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What went wrong at IH ??

D

derwen1959

Member
Although it is 35 years since IH finished and nearly
40 years since I worked at main IH dealer here in
Mid Wales UK and after watching promotional
Videos from the 70's on u tube I would like to know
What went wrong with a huge manufacturer of tractors and machinery that had been going for over a hundred years
I know my boss made a lot of money by inventing
Warranty claims and probably many other dealers
as well but did this lead to downfall at IH?
 
Dunno if it's readily available on your side of the pond, but the book "A Corporate Tragedy" by Barbara Marsh is a good read on the subject.
 
You do not pay the same $$$ per share to your preferred stock owners when you are borrowing $$$ to do R&D and then borrow more money to pay the same amount the next year. However, if all the preferred stock owners are on the board or the "friends & family" of the board of directors, it'll be OK! Is'nt that how it's supposed to work? Oh, don't to forget to ignore every thing that your division managers suggest & tell you that may stop the hemrage of money from the company. jal-SD
 

Down here... they kept making more hp on the same transmissions and rear ends, till almost new tractors were taking out the ring gear bolts and the transmissions and not being covered under warranty. That was the big reason folks down here had to walk away. All of them were "red" families living in "red" country,,,, but not after that....Most went green.

Dont know about the rest of the story...
 
Poor management, labor strikes, trying to take on Cat in construction, Ford/GMC, and maintain their dominance in farm equipment. It all percolated down into their products as time went on and the trend started after WW II.
 
They kept building things that people couldn't buy due to the Carter years policies. 19 percent interest, coupled with a grain embargo on the russians that ruined grain prices. They thought they could push extra production on to the dealer with long floor plans. Eventually they all ran out of money. That's my opinion.
 
Divided management and divided share holder groups since the early 1960's. Bad history with labor unions allowing for a horrendous year in 1979. Weak performance in terms of profit. Jack of all trades but master of none when it came to adding product lines post WWII. Competitors making inroads on products such as JD with tractors and combines plus New Holland with hay and forage. Recession hitting two key divisions in 1980 cutting revenue. High interest rates starting in the late 1970's hurt some farmers ability to make purchases. Too much to overcome post 1980 even though IH upgraded a fair mount of its ag line from 1970.
 
(quoted from post at 20:02:16 11/28/19)
Down here... they kept making more hp on the same transmissions and rear ends, till almost new tractors were taking out the ring gear bolts and the transmissions and not being covered under warranty. That was the big reason folks down here had to walk away. All of them were "red" families living in "red" country,,,, but not after that....Most went green.

Dont know about the rest of the story...
Click to expand...
he pullers today are making more HP than the IH engineers ever imagined on the same transmissions and rear ends.
 
And going 300ft at a time down a track is a lot different then 3,000 hrs of hard pull in the field. Pulling means nothing.
 
The fact that they were still trying sell M technology in the 80's instead of improving things. Like using the same poor little hydraulic pump in the 06,56,66 tractors with only a measly 12 GPM and no real pressure on it also. Equipment changed and they didn't. Then tried to change all at once with no cash to do it with.
The reputation of the 460/560 rearend problems haunted them for a while also. Lost market share when the new generation deere came out with better hydraulics power shift transmission and such. They hung onto open center hydraulics when they should have had closed center options. I know I sound like that was a big deal and it might not have been in some ares. Though if you were in an area where multiple hydraulic motors are needed to be used to run harvest or planting equipment it would be a bigger deal.
 
When the farm economy was hit financially they were outdone by companies in a better financial position,better products,better advertising,management with more foresight in things like the emerging large garden and compact tractor market.At the time John Deere was looked on as the tractor of the future,IH had Grandpa's tractor image.I've run about every brand of tractor around and have never been on an IH tractor I really like to drive.
 
