Delivering on a Promise

Mike Anderson, owner of Anderson Custom Application

One evening last October, Mike Anderson says he got a worried look from his wife, Donna. “She keeps the books and pays the bills,” says the custom applicator from Caldwell, Idaho, “and she asked ‘Are we down on acres?’”

“What you have to understand about our business,” Anderson explains, “is that 50% of our annual income is made during a 45- to 60-day window in the fall. And, this year, we’d also just bought a new buggy,” a 2011 TerraGator® 8303.

“She was concerned that we weren’t making any money, because, you know, you buy a brand new machine and the acres go down, and that scares you a little bit.  But that was one of the best falls we’ve ever had.

“We were actually up on acres,” Anderson says he explained to his wife, but she wasn’t quite convinced. “She said, ‘Well, the fuel bill’s down, and the price of fuel has actually gone up.’

“The fuel bill was down probably 10 to 15% at least, so it looked to her like we were doing less business.” But, Anderson says he knew what was happening. “In the fall, the only one of our machines that runs is the TerraGator. It’s thrifty on fuel with the CVT and the Sisu,” he says, referring to the AGCO Power™ engine.

Anderson had bought the 8303 after Larry Lusk at his longtime dealer, Western States Equipment, had sold him on the benefits of the CVT (continuously variable transmission), as well as the AGCO Power engine and the Terragator Management System (TMS), which maintains a link between the engine and transmission. Each of these technologies are AGCO exclusives, and Anderson had an expectation of greater fuel efficiency. But even his lofty expectations were less than how much the 8303 actually saved him. “We’re talking $1,500 to $2,000 a month. You know, that’s money you put in the bank. That’s easy math.

“Between the efficiency of the Sisu motor and the [TerraGator] management system,” continues Anderson, “it’s easy to get that fuel savings. You don’t have to change the way you work. You just let the machine do the job and it will just flat save you some money. This CVT is just the way to go, and the Sisu motor is just super reliable.”

Nimble, Strong, Committed

“Our record product launch this past August—the biggest in AGCO history—was a direct result of that promise to help our customers. Yet, that was just the tip of the iceberg.”

That’s music to the ears of Bob Crain, senior vice president of AGCO North America. “It’s great to hear,” he says. “That’s validation of what this company is, what it has become.

“Those technologies that Mr. Anderson mentions are just a few of the industry-leading innovations that AGCO has to offer and will offer in the next few years. But they are also tangible examples of a new spirit at AGCO.

“It’s a spirit that sets us apart from the Deeres and the CNHs of the world,” Crain continues. “We’re a financially strong, Fortune 500 corporation, focused solely on agriculture, but in many ways we still operate like a smaller company. We’re more nimble. We’ve got an entrepreneurial culture that’s not satisfied sitting on its laurels. We’re always looking to improve ourselves as well as the equipment we make, and to help our customers improve their own operations.

“AGCO,” he adds, “bears no resemblance to who we were 10, 15 years ago, even 5 years ago. It is a totally different company, black and white, that radical, in terms of products, in terms of processes, in terms of capitalization, in terms of the investments we are making, in terms of people. For instance, 10 years ago this company was investing $50 million a year in research and development. In 2011, that investment was $270 million. That’s a substantial jump in spending, and we plan for that to increase another 10 to 15% in 2012.

“That’s money that funds engineering efforts by the brightest minds in agriculture in AGCO’s global network,” Crain continues. “You can see it’s a huge commitment to help our customers be even more productive in the face of even greater demands.

“Our record product launch this past August—the biggest in AGCO history—was a direct result of that investment, that promise to help our customers. Yet,” Crain pauses, “that was just the tip of the iceberg.”

Money Back in the Producer’s Pocket

Now assembled in Jackson, Minn., the Massey Ferguson® 8600 Series—equipped with CVT and the AGCO Power engine—is just one example of AGCO’s commitment to help North American farmers become even more productive.

“We’re making major strides, in the functionality of the machines, and we’re keenly focused on efficiency,” says Bob Matousek, the research and development manager at AGCO’s Hesston facility.

“We’re setting new standards for fuel consumption versus work rates and so forth. That’s real, that’s not spin. We’re the leader in CVT technology. We’ve developed the lightest combines on the market, while upping their capacity and fuel efficiency. We’ve learned how to do radiators on farm equipment that don’t plug up, using a cooling fan that works only as hard as it has to—that’s technology that a lot of people are going to be chasing. And we’ve taken the swather into conditions that were just unheard of before, as far as difficulty and volume, and we’re bringing that technology back to our other equipment.”

Those are just a few of the innovations AGCO has recently developed—innovations Matousek thinks couldn’t have been developed in such a short period of time at other ag equipment manufacturers. He should know; he worked at one for 20 years before joining AGCO in 2006. He’s also a farmer who has grown wheat, corn and soybeans in Kansas and Illinois.

“Here at AGCO, it’s just been amazing. What the company is looking for are people who understand the basic needs of the customer—what they need to help them become more efficient. We’re encouraged to pursue those improvements and to do so fast, without the layers of bureaucracy,” Matousek says he often encountered at his previous employer.

He and his team members are also encouraged to use AGCO’s global reach to their advantage and the customer’s benefit. “We can’t assume we’ve thought of everything over here. So, we pick up things from other parts of the world and we bring them back here, then put them into our designs or our research.

“My job takes me literally all over the world to see how farming is done and how we can apply [those methods] to the North American farmer and put money back in the producer’s pocket,” Matousek continues. That allows AGCO engineers a wider range of influences to find solutions, he says.

AGCO’s global presence also allows one other very tangible benefit: “The broader we can make the market for a given model or type of machine, the more we can sell; therefore, the price comes down.”

And that, like the money Mike Anderson’s TerraGator saved him, is easy math. “I’ve been doing this 35 years,” says the Idaho custom applicator, “and the TerraGator’s just the most efficient machine out there to help me make money for myself.

“Again, it’s reliable, too, and it’s nice not to have to worry about, you know, things breaking down and trannies going out and all that kind of jazz. AGCO really hit a homerun when they came out with the CVT, the Sisu and the TMS. I’m sold.”