Good thing or bad thing?

[mg2361]

I see a trend of small equipment dealers being bought out by huge equipment dealers (ie: 4 store Deere dealer being bought by a 20 store Deere dealer). Is this a good thing or a bad thing? What do you think guys?

 

[Vetech63]

Same happened here a few years ago.....The Texas dealer for Deere (HUGE and many stores) bought out the East Oklahoma dealer (3 stores). They immediately got rid of 80% of the sales staff, some had been there for over 20 years. They changed the way the parts and service department previously operated to THEIR way. It has sucked for the customer ever since. Most everyone here with Deere equipment refuses to use them unless its an absolute necessity. The service department is the biggest joke in the state. Seems they only cater to the governments and really big companies with mostly Deere equipment. If your a smaller operation, your F^&%$#D.

I got a call yesterday on a 750J with engine trouble. The first thing he said was "Don't tell me to take it to Deere."

 

[crane operator]

I don't think its necessarily a new phenomenon, and I don't think its a good thing either. Its kind of like trucking. If you own 4 trucks, you just as well have 14, and then its just as much work to have 40, and then you have 400.

The giant dealer company is already set up, the bankers are more willing to loan the $ to buy another dealership to someone that already own's several, as to someone who doesn't own any. The original owners of a dealership are usually in the second or third generation of ownership and the family group eventually just wants the $, so they sell out to the big boys who can borrow the $.

Unfortunately, the salesmen and managers just want their numbers to look good to "corporate", so they aren't really looking to help the customer out, they're trying to climb the ladder. The employee's really don't care too much either- they are there for the check- some big corps treat everyone like just a number, so they stick it to them back. Now that's not true of all big dealers or employee's, but its more often true than not.

I like doing business with people, I like having a few different parts guys that I know, I like having a mechanic that I know. I could care less what company he works for, I care if he's someone I trust to do things right.

I don't care if I'm now "tied into our network of 42 regional dealerships". I want the right part at the right price, and to talk to "joe" who I always deal with in service.

 

[funwithfuel]

Just happened out here w/ CAT . Patten was bought by Altorfer Patten wasn't small either
We didn't say things like we will order it from Cat we said we'll order from Patten now everybody says will order from Cat

 

[Birken Vogt]

One major company bought out all their dealers by Corporate. Now it is like beating your head against the wall whenever you call them for parts or anything. It is so awful it is like a big joke.

 

[TVA]

Elimination or reducememt of competition - is never a good thing!!!

 

[John C.]

The real issue is that the manufactures have put so many requirements on the dealers that a minimum gross income is required in order to survive. If your Cat dealership doesn't gross a billion a year, Mother Cat views you as marginally viable to them. The Deere people want a store every so many miles apart. If you have one covering half a state, they want you to put in four more or you had better be ready to sell the franchise before they pull it.

Where this is heading is direct sales by the manufacturer over the internet. Order the machine, specify a delivery location and the factory will give you a delivery date. Something goes wrong with the machine and it will communicate that to a service center who will dispatch a wrench with parts to repair the machine. Dealer profit is minimized or eliminated. You pay for the machine like a lease or rental contract but the prices are going to be sooooo much higher. If you are small, well you are a risk financially anyway. Mother Cat or Deere isn't interested in risky debt. They want the market share that can pay their exorbitant rates. Us lessers will have to deal with the Koreans and the Chinese for iron.

 

[TVA]

The real issue is that the manufactures have put so many requirements on the dealers that a minimum gross income is required in order to survive. If your Cat dealership doesn't gross a billion a year, Mother Cat views you as marginally viable to them. The Deere people want a store every so many miles apart. If you have one covering half a state, they want you to put in four more or you had better be ready to sell the franchise before they pull it.

