Farm machinery gets political

AGCO chief Martin Richenhagen fields unusual questions at a corporate press conference in Germany

Suddenly the discussion became political, turning AGCO’s Fendt-brand press conference during last November’s Agritechnica machinery show in Hanover, Germany, into one of the most unique I can remember attending.

Standing on stage with a German journalist who was acting as event host, AGCO CEO and president Martin Richenhagen eventually found himself talking about larger political and moral considerations around the Syrian refugee crisis and the need to address world hunger.

Martin Richenhagen and a German emcee shared the stage during an AGCO press conference in Hanover, Germany, in November.

Martin Richenhagen and a German emcee shared the stage during an AGCO press conference in Hanover, Germany, in November.
photo: Scott Garvey

Granted, the influx of Syrians was a major concern in Europe at the time, but no one I spoke to expected it to come up as a topic in a press conference intended to launch new tractors and to discuss corporate affairs.

But maybe we shouldn’t be surprised, Richenhagen is one of the most unusual CEOs in the industry, despite his assertions to the contrary at the same press conference.

“I think I’m a very normal, average manager,” Richenhagen said, speaking in German. “I try to keep things simple and walk the talk.”

Yet when the journalist emceeing the event asked, “What are your weak points?” Richenhagen’s initial response suggested he isn’t so average after all.

“My hair,” he said to a round of laughter from the 300 or so journalists in the room. “I’d like Donald Trump’s hairdo.”

Then he followed up with a more serious response.

“Well, what are my weak points?” he mused. “Sometimes I’m a bit too open, and maybe I crack a joke where it’s not really suitable. But I don’t really want to change. That’s my personality. I don’t want to be a very reserved or distant person or manager. I want to be a straight-up guy.

“I recently met some farmers who I studied with during my student years and they said you haven’t really changed much. But I am a little heavier.

“I try to be authentic. Somehow, it’s not difficult for me. I am what I am. That’s what you’ll have to accept for a few years yet. The supervisory board would like me to continue (as CEO) until 2020. I accepted, so my sales partners and customers will have to live with me for a while.”

I’ve been to many events and press conferences over the years where Richenhagen has spoken. I’ve even interviewed him a couple of times. This kind of casual monologue has become his trademark, putting everyone at ease.

Conversely, some CEOs and senior corporate executives seem to strike fear into the hearts of their lieutenants. I can remember one occasion where an executive walked into the room at a press event in a way that was a little reminiscent of that scene in Star Wars when Darth Vader strides out of his space ship as nervous Empire officers scramble to accommodate him.

Although his position commands respect, I’ve never seen that kind of thing happen around Richenhagen.

The intent of the AGCO press conference at Agritechnica was to discuss what’s new with its Germany-based Fendt brand. The big announcement for European editors was that Richenhagen intends to make it a full-liner brand which, along with Massey Ferguson and Challenger, would make it the third such line for AGCO. Fendt dominates the German market, but so far hasn’t threatened to take North America by storm, although some of the high-end features common to that brand have been engineered into AGCO’s other machinery marquees.

Martin Richenhagen fields reporters’ questions during the 2012 grand opening of Fendt’s Marktoberdorf, Germany tractor assembly plant.

Martin Richenhagen fields reporters’ questions during the 2012 grand opening of Fendt’s Marktoberdorf, Germany tractor assembly plant.
photo: AGCO

Richenhagen revealed this integration is about to ramp up still further. Early in 2016, the rigid-frame 1000 Series, 500-horsepower Fendt tractor that the company debuted in Germany last year will be integrated into the Challenger product line in North America. That was the big take-away for North American editors.

“The Fendt 1000 will be launched in North America in 2016,” Richenhagen said. “In North America, the Fendt 1000 will be yellow and green. We have a loyal green customer base, mainly in Canada and Pennsylvania. We also have very strong Caterpillar dealers who want to have that product in yellow, Challenger branded. It might say ‘made by Fendt’ or ‘engineered by Fendt’ or something like that.”

“What you should know is the Fendt 1000 was designed for the North American market from the very beginning,” added Rob Smith, one of Richenhagen’s senior executives who briefly shared the stage with him. “From 2007 and 2008 on, the concept was to be extended to North America.”

When the floor was opened up for questions, Richenhagen was asked by a British journalist how many full-liner brands farmers of the world can support.

In typical fashion Richenhagen didn’t flinch, throwing out what sounded like an honest response, this time in English.

“In the past, in the ’50s in Germany, we had almost 200 independent tractor brands,” he said. “And they were supported by the small country of Germany, before reunification, when we had only 50 to 60 million people.”

“In the world, we basically have only three global full-liners. Global means full-liners being present on all continents including Africa, including South America, and they are CNH, John Deere and AGCO. I think this is pretty OK. I think there is space for one, two, three more. So I wouldn’t exclude the smaller players, especially the mid-size Europeans, from becoming more global players. Or the new guys coming from Asia who want to enter Europe and work on broadening their line.”

“So I think this is all in the (best) interests of the farmer, because competition makes sure that we do our homework properly, and that product development is the focus of most of the companies.”

Richenhagen’s emcee then took a forward-looking approach and asked him, “Where do you see AGCO 25 years from now?”

“I think we will be a world market leader, although we don’t know in which segments yet,” he responded. “I would like to be the (overall) world market leader, with the resulting (profit) margin. Our chances are good for organic growth and market growth, because we have some competitors that aren’t doing their job very well.”

“Is AGCO planning any more corporate purchases?” the emcee pressed him further.

“We know there are some companies that are for sale, for example Antonio Carraro in Italy, or some others that are already insolvent in Germany,” he replied. “We have to look closely to see if there is a pearl out there that’s yet to be discovered. There may be some possibilities for the coming year, but I can’t say more.”

As mentioned earlier, after discussing his corporate news, Richenhagen found himself delving into political matters, particularly the Syrian refugee crisis. Needless to say, that kind of discussion at a machinery press conference is rare.

“I think Germany has so far done something quite positive,” he said. “We are starting a new millenium by not destroying something, instead doing something positive. That’s good for Germany, and it’s something we didn’t do in the previous centuries. Other countries, America for example, are impressed with how we’ve acted.”

“I’d change the laws in Germany and allow asylum seekers to go to work immediately,” he added. “We’d like to employ them and send their children to school as soon as possible.”

In fact, the brand has already hired a small handful and is housing about 100 at company facilities in Germany.

“Today we have about 100 asylum seekers who live here, and we offered to accept 400 more because we have the space,” he said. “In the past we received rent payment from the community, but I said this is not ethical. We have to do without it. We are providing the accommodation for free. We have a football (soccer) field at our facility and we offered it as well, because it’s better that children play football than just hang around.”

Actually, Richenhagen has been publicly discussing global inequality and world hunger for a long time, and he has created initiatives like the anual AGCO Africa Summit in Berlin, which aims to help facilitate positive change on that continent. I can remember asking him at a 2012 press conference in Minnesota why he wanted to help develop agriculture in Africa.

“I’m glad you asked him that,” one of the company’s PR agents told me quietly after the event wrapped up, explaining it was personally important to him.

“We have to do something more and ask why this situation has come about,” Richenhagen told the crowd in Hanover in November, delving further into the topic of inequality. “We have a very fast-growing world population and we have to make sure that all children are fed suitably and have access to school.”

“A billion people in the world are suffering from hunger, and we have to do something about it.”

This article was originally published as “Going political” in the February 16, 2016 issue of Country Guide

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