The Breakup of International Harvester and "What Really Happened."
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- čas přidán 27. 08. 2019
- How did one of the most successful farm equipment and truck manufacturers in history go under? Former IHC executive and former IH dealer Paul Wallem provides an insider's look at how a perfect storm of problems killed the iconic brand.
For more in-depth coverage about this moment in manufacturer history, Farm Equipment magazine has prepared some dealer-specific excerpts from the much larger book found here:
www.farm-equipment.com/intern...
The full book is for sale at www.HeritageIron.com - Věda a technologie
Still waiting to hear what really happend?
My aunt was office manager for IHC in the twin cities when the merger happened. She always said that trucks were what broke IHC. Too many old factories all over the US, a logistical nightmare, and a lot of them didn't sell well.
From what I understand, IH didn’t keep up like they should have, in modernisation of their tractors, etc.
The same thing that takes down every corporation. Years of top heavy bad management.
Bad, narrow and short sighted management pushing the company to engineer and sell under built overpriced junk to help pay for the financially top heavy corporate interests does it very time.
Nailed it sir
One of the big issues with IHC that wasn’t mentioned was the unfounded pension liability. This continues to be an issue with Navistar. There’s too many truck manufacturers and some of the current ones won’t survive and hopefully Navistar doesn’t become a casualty.
I suspect like a lot of big Company’s an issue was they had too many over paid and underworked people in management. Nepotism is one of the root problems with a lot of Company’s
Just an observer the video never really mentions anything about what really happened.
I don't think nepotism has anything to do with the unworkable arithmetic of a guy starting with the company at 20 years old, works for 30 years, retires at age 50 and draws on a pension until he's 80 or 85 years old.
@@abc-jq4hi that sounds like the situation in Kentucky with the school teachers. The state lets them retire too early and that creates a budget shortfall. Not to mention their pension plan is intentionally underfunded…
@@abc-jq4hi , your retirement pay is calculated by what you paid in. Just wait until you retire and start Social Security.
@@abc-jq4hi but that was the company promise.
The IH 06,56,and 66 series tractors were as good as anything made in their day. The 86 series was not. By the time the Magnum series was ready for production,the farm economy was in free fall. The IH rotary combine was,and is,the best product they make. I farmed with IH and farmall equipment for the first 15 or so years,then John Deere for the last 30. I still wish IHC could have survived ,without tenneco. I still see trucks with IH front license plates,and people with IH logo clothing and hats. Case IH,not so much.
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I have had good luck with the 86 series. Didn't like the 84 and 88 series. I have a case IH tractor and is great. We have not needed to buy a new tractor but these new tractors are so expensive that I don't know how you can afford one with 2019 commodity prices. I use a mix of everything on our century farm.
I have to read this book sometime soon, but I lived it from 1977-84. I miss the people - lots of great people that had to retool their careers when IHC was broken up and parts sold off. Harvester had a family culture and actually cared about their people - moreso than any of the other 4 OEMs I worked for since. "A Corporate Tragedy" by Barbara Marsh was written contemporary with the events she wrote in the book and is accurate in my view. I know the world has changed as well but if there had not been the economic perfect storm with all our markets down at the same time and the powershift had been introduced with the 50 series in 1981, things would have been different. If you cut me, I still bleed IH red.
International Harvester was still alive and well after the merger with Tenneco. The boxcar magnums were already developed tested and ready to go to market with an 88 series hood and 466 engine. Tenneco did not get the rights to use the 466 so they put a 505 cummins in it and made the hood look like a case. Axial flow combines were and still are 100% IH. Steiger was a good acquisition as well the only thing case contributed to this company was an updated manufacturing plant in Racine and the obnoxious name on the side of the equipment.
IH, Oliver, Allis Chalmers, Minneapolis Moline, the list goes on and on. Desoto, Plymouth, Nash, Hudson, Studebaker. They all seem to suffer in one way or another from the same problem. Unions, quality problems, or in some cases being ahead of their time. All suffering from the increased cost of doing business and becoming unable to compete.