Where this is heading is direct sales by the manufacturer over the internet. Order the machine, specify a delivery location and the factory will give you a delivery date. Something goes wrong with the machine and it will communicate that to a service center who will dispatch a wrench with parts to repair the machine. Dealer profit is minimized or eliminated. You pay for the machine like a lease or rental contract but the prices are going to be sooooo much higher. If you are small, well you are a risk financially anyway. Mother Cat or Deere isn't interested in risky debt. They want the market share that can pay their exorbitant rates. Us lessers will have to deal with the Koreans and the Chinese for iron.

I’m thinking that CAT and Deer up for the rude awakening, just like Detroit’s Big Three in early 2000s!

 

[joe--h]

Like f-ing Airgas.
Joe H

 

[funwithfuel]

One major company bought out all their dealers by Corporate.

Same thing in the trucking industry 20 years back. Ford got in bed w/ Freightliner then became Sterling. Navistar forcibly bought out dealerships. Paccar forged alliance w/ Cummins since Cat pulled out of heavy truck market. Freightliner was about all you could get a DD in anymore. Its ugly and headed our way. Mack is Volvo and vice versa.
Now you can't say, I need price and availability when shopping parts, it's the same across the board. Only option is shop dealers out of your territory and pay exorbitant shipping fees . We can't win this game. It worked with the trucking industry, they're using the same model on heavy equipment .

 

[funwithfuel]

I’m thinking that CAT and Deer up for the rude awakening, just like Detroit’s Big Three in early 2000s!

Only problem I see, it won't happen. All the farmers banded together against Deere and nothing happened. No legislation, no antitrust laws violated, not even right to repair held up. They continue to say, our game, our rules. Farmers continue to buy green. No change.

 

[AzIron]

As long as it will be easier to buy new and have warranty than it is to run older iron or second life iron from an owners standpoint it will not change

That said the price point for new equipment may push that issue pretty soon I am personally building a mixed fleet of new iron and old iron that can be worked on for some of these reasons

As far as dealers go it just matters the people in charge and the ones you deal with most managers are corporate players so they are accountants first and managers second they dont view a relationship with customers as something important

What most dealers forget is when times are lean it's the small outfits that keep them in business not the big ones

 

[Birken Vogt]

What most dealers forget is when times are lean it's the small outfits that keep them in business not the big ones

The managers probably know that but they probably have a hard time explaining that to the higher financial guys during the fat times so they just have to shake their heads and do what the boss man says, just like the rest of us do.

 

[Vetech63]

times are lean it's the small outfits that keep them in business not the big ones

I have seen this in my own business for years. I treat them all the same.

 

[DMiller]

Used to be dozens of Deere or CNH dealers around here, now are down to I am thinking Four Realtime Ag/Eq dealers for Deere statewide, CNH keeps downsizing where dealers end up changing brands to stay open or just disappear. I am not liking it much.

 

[AzIron]

Around here the case dealer has always ducked in my lifetime the cat dealer was awesome growing up but once the third generation turned it over to his college buddies it became the mantra is cat gives us the privilege to buy and run there iron

Until about 5 years ago the deere dealer was not a place you wanted to do lots of business big corporate multi state dealer they changed managers and seem to be pretty fair but I truly believe the real reason I am doing business there is I have an awesome salesman and he doesnt allow things to become problems

 

[John C.]

Frame up rebuild will never be an option anymore. No one will finance it and the cost of parts and labor is more than the cost of new with little or no warranty. It only works when the factory people decide to slow production of new big machines.

 

[HATCHEQUIP]

Frame up rebuild will never be an option anymore. No one will finance it and the cost of parts and labor is more than the cost of new with little or no warranty. It only works when the factory people decide to slow production of new big machines.

I guess were lucky. Some of the companies around are going for rebuilds to get away from the newer machine problems and down time

 

[funwithfuel]

I would like to see more go that way just to prove that we don't need this new garbage and emissions controls crippling our industry

 

[DMiller]

You all know where that will lead, parts will stop being produced and end up with that Taiwan garbage that fails all to quickly or as assemble.