Vital Equipment

Privately owned specialised equipment manufacturers face a range of different challenges from their larger counterparts – including legislative and financial obstacles. Bob Schnell, Executive Vice President of the Farm Equipment Manufacturers Association, reveals how his organisation is fighting to win a fair deal for its members.

NGA. What services does the Farm Equipment Manufacturers Association (FEMA) provide to its members?

Bob Schnell. Primarily we are a communications organisation for specialised manufacturers of farm machinery and not for large tractor manufacturers. We provide various services such as legal assistance and communications via a twice-monthly newsletter. We organise a couple of conventions and provide low cost transportation services, that kind of stuff.
We do not include the large tractor companies among our members.

NGA. Describe the types of companies that are members of your organisation and how the issues they face are different from those of larger manufacturers?

BS. They are specialised companies that manufacture all sorts of pieces of equipment. They've got over 2000 pieces of equipment that they manufacture and that includes virtually everything with the exception of certain types of tractor equipment. These types of companies face different types of challenges from the larger publicly owned They have different problems they are smaller and generally privately owned.
They simply do not have the individual muscle of large tractor companies particularly in legislative areas. They do not have the intelligence gathering ability. They do not have the large staff.
They are governed by similar legislation but it affects them in different ways.

NGA.What legislation challenges do specialised equipment manufacturers currently face?

BS. One area in particular we're very active in now is state legislative initiatives in dealer contract laws.
These laws affect specialised manufacturers considerably differently from they affect the large tractor companies.
There are several states that have dealer buy back laws. If a dealer is not happy with or cannot sell equipment on a dealer's lot, the manufacturers are forced to buy back this material. We think this is particularly unfair.
For a large tractor manufacturer, usually what that company has to buy back is a relatively minor expense for a large tractor company. It's not, however, for a smaller company.
Right now we have lobbies in about four states right now that are particularly active in trying to pass these dealer contract laws (that would change this practice). We are doing this on behalf of all smaller manufacturers that are members of the associations.
There are a lot of regulatory and legislative issues even at the federal level that affect smaller manufactuers. They simply do not have the financial ability to fight these legislative initiatives on their own.

NGA.How are specialised farm equipment manufactures affected by the economic downturn in the US?

BS. Right now it's up in the air. We really don't know. Last year was a really good year for them. This coming year, with the prices of commodities going down, we just don't know what the effect is going to be. A particular area of concern is the availability of credit.
We're not into the year yet but they might have a more difficult time getting equipment into dealers. Most don't have their own finance companies. With a couple of the larger firms that do wholesale financing pulling out of the market, they might have a very difficult time.

NGA. Has there been a drop in demand for equipment from dealers?

BS. Not so far there hasn't been. Usually the equipment is not generally as expensive as some of the larger pieces of equipment like large tractors. So in that respect it's usually a little bit easier for a farmer to purchase specialised equipment.
I think haying equipment is particularly good right now. I can't tell you anything more about specific piece of equipment because I don't know.
Probably one of the biggest for equipment manufactuers in the economic downturn is the issue of availability of credit. That's without question an issue they are facing.

NGA. FEMA has recently set up an online warranty claims and registration system. What is the benefit of the system for equipment manufacturers?

BS.Using this system, the internet warranty claims and registration system, dealers and manufacturers can process claims and register equipment for warranty over the internet.
The system is just getting started right now. In setting up warranty claims it will eliminate a lot of paperwork that the dealers have to file. Most manufacturers have different warranty policies and different warranties.And a dealer has to maintain separate manuals and books for all these manufactures. If they are handling say 15 to 20 manufacturers they have a difficult time handling all these different warranties.
By placing this information on a link to this internet programme dealers can instantly access this information instead of having to read through reams of books. Also it will make registration for equipment easier.
One of the issues in the industry is that very few pieces of equipment are registered when they are purchased. This will give the dealer the chance to actually register the equipment rather than relying on the purchaser to do so.
It is also particularly helpful for manufactures of equipment that is particularly technologically complex which they want to fix themselves under warranty agreements. In other words they don't want the dealers touching it. Some companies for instance make very technologically advanced equipment using GPS and they don't want the dealers repairing it. They will have a warranty policy that simply says equipment that equipment that fails under a warranty will be shipped back to the manufacturer.
The system is open to all dealers and manufacturers whether they are members of our group or not.

NGA.What other new projects is FEMA currently involved in?

BS.We have recently joined up with the Association of Equipment Manufacturers (AEM) which represent the larger equipment manufacturers.We've signed a contract with them to sponsor a new international farm machinery show in the US called Ag Connect Expo.
This will take place in Orlando, Florida in January 2010.
The US has not had this type of show before and it's similar to the type of event that takes place in Europe.
This is an effort to get a show similar to that where we have all parts of the industry getting together and all organisations and all the experts agricultural equipment in one place in one time and Orland florida seemed to be a venue that Europeans go to and we hope that farm and ranch customer sfrom all over the world attend this show. It will be first time that a show like this will ever have been sponsored in the US. We are endorsing it and AEM is probably the lead sponsor of the show but we are certainly a partner with them on this show.

Box out one: The history of FEMA:

In 1950 a group of manufacturers who were in Chicago to visit with their distributors decided they had some things in common - that none of them were major companies and each was meeting a specialised need within the burgeoning farm equipment market.
They recognised the need for a common voice that could connect them with one another and represent their interests. That same year The Farm Equipment Manufacturers Association was founded with 46 member companies.
The Association is headquartered in St. Louis, Missouri with its own staff of full-time professionals led by Executive Vice President Bob Schnell.
While many things have changed since 1950 however the association remains committed to meeting the ever-changing needs of its members. Today over 600 member companies enjoy the wide variety of services offered by the Association - from large multi-nationals to the smallest family owned and operated business
Box out two: Forthcoming FEMA meetings:

Below are the current dates under contract for FEMA's Fall Convention and Spring Management Clinics. Because the program for these meeting is still in the long range planning stage, changes in start and ending dates could occur.
2009 April 2-4 Pointe Hilton Tapatio Cliffs Resort - Phoenix, AZ
2009 November 4 - 7 Atlanta Marriott Marquis - Atlanta, GA
2010 April 8-10 Intercontinental Kansas City - Kansas City, MO
2010 November 3-6 Hyatt Regency at Reunion - Dallas, TX