Not to mention in the 1978 on to the later 1980's farming took a nose dive and the banks and lending institutions pulled the rug out from underneath farmers and smaller tractor suppliers! On top of that employees at this time were being laid off and replaced with cost saving robots! Then on top of that floods in 1986 and a drought in 1988! 80's were a time of renew spun backward!!!!!
@@andrewsarles3520 Which all started with that Demonrat moron Jimmy Carter and his Soviet grain embargo... it triggered the "terrible 80's" farm collapse because it collapsed grain prices and created huge surpluses that plagued the country for a decade... Remember the "Farm Aid" concerts put on by ol' Willie Nelson bless his heart!! The super-high interest and general economic malaise of the 70's didn't help either of course, or the stupid Arab oil embargoes that pushed fuel prices through the roof and pretty well kept them there. I still remember sitting in gas lines in 79...
Now we're getting ready to do it ALL AGAIN...
Later! OL J R :)
Poor management. Management has the responsibility of the company. A duty to the employees, shareholders and customers. You’ll never see a story about employees forcing a decision that resulted in models that didn’t fit the market. You’ll never read an article about how the employees were millionaires but management left the company broke. I’ve experienced this personally several times. Management leaves the company with a severance package bigger than any union burden. In the 40’s, 50’s & 60’s when unions were common, American products were the best in the world. Just FYI, Germany has unions. They are always included on the Board.
@@markw208 I don't disagree with a lot of what you say however during the 40s 50s & 60s there was very little competition outside of the US. As outside markets opened up the big three in particular started outsourcing parts to cut cost. There was a lot of bad government trade policies that forced it as well. I think striking at times when the company is in a bad way, International for example is not smart thinking on the part of the unions.
@@danw6014 , OK. I don’t want to contest your point of view or opinion. I do wish I could find an objective analysis of why the companies you mentioned failed.
This book is a series of interviews "after the facts" with some people that were not even remotely involved with IHC's final days. I refer readers to Barbara Marsh's book IHC, A Corporate Tragedy - We reviewed it in engineering. About IHC, many mistakes were done at many levels especially between management and unions fought one another to death (no pun intended). By mid-sixties, while tractors were increasing in sizes - few breakthrough innovations were truly made - Diesel engines were hard to get (I worked assembling IHC at the local dealership). By the early seventies, their implement line (along with Oliver's, MM, AC, etc... were being beaten by the innovations of New Holland (belonged to Sperry Rand Corp at the time). NH was designing new machines on a regular schedule, were dependable and even though NH did not have a tractor line (before being bought by Ford), few companies, if any, could compete with NH's quality, dependability, and technological advances. I visited NH engineering department as a student engineer. They were thinking future, IHC still had old plants, old designs (especially implements), etc... How sad, a large part of our history - IHC is/was not alone, all the other large companies followed (or sold equipment from import overseas... Ciao, L (FoMoCo engineering)
It’s not the one thing that led to their demise, but in true US fashion greed and getting rid of good people who knew the business and industry played a huge part. From the top of the ladder to the man on the assembly line. It’s been repeated time and time again😢
I went on one of the tours, it was like touring a 1940-50s blacksmith shop; I was only 12 or 13 at the time, right before the 86 series were starting to be built. But even I could tell it was time to invest some money back into the plant, it was just a dull dreary workplace.
Like bush hogs first “plant” dirt floor for building, a hole for the loading dock and a cracked up concrete pad for painting 😂
Interesting!
I hope to get this book someday...
That farmall 560D was developed in a rush, and still used the final drives from the older letter/number series farmall tractors, and ihc got a black eye from the national recall to fix the problem! It didn't help that deere would come out with 6 cylinder power in the new generation tractors! Deere took the lead from ihc and never looked back! Harvester had lots of problems, too many old factories, union strikes, into too many markets, like trying to go head to head with cat in construction, and dragging their feet to design a true power shift transmission! And getting ceo's that didn't know the ag market!
No
The 560 was only sold in North America and may have lost market share there but IH seemed to lost their market share worldwide in the 1970s. Their large tractors particular seemed to became outdated compared to their competitors. IH didn't seem to learn from their mistakes and there were several models of IH crawlers that suffered from rear end problems due to more powerful engines being fitted to older designs.