(quoted from post at 10:30:01 11/29/19) When the farm economy was hit financially they were outdone by companies in a better financial position,better products,better advertising,management with more foresight in things like the emerging large garden and compact tractor market.At the time John Deere was looked on as the tractor of the future,IH had Grandpa's tractor image.

[b:c7c9903caa]I've run about every brand of tractor around and have never been on an IH tractor I really like to drive.[/b:c7c9903caa]
Click to expand...



The bolded is how I feel about IH too. Absolutely nothing felt comfortable or easy to operate.

The rest of your post sounds very reasonable too but I don't have knowledge in those areas so can't offer an opinion there.
 
I'm the opposite, I love the Cadillac ride on my mom's 1950 Farmall C. Use it to mow 3 acres in the south end of county.
 
Lot of things went wrong but most of it goes into poor management. Most manufacturers want to have 90 days minimum cash on hand for materials to make whatever it is they make. Some like even more. So most of industry likes about a 5-7% NET profit. IH's target was 2% to give investors a better return on their investment. Then add in things like staying with the TA instead of going with a power shift. The poor hydraulics mentioned by others. There was more than one reason people started buying other brands.

Rick
 
This was one of the many nails in the IH coffin---Tee
cvphoto43204.jpg
 
Yep; Father-in-Law got out of Trade School and went to work for IH in Perry, Iowa. Had a house full of IH products-Refrigerator, freezer, window A.C., etc. Saw the 'writing on the Wall' in '72, the year I met his Daughter, now my Wife. After 17 years he went to work at the Deere Dealership and his former employer had no hard feelings. Senior employee until he passed at what is now Iowa's largest Deere Dealer.
 
IH corporate had a drastic school bus recall for chassis bolts that were designed to be grade 8 but got changed by production engineering on the floor to grade 5. Affecting every Loadstar bus chassis from about 75 to 78 (not sure on the earliest date). very costly 4.2 hr recall. Trucks were being made from assorted suppliers and if the line setting ticket was missing from the glove box, fixing became a parts hunt. I also believe errors were made not putting angular sheet metal on the SMTA, and going to direct start diesels in that tractor. The disk brakes worthless unless maintained every year. Reputation is easier to loose than gain. Just additional opinion on top of the cash flow issues mentioned below. Jim
 
Short simple answer is they got too big and too sloppy. Each division needed/expected the other to show profit. The few that were holding their own couldnt offset the loses from the rest of the group. History shows that most companies that get to big cant keep an eye on costs and fail. Al
 
Actually, they had fairly modern products by 1981. IH had the early riser planter and axial flow combine by then. The problem was JD still had better products in concept even though not necessarily superior. The Max-Emerge planters were simple to understand and service. The Cyclo concept while simple in principle was more of a devil in terms of maintenance that most farmers wanted no part of. The Axial Flow combine while giving a very good grain samples and more flexibility in terms of harvest conditions did not produce a high quality straw sample. Most farmers in those days made straw so they did the obvious in that they bought a machine that was as good in harvest and straw quality as they were used as they would only have one combine due to financial constraint. Axial Flow combines would have commanded the market otherwise but guys who had no brand preference bought JD Titan or AC Gleaner combines. A lot of JD 6620's got sold around here during the late 1970's and early 1980's until the grain embargo was strongly felt.
 
Dr, considering that: " A Corporate Tragedy " by Barbara Marsh asks $297.99 for the book, it will likely have a similar demise. gm
 
The fast hitch system really was not a factor in my mind in terms of IH's problems. HP was already at a point in the mid-1950's where 3pt implements were not very practical or just not a factor at all such as with a disk harrow or forage harvester. Guys who bought N series Fords seemed to either close off from the world or just jumped away from the original builder of 3pt tractors as their operations grew. IH perhaps had the strongest dealer network during the 1950's of the major manufacturers. By the 1960's the 3 pt argument was moot as IH had 3pt tractors and relevant equipment as did JD and the other late comers. The advantage of the 3pt hitch was strongest during the first 10-12 years that it was on the market.
 
