Summerhill’s John Deere Tractor
(Photo : Greig Muir)
“A lot of things about Deere are as outsize as its big green tractors…
the largest comes in at 560 horsepower.”
It won’t be the first time you’ve heard it, but it’s an old Summerhill adage that “transactions build turnovers, relationships build value”. You also know that there were no inheritances here; Summerhill was built on the blood, the sweat and the sacrifices of a wonderful team, and we are what we are, because our people scripted their own history. That said, what we did get from our forebears was an appreciation of the value of relationships, and we inherited a few of those. Pat Goss Snr opened his first banking account with Standard Bank in 1916 (we’re up for the “gold watch” in 2016), his first fuel suppliers were The Atlantic Fuel & Fire Company (after seven name changes, modernly known as Engen), and he bought his first tractors in the 1930s from East Griqualand Tractors in Kokstad. To this day, we bank with Standard, we’re still with Engen, and until they shut their doors recently, we’ve looked nowhere else for our tractors than the Chapman family.
Pat’s first tractor was a paraffin-burning Ferguson “Vaalapie”, which you fired up on low-grade petrol until the engine was warm enough, and then as an economy, you switched over to paraffin. Ploughing was tough in those days, as these little fellows (revolutionary though they were) could only tow a two disc plough in a single lane, and struggled to pull a mower.
As Ferguson became Massey-Ferguson, their tractors progressed to the modern giants we see today, and at one time, this Canadian minnow rivalled American giant John Deere, in the quality of its products. Troubled days lay ahead however, and it seemed to coincide with the new generation tractors in particular, despite their appealing resemblance to the Boeing Dreamliner. Agricultural people are traditional in their ways, and are slow to adapt. In their attempt at diversifying their manufacturing base, Massey-Ferguson established bases in diverse places across the world, and while the opinion is personal, it seems it may have come at a cost to quality. Whatever it was, John Deere appeared to have managed a similar process a little better, and they’ve emerged with a reputation which dates back more than a century, not only intact, but enhanced. In the process, one or two MF dealerships have sadly ceased to operate, one of which belonged to our old friends in Kokstad.
It’s fair to say that whilst we maintained our loyalty throughout this transition, we couldn’t help looking across the farm fence at our neighbours, where the local penetration of John Deere is reputedly approaching 70%. While the appeal of their tractors lay largely in their performance and reliability, for Summerhill there was an added attraction; like us, they come in green and gold. The Chapman relationship has endured for close on seven decades, and as families, we’ve shared more than a half century in Christmas dinners. As long as they were in business, we were in business with them, but since that has changed, we’re wearing different clothes these days.
The history of Deere has a resonance with our own, though it’s even older. The company was founded in 1837 by a blacksmith named (you guessed it, John Deere); the company he built moved deliberately: it specialised in horse-drawn ploughs for nearly a century, before making the switch to internal combustion. It’s been managed by just nine CEOs in its 176 year history (that’s one every twenty years, on average). One result of that stability is devoted customers, who covet those iconic green caps.
The obvious reason for their ascendancy in the market place is their spend on research and development, which averages more than 4% of its annual revenue. This investment has taken Deere quickly into dominant positions in growth markets such as Brazil, Russia and South Africa.
That, its reputation for reliability and its dedication to innovation, has been rewarded with faster growth in international markets than any of its competitors. Domestically, it holds 50% of the United States agricultural equipment market, and it ranks among America’s top 50 most respected companies.
A lot of things about Deere are as outsize as its big green tractors (the largest comes in at 560 horsepower). The company’s growth, for instance. After ten successive quarters of record gains, Deere reported $32.6 billion in sales for 2012, another record. Its ambition is outsize too: it aims to hit $50 billion in revenue by 2016, and has seven new factories in the works. As for its tractors, bigger isn’t always better. Some of the company’s top selling models are too large for growers overseas, the soil often isn’t as firm, nor are the farms as sprawling as in the US, though that too, is changing as farms expand in grain production. To sell overseas, this venerable old giant has developed a suite of new equipment to appeal to the needs of those in faraway places, like us.