That is tough to read. May I find a giant print edition somewhere? Gotta have mercy on older citizens.
CIH didn't do themselves any favors either... why they're now Case/New Holland (CNH). CIH p!ssed me off and turned me off red machinery back in the early 90's when we were still farming cotton. Cotton pickers are high dollar machines (still are-- make combines look CHEAP by comparison) and we, being small farmers, were running older but still quite serviceable old IH cotton pickers, and they did a good job. Grandpa and Dad never liked the Deere pickers of the same era because they simply weren't as good of a machine-- they had weak blower systems to suck the cotton out of the row units, didn't pick as clean (left more cotton on the stalk) and put more trash in the basket with the cotton, making it harder for the gin to clean, leading to lower grades. SO we always ran IH pickers... that is, UNTIL IH basically gave all us little farmers running older stuff the middle finger, and quit providing parts. We (and others like us) kept our machines going for a few years by scouring the scrapped machines sitting in fencelines of neighbors, buying, borrowing, or begging parts, but the writing was on the wall. I kept one of my machines going via parts off three older machines we junked out ourselves. Then one year just getting started good on harvest, something gave up the ghost and there was just no fixing it. After trying fruitlessly to get parts from IH, the old guy who owned the store took me out back and offered to sell me a somewhat newer (but still old) picker he'd taken in on trade. First thing I asked him was, "can you get parts for it?" "SURE!", he lied, "We can get anything you need for it!" SO I ended up buying the thing and drove it home. Got the first pick done (in those days you'd pick cotton 2-3 times; most of the crop came off with the "first pick" but then you picked it again to get late-opening bolls by "scrapping" it once or twice, if there was enough cotton there to justify doing it... nowdays the fuel and machines are SO expensive and parts for them are SO high that they pick it once and cut it down... that and cotton is SO cheap it's nearly worthless... same lousy 60 cents a pound we got when I was a little kid in the early 70's). ANYWAY, finished first pick started second pick a few days later and BAM a driveshaft yoke broke. I went to IH and *surprise, surprise!* NO parts available... the best the partsman could do was "I'll put it in obsolete parts network-- maybe someone will have one on a shelf somewhere-- I'll let you know in a couple days". I waited and on the third day called him and he was like "Yeah I got a reply from a guy working at a dealer in Mississippi... he said they had a lot of old parts out in a warehouse out back he'd have to look when he got a chance... said he'd let me know maybe tomorrow. SO I call back tomorrow and he tells me, "Nope, sorry, no joy-- the boss decided to clean out the warehouse of old stuff and they tossed all that... nobody else has responded. BYE!" Well, that was it. For lack of $50 part, we couldn't scrap the cotton, and it wasn't worth it to try to pay someone else to pick it, so I just put the shredder on and cut the stalks and plowed the rest under. And I started looking for a new picking machine.
I had to get something from the IH dealer for something else, don't remember what, and the boss man came out and said he heard about the picker problem, and offered to sell me another somewhat newer picker (next model up from the one he sold me) and I looked at it but it looked like one unit was bent like they ran it into a tree, and everything has to be aligned properly in there to even pick cotton, and this one looked "racked" which meant it was junk basically. After deciding no I wouldn't even consider buying the thing, while he was still singing a swan song about what a great machine it was, I asked him straight up, "Yeah, and HOW LONG until IH quits providing parts support for THIS ONE??" He turned almost as red as the picker and went back inside LOL:)
Neighbor had a Deere 9900 picker diesel, cab, and air in decent shape. First thing I did was go talk to the picker guru my Dad had worked with a decade or so before at the Deere dealer when he was a partsman during the winters there in the mid-70's... First thing I asked him was, "Can you get parts for them?" He pulled the books out and SHOWED me and said, "Yep, we can get any parts you need for ANY of the Deere self-propelled double-row cotton pickers... we can get any parts for the combine all the way back to the old #45 combines too!" That sold me on Deere... Bought not one but two Deere pickers after that, wouldn't even THINK of buying an IH or CIH machine... and now in this area, which used to about 75%-90% red IH/CIH pickers, now I haven't seen a SINGLE RED PICKER in the field... they're ALL GREEN DEERE PICKERS!
