[Farmall] Red Tractors 1958-2013

[Howard Pletcher]

For most of us, the crisis and breakup of IH appeared to pop up quickly
after the 1980 strike as that's when it surfaced. I recently read an
interview with Brooks McCormick in an IH Action newsletter from 1977 that
sheds some light on the situation as he saw it.


“Six years ago (1971) we realized that our earnings, which were dreadfully
low as a percentage of sales, had to be enriched….. In 1976, we exceeded a
three percent return on sales—not good as measured by other
corporations—but a significant improvement if you look at the last 10 years.

“Our present management team took office on November 1, 1971, following
five years of increasing sales and decreasing profits.  Our incoming team
realized that something had to be done or there would be nothing left to
preside over.”


This led to the reorganization of the company from the old divisional
structure to product groups with different responsibilities in 1977 and the
hiring of Archie McArdle as president.  I am in no way defending McArdle,
but I view it as his becoming the captain of a ship that was already
sinking and he was not able to save it as opposed to his being the villain
that brought about the downfall as some view it.


Keep in mind too, that the company was so big that what happened in the Ag
Division did not in itself control the destiny of the company.  As I
recall, Ag and Truck each contributed 35-40% to the profits of IH, with
Construction Equipment, Steel, and other operations making up the
remainder.  What happened with the tractors in the 1950s certainly didn’t
help, but that the company’s financial problems went much deeper than that.