Machinery Chatter
Jim Patrico Progressive Farmer Senior Editor

Tuesday 10/02/12

A Big Event for Fendt and AGCO

AGCO was not going to let anything spoil this two-day party. After all, it's a big deal when you open a $350 million factory while at the same time launching a new line of high-tech Fendt tractors. Guests were coming from 30 countries to the German city of Marktoberdorf -- dealers, customers and media. Tomorrow the prime minister of Bavaria would be on hand, brass bands were rehearsing and caterers were preparing van-loads of food and drink.

Even rain and wind couldn't dampen the mood as AGCO opened a new factory in Bavaria to build Fendt tractors. (DTN Photo by Jim Patrico)

CEO Martin Richenhagen had just finished an upbeat assessment of the global company's business and product manager Peter-Josef Paffen had previewed the highlights of the new 500 Series Fendts (More on this in a future blog.) But outside the huge white event tent, the sky was darkening and the wind was picking up.

One of the speakers said, "Don't worry. There is nothing outside to hurt you," as he directed us into the twilight and toward the oval track where we were to see the new tractors and other Fendt machines strut their stuff.

At first, it looked like he was right about nothing to hurt us. Indeed, a hopeful rainbow hung in the eastern sky as we exited the tent. But just as it appeared that the machinery gods were going to smile on the parade, rain began pelting down and the wind whistled up the track toward us. Umbrellas turned inside out and journalists scurried to keep their cameras and notebooks dry.

Don't let anyone tell you Europeans are wimps. I took the weather's beating for a while, then beat a retreat to the nearest demo tent. Most of my European colleagues gutted it out. They stood in the wind and rain and watched as brave Fendt presenters yelled into loudspeaker mikes and waved the tractor drivers around the track, past the reviewing stands and back into the worsening night.

It was not an auspicious start.

AGCO has much more than construction money and an enormous party-tab invested in the new tractor plant in Marktoberdorf. The plant is a symbol of the 22-year-old company's prosperity and aggressiveness. When Richenhagen -- a German native, now a U.S. citizen -- took the reins in 2004, the company had $3.5 billion in annual sales and a stock price of $12/share. Those numbers now stand at $10.5 billion and $45. AGCO's number of German employees doubled in that same time frame. The new factory in Marktoberdorf will be able to build 20,000 Fendts a year. If demand grows, it could produce more.

"I believe we have done a good job," Richenhagen told the audience.

Building a better bottom line is only one of the jobs a global company must do. It must also weave competing interests of many different nations into a cohesive working team. When AGCO bought Fendt in 1997, the German manufacturer was one of the dominant tractor brands in its homeland and other parts of Europe. Not so much in North America where AGCO has its world headquarters. Some in Germany, and especially in the company town of Marktoberdorf, worried that the Americans would forget Fendt or move its manufacturing elsewhere, perhaps to some country where labor costs were lower.

By investing instead in Marktoberdorf, Richenhagen and his board erased those worries. "It is important to have products made in Germany," he told the audience.

After the drenched crowd came back under the tent, AGCO treated them to a cover band doing lively -- if culturally incongruous versions -- of John Denver's "Country Roads," and James Brown's "I Feel Good." There followed German-style oom-pah music. The finale was a shirtless acrobat, who balanced himself impossibly on rolling cylinders atop stainless steel boards teetering on more cylinders, etc. Somehow, the balancing act seemed an appropriate end to the day.

Fortunately, Day Two of the party dawned bright, the guest list swelled to about 700 and the party rolled on. AGCO officials wore relieved expressions. Paffen joked that, "We talked briefly with the Pope," and gorgeous weather replaced the rain.

Sun streamed into the translucent event tent as 16 kids in traditional Bavarian costumes gave an animated skit in praise of AGCO.

A parade of dignitaries and politicians trooped to the stage. Give any politician a podium and a microphone and time stands still. Put them in Germany where enthusiasm is the second language, and you get talk of "happy, happy citizens," and Bavaria as "a kind on paradise" of low unemployment and content workers. (This last from Bavarian Prime Minister Horst Seehofer.)

Finally, 150 Fendt employees encircled the audience, holding hands as they danced and sang a song about Fendt. The crowd roared and clapped in approval.

To seal the deal, the audience was invited outside to the factory entrance where a Protestant minister, a Catholic priest and two Muslim clerics invoked divine blessings on the plant. A new 500 Series Fendt tractor rolled out the door as the crowd cheered again.

It had been a glorious day, "a major step in the life of AGCO," Richenhagen said.

Posted at 2:24PM CDT 10/02/12 by Jim Patrico
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