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Happening to Deere, what about the others?

Discussion in 'Lawn Mowing' started by 65hoss, Jun 29, 2001.

  1. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    Deere to Eliminate 1,250 U.S. Salaried Positions
    Moline, Illinois: Deere & Co. plans to eliminate 1,250 jobs,
    or 8 percent of its U.S. salaried workforce, as demand for construction
    and lawn equipment dwindles.
    The company plans to take a $140 million charge in its fourth
    quarter ending in October to cover severance and other costs. It's
    offering early retirement to 2,500 workers, with the goal that
    half will accept. Deere, which employs 43,700, expects the action
    to save $90 million a year.
    Deere's customers are buying fewer excavators and loaders as
    the U.S. economy's expansion slows. The company has blamed weather
    for hurting sales of lawn-care equipment in two of the past three
    quarters. Deere, the biggest maker of tractors, has tried to
    counter slower sales in the past several years by adding products,
    upgrading order processes and improving manufacturing.
    ``What you're seeing is a reflection of how difficult
    economic conditions are for the manufacturing economy,'' said John
    Inch, an analyst at Bear Stearns, which rates Deere ``neutral.''
    Sales of construction and lawn equipment has ``only just started
    to come under pressure,'' he said.
     
  2. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    That is what Deere says is happening. The fact of the matter is how many heavy duty pieces of equiptment can you sell before the market becomes saturated with new machines. It's not a function of a slowing economy but of everybody who wants one has one. Selling large equiptment is cyclic. It comes and goes.

    It basically the same thing with lawn and garden equiptment. Deere and Cub Cadet have been pushing their machines for so long at sale prices (how many TV ads do you see a day for one or the other?) that everybody has one. Deere is blaming it on the weather. What in the Sam Hill are they talking about? Every respectable LCO is reporting record sales due to increased customers and weather that has been cooperating. Sure, the year before last there was a drought on the East Coast but last year and this year so far have been great weatherwise.
     
  3. Vandora Lawn & Landscape

    Vandora Lawn & Landscape LawnSite Senior Member
    Posts: 386

    Maybe its because very few people use deere commercial lawn equipment?
     
  4. Eric ELM

    Eric ELM Husband, Father, Friend, Angel
    Posts: 4,831

    John Deere messed up when they didn't make a ZTR sooner and make it themselves. I have not seen a JD ZTR except at a dealer and this used to be JD country around here. I used to mow with them too several years ago. :eek:
     
  5. Kent Lawns

    Kent Lawns LawnSite Senior Member
    from Midwest
    Posts: 870

    I agree.

    Deere's effort to buy other manufacturers (i.e. Dane) is an effort to gain market share, but (my guess) to aquire engineers and thinkers to design equipment the pro's will get exited about.

    Short of a 7 gauge stamped deck, I don't see any piece of Deere lawn equipment that offers more than the competition does.



    The econominic slowdown hasn't reached Caterpiller or Toro/Exmark yet.
     
  6. mowerconsultant

    mowerconsultant LawnSite Fanatic
    Male, from Syracuse, NY
    Posts: 9,760

    On a side note:

    Deere still IMPORTS (into the US) tractors with there name on them
    also,
    Deere, employs thousands of people in Mexico at sub standard wages, are any of these employees being laid off ?

    Just something to think about........
     
  7. Volhunter

    Volhunter LawnSite Member
    from TN
    Posts: 33

    Can't say for sure, but I can say I am a Branch Manager for a company that sells electric motors, controls and drives. The economy in my area is really bad. Mfg. plants in the area are laying off and several have shut down completely in the last few months. The ones that are staying open are spending as little as possible and only for absolutely necessary repairs. Almost no new projects or in-house expansions, etc. I hope it turns around soon, but as stated above, the green industry seems to be doing ok, at least for the smaller operators.

    Hoss, have you heard about one of the big operaters in our area scaling way back, laying off workers and selling equipment? That is the first big hit on an LCO in the area that I have heard of.
     
  8. rdh

    rdh LawnSite Senior Member
    Posts: 394

    they may be lieing to america to move things to mexico.
     
  9. EJK2352

    EJK2352 LawnSite Bronze Member
    Posts: 1,150

    Eric is right on. My past employer ran 430 & 455 JD garden tractors for years. We demoed an Exmark Lazer in 1996 and saw such a jump in productivity that we traded off those Deere's on Lazers. Deere missed the boat big time!! They should have designed & built their own ZTR 10 years ago. With some forsight they may of kept a bigger share of the commercial market & wouldn't have the economic problems now.
     
  10. Scag48

    Scag48 LawnSite Fanatic
    Posts: 6,068

    The problem with Deere's construction equipment is just as Richard Martin said, they produce way to many pieces of equipment. They blow a ton of money on research and devolopment. Every year, or almost every year, they have a new series out in some line of equipment. This year it is their new G-series backhoes, last year was the H-series dozers, a couple years ago the 200 series skid steers, and so on and so forth. They push their equipment, which good equipment it is, but there is just way too much out there. All the contractors in my town have already bought new equipment and once you have new stuff, it's gonna last you a few years. They've saturated their market. It's going to be slow, and in a couple of years, it might pick up for them. I predict that new excavators will be coming out. With Cat's new C-series excavators already out, Deere is under pressure. I guess we'll see what the response is there.

    As for lawn equipment. Yeah, their stuff is good, well, their homeowner stuff is good. I've heard pretty good things about their walkbehinds, but I'm not going to judge because I've never used one, but their ZTR's? A whole other story. You'd think that with their technology, they would have designed one sooner, now they're paying for it. But, with the purchase of Dane, they might gain an advantage, but with their screw-ups in the past, who would ever want to try one of their ZTR's again?
     

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