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.