PLOWED UNDER

Farmtrac dealers face demise

Bob Benedtti

First of three stories.

There are no oversized tires, chugging diesel engines or agricultural implements slicing through an open field of soil, but many of the 285 Farmtrac tractor retailers across America and Canada are slowly and surely being financially plowed under by a once-reputable Tarboro company that was internally gutted.

The Jan. 18 closing of Farmtrac North America's assembly and headquarters buildings at 111 Fairview Drive, and an Edgecombe County Superior Court ruling in late February to place the troubled firm into receivership are chronological benchmarks of the firm’s demise.

Receivership is a measure taken only when a company cannot afford filing bankruptcy.

According to court documents, the six-decade old tractor manufacturer has more than $55 million in total liabilities.

Retailers aren't the only ones to meet the corporate plow; so have loyal Farmtrac employees and customers. Many of the nearly 180 plant workers are middle-aged or older and have worked at the Fairview Drive facility since founder William Long Sr. operated the business decades ago. More than 12,000 customers across North America chose Farmtrac tractors for quality and affordability since 1999.

Farmtrac dealers are possibly the hardest hit hard by the closing; tilled from seemingly every angle, then ground deep into the soil of business landscape.

Lines of blue tractors fill retailer lots with a brand of merchandise whose tarnished reputation, lack of comprehensive warranty, makeshift parts depot and pale discounts make for difficult sales. Reported grapplings between financier Textron Financial Corp. and dealers just shy of white-collar arm wrestling have also been an impediment.

Such is the plowshare of big business.

Many retailers would like to quickly be rid of the 2,800-plus blue tractors on dealer lots across North America and the accompanying headaches. About 960 units sit at headquarters in Tarboro.

"I don't want anything more to do with them," said the owner of one East Coast dealership. "I wish they were gone – for good."

An eastern Oklahoma retailer known as CHH on online bulletin board TractorByNet.com agrees: "I would rather sell this tractor at a huge discount and pay the floor plan company the difference to clear it."

But dealer efforts to get out from under existing units have been a slow, excruciating cross to bear. An ever-deepening quagmire, tractors have fallen severely below market value due to Farmtrac's terminal outlook, prompting speculative purchasers to hold out for fire sale closeouts.

Kallyn Wells and husband Darrell Wells of central Florida, owners of Southern Equipment Sales & Service, feel the squeeze of heightened – almost unrealistic – customer expectations. The pair has offered blue units to prospective buyers for $2,000 under invoice. Since January, all but one turned her down.

"They say 'Call me when you get zero percent financing, bigger discounts and a better warranty.'" The animated Wells exclaimed, "Heck, I am giving you a discount already – out of my own pocket!"

Then add the economically depressed nature of the market.

According to a TBN.com member identified as Hurliman, "Normally, I think these tractors would sell with discounts, but with the economy in the tank like it is in my area, I don't think even a 50 percent discount would move many."

Gerald Sims of Sims Tractor Sales in Lecoma, Mo., is living proof of Hurliman's theory.

"I made a dollar and 11 cents today," said Sims. "We don't sell many [tractors] these days." A pair of nuts and bolts accounted for the day's lone tally. "I can't even keep the lights on for that amount."

And more dealers consider the bitter financial pill of selling short with the looming possibility that Textron could pull the plug at any moment – crunch time.

"If they do (ask for payment in full), it's over. I know I can't afford to pay for them ... and neither can a lot of other dealers," said Billy Yeargin, the owner of a small outdoor supply shop in Oxford.

The thought of "pulling the plug" makes Wells physically ill. Writing off loss is different for a dealer than for a multi-billion conglomerate. For dealers like the Wells family, it could be a loss of livelihood – and reputation. Both have already been severely damages and are painfully difficult to rebuild.

Wells' store exclusively stocks Farmtrac products and nine of remaining 12 tractors is due for paid curtailments (a monthly installment emulating one made by a purchaser) plus interest. The remainder of the fleet will be due in July.

That kind of dire situation is financially and emotionally stressful – and is taking its toll on dealers.

"I need to buy stock in Advil and Tylenol PM," says Wells, trying to battle through by applying humor. "I live on those things like they are chicklets."

Others are upset and angry but have chosen a different approach. Joel Thomas, 40, of Oakboro Tractor in Oakboro, acted swiftly and decisively. When the Fairview Drive facility closed in January, he took a two-pronged approach.

"I went out and got two other [tractor] lines ... immediately," said Thomas, who stocked Farmtrac tractors since opening his doors in 1992 until January, "and I put the blue ones in the back, out of sight." The level of disgust in his voice elevated. "I don't care if they sit back there and rot."

Thomas is polarized; like many, he has nothing but praise for the Farmtrac product ñ and apathy for the company's recent business ineptitude. "They make a good tractor, especially for the price but the damn Indians that took over ruined that company."

Created by North Carolina native Long in 1941, Long Manufacturing built high quality tractors and prided itself on delivering dependable customer service. Led by the company founder into the 1990s, the firm's name changed to Long Agribusiness. Escorts Ltd. of Faribad, India became the parent company in 2002 and rebranded the company as Farmtrac.

Retailers and customers were also being shorted on pay or reimbursements. Unprocessed sales bonuses, warranty claims and rebates were all in a sea of paperwork Farmtrac receiver, attorney James C. Marrow of Tarboro, said, "apparently hadn't been taken care of for years."

Dealerships had essentially been eating warranty parts and labor costs "as far back as 2005," according to a majority of dealers. Parts and repair for tractors play a major role in operating as a retail seller, especially when new unit sales are almost nonexistent.

"You have to do whatever's necessary to do business," said Clay Ellerbe of Byron, Ga. "These are lean times."

Among those in the dealer network, ethical values of loyalty and integrity also influence the decision to bear the brunt of parts and labor costs to properly serve clientele.

"I've always taken care of my customers ... and they've always come back to do business with me," said Thomas. "That's how you build a successful business."

Albert Lester, 65, of Lester's Tractor in Shreveport, La., believes a person's name is the bottom line value.

"Making money is one thing, but reputation is another," Lester said. "You can't buy that."

But Lester focuses on an even wider scope.

"It's about legacy; the only real thing you leave behind," Lester said with a sigh. "If people say, 'He was an honest, hard working man. He was a good ole boy,' then you did it right."

For now, Monday was the day Lester and others in Farmtrac circles are talking about.

According to a June 10 e-mail from company Engineering Head Tony Pierce to retailers, Pierce said, "the date was set by him [Receiver Assistant Doug Gurkins] for a date to start planning for the liquidation ... for all tractors, service parts, raw materials, equipment and real estate."

Liquidation. The drag may be making the final turn this week before its last pass over the business formerly known as Farmtrac.

Text Only