By the 1980's IH for the most part had caught up to their competition in terms of product development. The biggest problem is in getting there they left a lot of money on the market where they were not a leader in terms of an implement. The tractors while not leaders were passable. A fair amount of products even if they were passable design wise were unremarkable in terms of operation and performance, durability, or serviceability. The IH dealer network camouflaged a lot of the shortcomings with readily available parts and service. In a few instances a dated product offered a price advantage such as with the 56 planter well after JD's Max Emerge hit the market. Guys like my father who were very price minded would have bought a 56 during the late 1970's if they were in the market for a planter.
 
Lets not forget the corn head that they allegedly copied off of Deere. Cost IH big bucks.
 
Another thing that a lot of folks miss is that for the last several years they were being made the personal vehicles (Scout, Pickup and Travelall) failed to make a profit at all yet instead of stopping production they kept right on going.

And look at it. Case offered a partial power shift from 1970 one. AC From 75 on. JD way earlier than that. Heck in 1970 a Case 970 had 16 GPM hydraulic flow. Plain fact is IH failed to keep up. When the 86 series came out in 1976 it still had the TA. They didn't go to a partial power shift until 81. Not hard for an decent AC or Case sales rep to convince someone that IH is far outdated.

As far as the hitch system? Lot of guys were using 3 point cultivators and semi mount plows through the 60's and well into the 70's. So the hitch argument was valid. Gotta remember that was before chisel plows or no-till really were anything. Lot of 3-16 3 point and 4-5-6-7 semi mount 14-16-18 plows still around this area. So yea the Fast Hitch hurt them. Farmers in the 50's and 60's when the fast hitch was produced remembered the depression. Older implements had to work with a new tractor. And most were pretty independent minded. No one was going to tell them they could only use one brand of implement. Same thing happened with the Snap Coupler and Eagle Hitch systems too.

Rick
 
The TA is a form of partial power shift as is JD's Quad Range. JD also offered a full Power Shift from 1964 onward. IH was a stable company to outsiders so IH could
claim that when the AC, Case, Oliver, etc. salesman got started on what they felt were wrong with IH the IH salesman could respond with IH being stable, good engine
power and many speed selections among other strong points. The fast hitch flat out was not a detriment to IH. Frame mounted cultivators were widely accepted until IH
came out with the 06 series at which point IH had an integral 3pt hitch.
 
(quoted from post at 07:10:14 11/29/19) Obsolete technology, bloated management and labor issues.
Click to expand...
Being in highway construction for 50 years and no time in agriculture I can only speak to the yellow stuff.
Our company s first crawler was a td 9 with a drott 4 in 1 loader. I believe the boss went that way to get the drott system. I m not saying it wasn t available with a different mfg but was available. After wearing it diamonds off the floorboards it was traded on a 175. Our work went from site to highway so the fleet started to grow.
Fast forward 15 years and many cats and internationals through our hands the company opinions were,
International equipment ran circles around cat in production
Hough 90 loaders were easily 20 percent faster loading
Td 15c and 25c had tremendous power and balance
They were easily 30 percent more productive than the cats

Now the downside
After 5000 hrs you had to look to swap
All drive line components will need to be swapped
I think the power just beat the daylights out of trannys and diffs/finals
International used hoses to move hydraulic and coolants everywhere when cat was in steel until the hose was mandatory so maintenance was problematic.

We felt the short life and maintainence problems were more than offset by the production over all the others.

As to the original question
They were ahead of the curve in the 60s and 70s
Their designers ahead of that time had their sh t together
Cat finally started looking at power,handling and balance about the time the international engineers started falling asleep

As for our company the best that could have happened did.
Komatsu took I H design and did what they do and improved the sh t out of it and we kept ahead in machine productivity on the job sites.