Say what you want about Deere, but they DO back up their machinery with parts support. Doesn't matter if IH was a "better picker" (which was probably true for the late 60's/early 70's machines, maybe mid-70's, not true now Deere is better design now) IF YOU CAN'T GET PARTS SUPPORT FOR IT, sooner or later some $1,99 part will break and then you have a GLORIFIED LAWN ORNAMENT or SCRAP IRON. No more IH/CIH red junk with no parts for me!
Now, I DID buy an IH 470 disk at a sale one time-- I always thought IH had better tillage tools, at least disks anyway, than Deeres of the same era... BUT you can also get all the parts for them from ANYWHERE-- there's probably a dozen different aftermarket sources for stuff on them from Shoup and elsewhere... so you're not "captive" to IH/CIH/CNH capricious parts supplies. Now that they've merged AGAIN with CNH, and the whole mess is owned by FIAT, well, it's probably as big a mess as AGCO was/is for trying to get parts, since Oliver/White/Massey Ferguson/Gleaner/Allis Chalmers/Hesston and probably a dozen others I can't think of at the moment are all "AGCO"... the last Agco dealer in our region went broke about 15 year or so ago and is gone... Still see a few pieces of Massey equipment floating around but very little, and probably coming in from elsewhere via farm sales or auctions or whatever... What a mess.
Later! OL J R :)
Had the same issue with pickers in Texas, not so much with rice combines. Damned shame as to the demise of a great company
@@mikedaniel5067 yep I hear ya. They support their combines better I guess, sold way more of em I'm sure... Bet if you had an old 800 or 900 series your screwed but the rotaries, probly way better odds of getting parts
In my area (Manitoba) the dealers near me still have parts for combines and implements that go as far back as the 181 combine. They even have parts for the rare 402 pull type combine. Still sitting around, because ever since John Deere came around here, the only farmer I know that farms with case and international is my uncle. So since there’s no red around all the parts are still in stoke from the 60s and 70s
Gotta put profit in your product not your pocket. Someday big corporations will have to figure this simple concept out. Or just keep moving production to foriegn soil.
Well the truck business wouldn't be spun off, IH became it since the deal with tenneco said they couldn't use the IH name/logo for a set period of time. I'll still hold the belief that if they held out to the launch of the New Farmall they would have made it.
Anyone have a book on Allis-Chalmers somewhat odd demise?
IH is my favourite brand and always will be, they made solid tractors and implements until the 70s. The 06 series tractors, the 03 series combines (including the 402 pull type) were the best till the 70s when the 66 series tractors and 15 series combines came out after that everything was just horrible.
So what really happened?...another false thumbnail
It’s more or less a promo for his book
Was a waste pf time to watch
@@koryleague8833 I agree
I hope to read a corporate tragedy as well...
You failed to mention what really happened...
Never told us what happened...………..
by far the worst was massey ferguson, a few years later
I agree but the Five series started the demise loved the 165 175 1100 11:30 and 11:50 but the next series was nowhere near and then after that I owned a couple but couldn't get rid of them fast enough basically had to give them away I know John Deere didn't want anyting to do with them
806 not 803....
That's what I thought...we had a 806
Yeah that was like the 5600 I hope the book is better than this was if not it'll be a waste of money I'm a John Deere person but I don't mind other literature
@@caseycouch1660 look closely, it is a 560D not 5600.
@@toledojeeper2932I’m restoring my 806. It’s the international standard tread one, common where I live but rare in the mid west west. They were quite beasts
crazy, at the time of sale to Tenneco the AG division was starting to make a profit. The new Magnum series tractors, IF they would stayed the game I think IH would still be today. IH just made it through the high interest 1970's but dumping the heavy equipment side and then AG side. How knows, perhaps one day as the time expired they can use the IH logo, perhaps another tractor in the make.
