So often, new machines are evolutionary developments of, or updates to, existing machines. The very first step in the process, according to the company, was to go out and listen to customers — chatting to them around the kitchen table or up in the cab of their existing machines.
Where possible, compare Massey's strategy with those of its leading competitors.
What went wrong after and; how did Massey respond? How did its competitors respond? What were the consequences for Massey? As a financial adviser to Massey's management, assess the various alternatives at the current stage of Massey's difficulties. What options are available for alleviating Massey's financial problems?
Loss of competitive position. Massey located its production facilities in developed countries such as Canada and the UK.
While Deere and IH focussed on large tractors, Massey pioneered new markets for its small tractors in developing countries and avoided North America. BeforeMassey was successful because a it focussed on the future growth markets in its industry, b Massey had little or no competition in these markets, and c it diversified against political and other risks.
It had fragmented, disorganized lending groups that would make future refinancing difficult. Massey chose an aggressive financial policy and an aggressive risky product-market strategy. It operated in a cyclical industry and pursued a risky strategy within that industry. Massey could have issued equity instead of debt in good times, even if this would have lowered payoffs to shareholders such as Argus.
High rates reduce sales AND raise mfg.
Massey fought back with a major retrenchment program in but the problem continued. What was eating Cash? Accounts Receivables and Interest Expense.
Massey financed its receivables with Short-term debt!
See exhibits 2 and 6. Why did Massey finance with short-term debt?
It had NO choice. Exhibit 9 shows that the stock price fell a lot, lenders were unwilling to lend long-term debt.
Massey had a high debt ratio, disorganized lending groups, and restrictive bond covenants. IH had problems with a labor strike and with a drop in North American demand. Deere spent money to add capacity and to finance and support weak dealers. Deere financed this expansion mostly through debt as it had sufficient financial flexibility.
The Japanese and Koreans also saw opportunity in this adversity and entered these markets. To counteract, init issued new equity and reduced its debt. Unlikely to get a merger offer because of the large debt load.
Receivables are owed by weak customers and its assets are spread over 30 countries with lenders, so huge liquidation costs 3. Refinancing is the ONLY solution! The firm has to cut back production and cut marketing expenses.
Interest payments must be suspended and debt maturities extended. Convert debt into equity. These numbers are underestimates because of the lost jobs in related industries and tax revenues lost.
InMassey, after length negotiations, exchanged short-term and medium term debt for long-term debt and preferred stock. Almost no interest payments and principal payments were to be made on this debt for 5 years.
In exchange, Massey agreed to retain 6, Canadian employees. Massey continued to lose money over the next 3 years and had subsequent refinancings in and America and its Perkins diesel business.
Varity returned to profitability in and bought Fruehauf Corp. InIH sold its farm equipment business to Tenneco and changed its name to Navistar.
John Deere moved heavily into Europe and diversified into lawn tractors and industrial machinery. It was not until that it capitalized on its market share gains and cost reductions.Benefits of Massey Ferguson MF Tractor Full Service Repair Manual. It is convenient as you get faster downloading of books in a couple of clicks.
-You will be able to . Massey Ferguson is investigating a tong term improvement. In , Massey Ferguson ’s will have fanning mill dividers that improve air distribution to the shoe.
Some of the problems will require calculations, while some will be conceptual questions. This is a closed-book exam. Class Participation. I will actively grade your participation and conduct.
Massey-Ferguson Ltd Case 2. Financing and Valuation Chapter Week 9: Payout Policy Chapter Week Issuing Securities Chapter Massey Ferguson was formed in Ontario, Canada in when agricultural equipment giant Massey-Harris Co. merged with three-point hitch inventors, the Ferguson Company.
I have a Massey and am having hydralic problems. When Customer Question. I have a Massey I have a Massey and am having hydralic problems. When you first start it the remotes and the loader work until you try to pick up a round bale on the loader or grab a bale with the unroller on the 3 point.
I have a Massey-Ferguson. Nov 06, · Is any one familiar with mid 80 s era Massey Ferguson excavators? Any back ground or info would be helpful. the one I encountered was about worn out and would loose a track if you slammed the cab door Ford-Ferguson, Ferguson, Massey Harris Ferguson, Massey Ferguson Industrial, and Massey Ferguson tractors and .