The Versatile tractor plant in Winnipeg already has a suitor, and it is Canadian.
Buhler Industries Inc., maker of Farm King and Allied products, and its partner Weidemann GmbH & Co. of Germany, have approached New Holland and Case about buying the plant, which produces Versatile and Genesis tractors.
Buhler was a competitor to New Holland in 1987, the last time the Versatile plant was for sale, said Craig Engel, Buhler chief operating officer. Buhler was considered to be too small.
“Today, the reverse is true,” Engel said.
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“We’ve got about 600 jobs and (the Versatile plant is) down to less than 200 active employees.”
Also, since last year Buhler has been working with Weidemann, distributing its line of small tractors called tool carriers or wheel loaders. Buhler has been working out how to produce these tractors in North America.
If it can buy the plant, Buhler will produce all three lines of tractors – the four-wheel-drive Versatile, the recently introduced two-wheel drive Genesis and the smaller Weidemann tractors.
“We think it is high time a low-cost producer gets into the tractor business,” Engel said, noting Buhler’s low advertising budget and small “white collar” staff.
“We don’t spend one nickel or dime on administration or effort that isn’t of value to the customer.”
An indication of Buhler’s efficiency is that New Holland hired it to make the loader assemblies for the bi-directional tractor also assembled at the Versatile plant, but which will be relocated to another CNH plant.
When CNH, the new company formed from the recent Case and New Holland merger, announced that it would have to sell the Winnipeg plant to conform to United States competition laws, industry observers said whoever buys the plant will have to have an extensive distribution network.
Engel said Buhler’s Farm King and Allied line is sold at 1,000 dealerships, many of which would also be able to sell Buhler tractors.
“But distribution and marketing of this type of product has changed drastically over the last five years and will continue to change.
“You don’t need to have a four-wheel drive tractor dealership in every rural community,” Engel said.
“Farmers are willing to drive some distance, perhaps hundreds of miles, for a good product at a good price.”
He added that the company would probably be able to produce the Versatile plant’s existing line for two years under the CNH banner, supplying CNH dealerships before shifting to a Buhler brand.
Also, the company’s association with a European company opens the door to overseas markets.
About half of the Genesis tractors produced by the Winnipeg plant are already exported to Europe, he noted.
In 1998, Buhler had net earnings of $7.1 million, up 16 percent, on revenue of $89.2 million.
To the end of the third quarter in 1999, the company reported that earnings were down by four percent and revenue down by 10 percent compared to the same time last year.
The firm also makes furniture and mirrors.
