Were unable to sell the Scout line; ended up closing it down

Lack of a full powershift in the high hp row crop tractors hurt head to head with Deere. I think most of us know at the time IH had a superior engine, and the 86/88 series cab is pretty competitive. Unfortunately IH didn't have the money to invest in the new tranny; really the full powershift STS should have been out around the time of the 86 series, at least as an option, and definitely available in the 50 series. Marsh outlined how IH would develop a line, introduce it, and then Deere would respond with an updated, improved lineup, and market it against IH's 'new' tractor.

Poor management for many years, the 60 series diff failures, overproduction in '79-80, always at odds with the labor union, wanting to go head to head with Cat in construction. Speaking of the labor issues, you guys should read some of the stuff in Marsh's book. Some of the issues were just ridiculous.

Book outlines just how critical the Powerstroke diesel for Ford Motor Co. was to IH's survival. Also company internal debates regarding the DT466- Engine division wanted to sell it to competitors, Trucks wanted it kept in house, so as customer would buy IH truck (or other heavy eq) vs competing brand with the IH engine.


Lots of good info out there. I got the new Red Tractors book last summer and it really gets into the development of the Magnum tractor. Pretty interesting stuff.....think 50 series IH with a Cummins engine, IH cab, IH (full powershift) tranny, IH rearend, Case rear wheels and dash, and new hood styling. I think the FWA axle was the same as the 50 series as well. There was a quote in there that Case had their 96 series in development, (94 series using the Cummins engine), but the Case just didn't compare with the technology that IH had, so they quickly dropped the Case and focused on refining the IH design.

Thank you all for this information. Really interesting...and very sad of what could have been. I wonder what their lines would look like today.

I've got to track down an affordable copy of that book....

ccguy

I just wanted to follow up on this because I found the video of the builder, Danny Anderson, explaining the build. He states in the vid it was a direct bolt together. Like I mentioned, he just had to modify the hoods and some other minor things. His description starts at about 4:30.

https://www.youtube.com/watch?v=f5gLCl1YT7E

Sorry guys, can't leave this alone today.

Apparently one did make it out of the Hinsdale after the merger. Dirtboyz, (the guy who built the 5388) confirms the authenticity of this photo. He says it is the only one that made it out. Can't find much info on it, but it's really cool.

Three pics about half way down the page.
http://www.redpowermagazine.com/foru...howtopic=65708

I've seen pics and read about this s tractor on redpower.com too Jon, pretty neat! For those who say or think the magnum was a case design that's a bunch of bull! We had a neighbor friend who was diehard john Deere and he bought a 7120. I used it to disk some , man that was fun to drive! You could definitely tell the cab was an IH.

I find this topic very interesting since I'm not very knowledgable about it. I watched the video Jon linked, then half a dozen more. I'm a little confused. This guy made the 5388, mating the 88 series with the power shift trans. One video about the 7288 I watched commented about how the trans in it was the same trans design as the 5488. You can smoothly shift to any gear, any quadrant any time....is that not the power shift trans? What is the difference between the 5488 and homemade 5388?

Bill

The STS tranny wasn't a full powershift but it was synchronized. You had to clutch to change ranges and to shift 2-3 and 4-5. Magnum was full powershift version of the tranny. If you've run one the 6-7 and 12-13 shifts are a bigger 'bump' for lack of better term, as that was a range shift.

Ok, that makes sense.
Thanks!

Not that SS5150 didn't do a good job, but let me take it a little more detailed....

The 88 series was a gear drive. It had two shift levers, the range lever, and the speed lever. The range lever also contained reverse. The larger tractors had three ranges: High, Medium and Low. Then in each range you had the choice between gear speeds 1-6. The trans still had the the IH Torque Amplifier, but it was changed to an electric shift and incorporated into the speed transmission. So, you could shift between speeds 1-2, 3-4, 5-6 with a simple "slap" of the shift lever from side to side.

Attachment 59704


When they (CIH) went to a full powershift trans. All they did was add some clutch packs to the STS and boom, full powershift. When SS5150 talked about the "jump" between some of the gears, that is when it shifted between low and medium and medium and high. Single lever in the cab, forward gears numbered 1-18, two ranges of reverse. You could choose rev 1-2, and go to neutral and back to another notch and choose reverse 3-4.

