WHATEVER HAPPENED TO McCORMICK & DEERING ?
THIS TRACTOR’S HISTORY REFLECTS THE PAST CENTURY’S CORPORATE CULTURES AND HOW MISMANAGEMENT SERVES AS WARNING TODAY FROM OUR PAST
It has been a long time since someone asked, “Whatever happened to McCormick & Deering ?” I happened to notice an abandoned McC&D Tractor in Tumcumcari, NM and I was impressed with its condition and wondered what might have been the history of a piece of equipment which pulled its weight through the 20th Century to end up on this roadside in New Mexico.
Between the mid-1880s and 1902, a vicious battle known as “the Harvester Wars” was waged on America’s grain fields. The farm equipment manufacturer’s capacity to build harvesting machines far exceeded demand, so sales representatives of the two giants, McCormick Harvesting Machine Co. and Deering Harvester Co., along with their smaller rivals, tried every trick possible to sell their binders to reluctant farmers. The struggle became so intense that competing salesmen would not only bribe farmers to buy, but also allegedly sabotaged the competition’s machines and physically attacked people.
As the war dragged on, binder prices fell drastically and selling expenses grew to more than 40 percent of total sales. Something had to be done and, in 1902, a merger among the five largest companies was brokered by the J.P. Morgan banking firm. The McCormick, Deering and Milwaukee Harvester companies, Piano Mfg. Co., and Warder, Bushnell & Glessner (Champion harvesters) merged to become the mighty International Harvester Co. For many years after the merger, IHC sold two parallel lines of equipment, one named McCormick and one named Deering, each slightly different from the other, but wearing the IHC logo. This was deemed necessary since each line had its loyal customers, and there was usually both a McCormick and a Deering dealer in every farm community.
The U.S. government filed an antitrust action against IHC in 1912, and the suit dragged on until a consent decree was signed in 1918. One of the terms of the agreement called for IHC to have only one dealer in each town, meaning that the dual McCormick and Deering lines of equipment could no longer be maintained. Indeed, the expense of designing, building and supporting both lines of equipment had been a serious drag on the company, so in 1923 a new grain binder – one combining the best features of each of the older machines – was introduced and called the McCormick-Deering. All of IHC’s other farm implements soon followed suit, and the famous McCormick-Deering line was born. McCormick-Deering farm implements and Farmall tractors helped IHC become the giant of the industry. Its 1923 U.S. farm equipment sales of $150 million tripled those of second place Deere & Co. “Harvester is, of course, the greatest single agricultural enterprise in the world,” trumpeted Fortune magazine at the time.
However, even a corporate giant such as IHC wasn’t immune to the calamity of the Great Depression. By 1932, its U.S. sales fell 78 percent, and the price of its stock dropped to $10.37 from a 1929 peak of $142 per share. Tens of thousands of Harvester employees were laid off and remained so through most of the lean 1930s. The McCormick family had, starting as early as 1862, crushed several attempts at unionization by their own workers. In the late 1930s, though, the unions started organizing among Harvester’s workforce of 60,000. IHC management fought bitterly, but by 1945, most every worker was a union member. After VJ Day, Harvester started a round of diversification and acquisition that cost the company a fortune and diluted its focus. The old core business of farm equipment and trucks was joined by construction equipment and home refrigeration. Meanwhile, the attitude of IHC’s management was summed up by one longtime dealer: “They thought that whatever they built and painted red was going to sell.” Just three years later Deere green outsold Harvester red for the very first time.
A combination of factors finally killed the International Harvester Co. These included the huge and expensive proliferation of truck models, and the stiff postwar competition in appliances. Also, several of IHC’s new crawler and farm tractor models were rushed into production without being thoroughly tested, and then broke down in the field. Obsolete factories were kept too long in service, and there were chronic and costly labor problems. All of these were reasons, and yet, the reason for all of these was poor management. Getting back to the original question, “Whatever happened to McCormick-Deering?” The name was used on farm implements until some time in 1948 or 1949, when Deering was dropped and McCormick alone was used. During the 1960s, the proud McCormick and Farmall names were replaced by International, the name Harvester’s farm machinery carried until the sale of the farm equipment division to Tenneco Inc. in 1984. It occurs to me you can reread this story and replace McCormick-Deering with Gannett and tractors with newspapers, and their mismanagement parallels the other.
Author Sam Moore has been interested in tractors, trucks and machinery ever since his years as a boy on a farm in western Pennsylvania. He’s been a collector of antique tractors for the past 11 years.