I heard all 1586 tractors were made on late Friday afternoons or Monday mornings.....
I have to agree. I know a lot of farmers that bought 1586 tractors that were total lemons.
The entire 86 series was absolute shit. My great grandpa was in his 50s when he bought a brand new 1086 because he wanted a nice new tractor as he was getting old, but he learnt real fast the only thing that damned 1086 was good for was snow blowing, and he said it just like that he would say, “the only things that damned tractor is good for is snow blowing” so that’s what it did it’s whole life was run a snow blower. It’s really sad that IH started to half ass all of there equipment from the 86 series and on, to the point where it couldn’t even help and old man get away from the dusty hell of combining with an 806.
Deeply disappointing book to say the least.Have read this book.Barbara Marsh's 1985 book A Corporate Tragedy is still The Bible on this subject.Barbara goes into details many on the corporate where all the major decisions were made which this book somewhat ignores.Barbara goes all the way back to Cyrus McCormick in the 1830s & goes right into 1983-84 where this all came to a head.This wannabe just covers things from a IH farm equipment dealer opinion from the local level while I think that goings on at 401 Michigan Ave could have been covered much more extensively like it was in Barbara Marsh's great book.Thats where Brooks McCormick & Archie McCardell was.A misleading statement in the end of this book is that Things ended well.On what planet is Wallums living on that he could such a he could say such a thing??If things ended well International Harvester would still be in the fe business & both these books would not have to be written.So in reality things did not end well.And no editorializing by Wallums in this book is going to change that fact.I know that Barbara's is hard to find but I was able to get for $80 off of Ebay last October & when I started reading I could not put the book down.Her book is a national treasure & there has one yet to be written that is the equal of hers.
I have not seen the new book, so I'll not comment regarding it. The Barbara Marsh book is fascinating, I highly recommend it.
When did Harvester produce the 803 diesel?
I was not aware of a 803 or a 5600, I remember the 560 and the 806.
@@KeithFinkFamilyFarm Typos
Yes, I have a copy of A Corporate Tragedy and that's the real deal, very, very sad when IH went under!!
@@flvince After Alexander Legge,there was no real competent leadership at the top,it took 50 years to manage it out of business and hand over the ag equipment business to John Deere.I grew up on Harvester products,truck and tractor and its' really hard to hear people call red equipment Case and to know they are foreign owned.However,when you're the big dog for 125 years and you fall,you go down hard.Chrysler,GM and probably parts of Ford would be gone forever now if the govt hadn't bailed them out with our money.At least Harvester had the dignity to not ask for a bailout.All that's left is Navistar and they've been on shaky ground for 20 years.
Ih suffered the same thing pretty much as white I think they had some tractors and combines put a bad taste in people's mouths and there next purchase was green john deere flourished in the 80s and ih and white died in the 80s
INTERNATIONALS 2 biggest seller in the late 70's was their combines and 2+2s. DEERES 50 SERIES tractors with their FWA killed the 2+2 in its tracks. A lot of people do not know that DEERE almost went bankrupt too. It was a really hard times for farming back then.
@@rodneycraig3118 around here I can count the number of 2+2 on one hand and there were more gleaner combines here than IH the 30 and 40 series deere tractors ruled here along with the 7700 and 6600 combines then the 6620 and 7720 took over !!
IH had great quality then came bad quality and a lot of it like the old IH built like a tank
That’s right. The 06, 56, and 66 series were by far the best, the 26 series wasn’t very popular in the name of long hours of continuous work but they were ok. But everything from the 86 series and on was just half assed and didn’t have half the capacity of the 66 series did.
John deere had changed, best move they made, 4020 sold the program, and I H my favorite, have 4 , were getting away from tractors and the hold backs ,
It is all about money .of course but really make s urestock holder are getting rich. not making quality equipment farmer can pay cash for but to entangle the one that stops America from going hungry . a prisoner
West Pullman Plant June 1971 to July 1982😪
I'll tell ya what happened.....John deere
McCormick was first tractors and spices my mother I love and you trying Brad Hoover try to kill her my cousin Bobby you come back to cailfornia your statory will run out