New Factory Makes a Statement

Sometimes a factory is more than a factory. That’s the case with the new Fendt factory in Marktoberdorf, Germany, which opened this fall with much ceremony. The prime minister of Bavaria was there, as were visitors from 30 countries. There were speeches, entertainment and even an interreligious blessing by a Protestant clergyman, a Catholic priest and two Muslim clerics. All in all, a very impressive, very German affair.

Why the big deal? Besides making high-tech tractors, the plant is a symbol of the 22-year-old AGCO’s prosperity and aggressiveness. Along with other recently built facilities, it is brick-and-mortar proof the company has arrived. This summer, when AGCO opened the Intivity Center—a visitors’ center and company showcase in Jackson, Minn.—Brand Marketing Manager for North America Phil Jones told journalists: “AGCO has been kind of an adolescent [in the farm machinery business]. But we are growing and maturing.” The Intivity Center, he said, is
“a rich opportunity to positively position AGCO.”

The same is true with the Fendt factory in Marktoberdorf.

When AGCO CEO Martin 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 per 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 says.

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 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 said at the grand opening.

As the first official tractor rolled onto a red carpet and out of the factory (it had been in operation for weeks previously), trumpets blared, kids on toy tractors (Fendt, of course) pedaled around it, and the priest sprinkled holy water.

It was a grand opening that made a statement. �

(BS)

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