Attachment 59705


The transmission housings on the 88's and magnums were the same. The early Magnums actually used the left over housings. Kinda neat to see one with the IH and original casting/part numbers on it. Several of the parts are interchangeable.

Another neighbor friend had a 3688 that I disked some ground and planted wheat with in the fall of 96. Kinda neat compared to a 86 series( I used to run a 1486 a lot ) from what I remember it may have not had the tranny update cause it gave me fits shifting . Dad always said it was the best looking tractor IH made. We tried buying a 5088 in 87 but couldn't come together on the deal. We had on our farm at one time a 656d farmall, a 1486 a 76 886 360d and one dad bought new a 81 886 with a 358 German diesel, it had a cab originally intended for a 986! Must have been put together from all the extra parts IH had around. Really it had 986 on the cab serial # pretty cool! Have to see if I can find a pic of the tractor. Kinda funny story dad ordered it they first tried to pass a used a 886 off on him then the other one came in it had the wrong size tires. He ordered it with 18.4x38 and it had 18.4x34 on it, turned out the 34's were better. Smaller tire like that gives you better pull for the up the tractor had. Sorry to ramble. This is a interesting thread! For us IH guys there's no better book than red tractors 1958-2013 very much interesting book!

Brian, that's kinda odd..... the 886 with the German diesel....
The cabs were all the same of the 86 series, and they carried their own serial numbers. I'm wondering if perhaps it just happened to have 986 in that number? :bigthink: Now the D358.... that's just odd. That was the engine for the 786. Perhaps a mistake? Very, very interesting. :bigeyes:


On another note, I got the book "A Corporate Tragedy". Local library got it for me. Beat the high price tag. Started reading it Friday night. I'll probably finish it in the next couple days. The history of IH is fascinating. The McCormicks were in the very top of the 1%'s of their day. Incredibly wealthy. Company was too. Every die-hard IH'er should read this book. Barbara Marsh did her research. :beerchug:

I found the website that tells you where a copy of the book is locate nearest your location.

http://www.worldcat.org/title/corpor.../oclc/11622893

It appears the later 886's did have a D358 engine in them. The earlier ones had a D360. Atleast that what it says on this website. I couldn't remember off the top of my head so I had to look it up.

http://www.tractordata.com/farm-trac...86-engine.html

I found the website that tells you where a copy of the book is locate nearest your location.

http://www.worldcat.org/title/corpor.../oclc/11622893

Thanks DoubleO7! I'm ordering from intra-library loan tomorrow from Springfield.

ccguy

Yes the late 886 had a 358 German diesel reason being IH was using all the 360 engines in trucks and got the 358 brought in from nuess Germany. And yes it was a 986 cab. Towards the end of the 86 series IH had so few cabs they were grabbing cabs assembling them with whatever Fans they had. The cab serial tag states the model of tractor it was to be put on. Our 1486 had 1486 on it and the 886 with with the 360 had 886 on it. Then our late 886 with the 358 had 986 on it. I've read about this in one of the IH books and it's been talked about over on the redpower forum. The 886 wasn't the only 86 series like this, sure there are more out there.

Here is someone selling a paper back copy:
http://www.superscoutspecialists.com...gedy-book.aspx

Here are some photos of the Farmall Works plant, wish they were larger.

http://qctimes.com/gallery/business/...5f7f5e8.html#0

Thanks bill682! Terrific photos.

ccguy

thats really cool...thanks for posting that!!! go figure my favorite tractor of all time happened to be the 5 millionth one!!!

Here is a Wiki article that gives insight on the recent history of the company, what led to the big strike and the aftermath.

I believe this article is at least generally accurate and is what I recall happened during this period.

You will note, Caterpillar and John Deere, operating under the same outside influences survive to this day. IH did not!

You can draw your own conclusions about why the ceiling suddenly fell in. I have mine.

http://en.wikipedia.org/wiki/Interna...9%E2%80%931980

that was good reading, thanks for posting....i shouldnt say what i want too, but between corporate greed and egotistical ceo d%&kh%#ds, and 6th grade dropout union dips#$ts turning the same bolt everyday and thinking theyre worth 100k a year, just amazes me the course things have been on for awhile now.....but on the bright side; wouldnt it be crazy (or just plain fun to think about) if navistar international eventually bought back the ag part?? Or the cub cadet part (could it be worse than mtd??) almost would be cool if they got the whole j.i case and IH and split them and made them both again...??