Now it is cat dozers on the big side and komatsu from d 51 down
Komatsu on all other ground engaging equipment.
In a sense I guess we are still IH guys

International just didn t move in the late seventies like the other guys did
 
I can tell you this on the farming side. The TD-18A would out
pull cat D7 of equal age. However the under carriage on the
IH wore out a lot faster. So either IH steel didn?t have the
hardness of Cat or just wasn?t built as strong.
 
(quoted from post at 16:02:02 11/29/19) The TA is a form of partial power shift as is JD's Quad Range. JD also offered a full Power Shift from 1964 onward. IH was a stable company to outsiders so IH could
claim that when the AC, Case, Oliver, etc. salesman got started on what they felt were wrong with IH the IH salesman could respond with IH being stable, good engine
power and many speed selections among other strong points. The fast hitch flat out was not a detriment to IH. Frame mounted cultivators were widely accepted until IH
came out with the 06 series at which point IH had an integral 3pt hitch.
Click to expand...

Really? Was an awful lot of fast hitch cultivators (mostly converted JD units) around here. Wonder why that was if so many guys were using frame mounted ones???? And I knew more than one guy back in the day that wouldn't look at an IH tractor cause of the Fast Hitch long after the Fast Hitch died. I don't hate IH. In fact I have a 706 and 1206 here that I use. I'm just being honest about it.

One thing you always heard about the TA too when one was being sold. It was either going out, out, or new. What a joke. And like the AC power director it was a high/low. Not a power shift, just a hi/low.

At one time IH was an innovative leader. But when the chips were down management let investor payouts get in front of R&D.

Rick
 
No it was a Power Shift with a neutral and it actually was the best one in their day not like the TA junk in IH tractors and the big plus was it held back in low range big
asset in hilly terrain like in my area.
 
Not sure what you are trying to say. Frame mounted cultivators were predominant around here during the 1950's. Had to look real hard to find a rear mount. If a guy
had fast hitch tools and traded off say an IH 400 for a 2510 JD most of the time the farmer spent a few hours with the torch and welder and converted the implement to
3pt operation. Cut the tongs short and burn holes for the lower lift arm pins then build a mast for the top link complete with bracing. But as I said before by the mid-
1950's 3pt implements were already waning. Nobody was trying to use a 15ft 3pt disk on a 730 JD tractor. Nearly all implements if not fully integral were drawbar pulled
for tractors above 30 HP which was an increasing share of the market. OK, you have a 706 and 1206 but are running down the TA? The neighbor had a few TA equipped
IH's and they were not in the shop all that frequently never mind for TA repair. For the mechanical TA's if you read the book a farmer would realize that there is periodic
service to keep the TA in good working order. Yes, eventually they needed repair but then so did the Oliver over-under and down the line. Back to the fast hitch if a
farmer did the reverse and already had 3pt implements and bought a fast hitch equipped IH tractor he either built an adapter or went to Central Tractor and bought an
adapter for 40 dollars. The fast hitch certainly did not do IH in.
 
in the early 80s I worked in a rock quarry my boss told me ih got themselves in trouble for lots of years ih was happy to pay just the interest on there bank notes. then when interest stated going up now the banker said we need some money on these notes.
well we know what happen there all of a sudden money got tight,
IH wasn't the only ones caught in cross hairs as many business and farmers went down the drain.
 
IH was also very late getting a quiet cab tractor on the market (under 85 dB). Case set the bar in 1970. Deere, MF, and AC followed quickly in 1972 and 1973, but IH waited until 1976. In the 1973 and 1974 farmers were expanding fast and were flush with money buying up land and machinery at high prices. Many low hour tractors were being traded in early, some for more power and some just to get a better cab. By 1975 high oil prices triggered stag/flation and interest rates climbed.

I think IH sales and marketing didn't see the trend soon enough and missed a great opportunity.

Deere also offered easier financing than most other manufacturers, a sales tool that had previously sold a lot of equipment of all colors in the latter 1800's.
 
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