The Daily Southerner, Tarboro, NC

Local News

November 14, 2008

Farmtrac maybe sold

South Korean firm makes offer

W. TERRY SMITH

Farmtrac North America may be sold.

Attorney Jim Marrow, who is the court-appointed receiver for the Tarboro company that has been shut down since January, has received a $10 million offer to buy the beleaguered Tarboro firm.

Marrow filed the motion to sell in Edgecombe County Superior Court on Monday and now must wait 10 days for any upset bids or objections. As the receiver, Marrow is authorized the sell the real and personal property of Farmtrac.

Judge Frank Brown is expected to rule on the sale on Nov. 3.

The offer is from LS Mtron Ltd. of Seoul, Korea, formerly LS Cable, which recently reorganized. Earlier this year, LS Cable purchased Superior Essex, which has a facility in Tarboro.

LS Cable was one of the two suppliers of basic units for Farmtrac and is owed $11.6 million.

The offer includes the purchase at the plant at 111 Fairview St. off Main Street, the company store on West Northern Boulevard and all Farmtrac's tractors and parts.

Most of the cash will be claimed by Textron Financial Corp., which has stated it is owed about $13 million.

Since LS Mtron is buying the manufacturing facility on Main Street, speculation is that many of the 180 employees that were laid off on Jan. 18 will be put back to work. Jae-Yong Sim, a senior manager with LS Mtron, was in town Tuesday but unavailable for comment.

"I feel having people here that can get the work done was a major factor in the sale," Marrow said. "There is a lot of talent here.

"The difficulty this company had was not the doing of the employees."

A ruling in Edgecombe County Superior Court in late February placed the troubled firm into receivership.

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

Since Farmtrac closed its doors and Marrow was appointed receiver, the tobacco barn division was sold to Richard C. Anderson of Leggett and Robert H. Pope of Rocky Mount for $650,000 and a salvage auction in April raised $340,000.

Marrow said most of the money from the barn sale went to Textron.

Eight people have been working at the building, answering the phone and mail and selling some parts. In July, during the hottest time off the summer, 26 people worked putting together tractors using available parts.

"We ran an assembly line," Marrow said, "and they did a good job."

Marrow himself thought the deal might have come together sooner if not for LS Cable undergoing a major internal reorganization that was completed by July 1.

"I negotiated with them for some time," he said. "They were some of the first people I met in late February."

There were other proposals from other entities "but just not acceptable," Marrow said.

LS Cable had representatives in Tarboro when Marrow met with Farmtrac dealers at the Comfort Inn on April 24. In January, Farmtrac had 275 dealers but Marrow said that number had dwindled when the product for sale lacked a warranty.

At one time, Marrow went to London, England to meet with a prospective buyers. He made the roundtrip in three days.

When he got back, Marrow said, "I feel like I am somewhere between the World Cup and "Survivor."

His cell phone tells him what the time is in New Dehli and Seoul.

"It's been a very slow process," Marrow said. "It's a huge business. You just can't walk in and fix everything. The environmental remediation piece requires study, real attention. Market analysis ... It's complex."

LS Tractor Division calls itself one of the fastest growing tractor manufacturers in the world, guided by the philosophy of the LS Group: "Always with our customer."

Created by North Carolina native William Redden "Bill" Long II in 1941, Tarboro-based Long Manufacturing prided itself on high quality tractors and dependable customer service.

Long established contracts with numerous major companies, including Ford, by the mid 1950s and opened satellite stores in Iowa, Pennsylvania, Tennessee, Georgia and Washington state.

It began importing tractors from Brasov, Romania-based Uzina Tractorul Brasov and filed for bankruptcy in 1985, but returned by 1987 after reorganization.

In 1998, Long Agribusiness was purchased by the Escorts Group of Faridabad, India; a leading engineering conglomerate that focuses on agri-machinery, construction and material handling equipment, railway equipment and auto components.

The Long name was dropped in favor of the Farmtrac brand.

Farmtrac sold more than 3,300 tractors in 2005, 2006 and 2007.

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