The History of John Deere
John Deere was born into a poverty stricken family in Vermont in 1804 more than two hundred years ago. Today, his name and the company that he started are one of the most recognized names in the business world; however, his beginnings were much less auspicious. After completing a limited common school education, Deere finished a four year blacksmithing apprenticeship. He became known as a quality blacksmith and was respected for his workmanship and ingenuity. Deere's carefully polished hay forks and shovels were highly sought after by his devoted customer base.
During this time business in Vermont was deteriorating, so in order to survive Deere moved his family and his business out west to Illinois. When he arrived in the village of Grand Detour, Illinois, his blacksmithing skills were immediately put to use. But he quickly learned that the plows used back in Vermont were less efficient in the Midwest because the soil was heavier and clung to the plow.
In 1837, his newly designed polished steel plow became the answer to the villager’s problems—dirt didn’t cling to the slick surface. Ten years after introducing the new plow, production reached 1,000 plows per year.
One of Deere’s early business partners criticized his continuous design changes, arguing that they were not needed because farmers would purchase what was available. It is said that Deere replied, “They haven’t got to take what we make and somebody else will beat us, and we will lose our trade.” This became the foundation for Deere & Company’s emphasis on product development and improvement.
In 1863, Deere introduced the Hawkeye Riding Cultivator. It was the first farm implement that an operator could ride. Other early farm implements included a variety of steel plows, cultivators, corn and cotton planters, harrows and wagons and buggies.
While still in the embryonic stages of the business, Deere did what was necessary to stay afloat. When the bicycle craze swept the country in 1894, Deere & Company responded with a few different models of bikes. When the fad fizzled, so did the production of bicycles.
With its incorporation as Deere & Company in 1868, company leaders adapted manufacturing processes and products to compensate for economic trends and changing consumer preferences. This responsiveness to the consumer helped the company thrive.
As early as 1903, Deere & Company enacted environmental controls within their manufacturing plants. Plow factory superintendent George Mixter convinced the company to install environmental controls in the grinding room. That same keen sensitivity to environmentalism has been carried into the 21st century, and to this day, manufacturing and purchasing decisions are made with environmental principles in mind.
Most people think of John Deere as a tractor manufacturer, but it was not until 1918, under the direction of Deere & Company’s third president, that the company purchased Waterloo Gasoline Traction Engine Company, Waterloo, Iowa. With this acquisition, the manufacturing of tractors became an integral aspect of the company’s product line.
The Model “D” was the first two cylinder Waterloo tractor with the John Deere name on it, and it remained in the line for 30 years. Nearly 10 years later, Deere & Company developed the General Purpose (GP) tractor. The GP Wide Tread, the first tricycle-tire tractor by John Deere, entered the market in 1929. That was the year the stock market crashed. As the Great Depression raged on, people were struggling to make ends meet. Farmers who had purchased equipment from the company could not meet their obligations. Despite a loss in revenue, Deere & Company extended its financing options and delayed payments. This gesture both endeared John Deere to its customers and developed a loyalty to the brand that has been handed down from generation to generation.
By 1935, Deere, then firmly known for its wheeled tractors, and Caterpillar, known for its track equipment, joined forces and sold each other’s products for a short time. The agreement lasted into the mid-1960s, when the two companies went their own ways.
With the outbreak of World War II, manufacturing companies were asked to join the war effort. John Deere was no exception—the company made tractors, aircraft parts, ammunition, etc.
After the war, Deere & Company had to ramp up for civilian demand. It reverted back to its core business, and was the first manufacturer to introduce a diesel-powered tractor. Known as the Model 70, it was the largest row crop tractor of the time. By the 1950s and 1960s, widespread migration from farms and cities to the suburbs sparked interest among homeowners to cultivate turf around their properties. This interest in manicured lawns was not lost on Deere & Company. To meet the demand, the first John Deere lawn tractor (Model 110) was manufactured in 1963.
These lawn and garden tractors were designed for use with attachments such as mower decks and snow blowers. It wasn’t long after the introduction of the lawn and garden tractors that the company began to look at entering the golf market. After all, the lawn tractors already had cutting decks. By 1987, the company took the next step in turf maintenance and offered a John Deere mower to the golf course market. Only four years later, with a firm commitment to the turf market, Deere & Company created the Worldwide Commercial & Consumer Equipment Division, which joined the other three divisions: Worldwide Construction and Forestry, Worldwide Agricultural Equipment and John Deere Credit Worldwide segments. After Worldwide C&CE was created, it grew rapidly due to its continued commitment to quality. John Deere was once quoted as saying, “I will never put my name on a product that does not have in it the best that is in me,” and that ethic carried through with the new division.
“In most John Deere equipment facilities, you will see that quote somewhere,” said Gregg Breningmeyer, director, commercial segment marketing and sales. “Quality, integrity and innovation are the pillars of what the brand symbolizes.” Whether it related to a customer support issue or a design and manufacturing role, the company always prided itself on providing best-in-class support.
But they didn’t stop there. In order to achieve the perception of a core stock holding, the company needed to diversify. This included continued growth on the agricultural side, but also included additional avenues of expansion. The foundation of John Deere was deeply entrenched in the agricultural business, but the agricultural business had always been cyclical. When ag was strong, John Deere was strong; conversely, when ag was down, John Deere also was down.
So the company turned a critical eye on itself, carefully analyzing each division. Construction and Agricultural Equipment were strong; however, the market was already saturated with competitors. Then the company took a long look at the green industry. “No one had a preeminent position within the industry,” said Dave Werning, president of John Deere Landscapes and senior vice president of the Commercial & Consumer Equipment Division. “The C&CE division participated in roughly 15% of the whole green industry, representing the power equipment segment.”
Given the groundwork established with the professional maintenance customer through equipment sales, the company realized that it was serving only part of the market. The executive board members decided that this market was ready for another competitor. They saw the future . . . a total-solutions provider for the landscape contractor. John Deere Landscapes was born. Lawn-and-garden equipment sales quickly topped $1 billion for the first time in 1993. Growth continued throughout the 1990s as Deere & Company acquired Homelite, a producer of handheld outdoor power equipment, and released four mid-priced lawn tractors and two walk-behind mowers branded “Sabre by John Deere.” These were designed for sale through national retailers and John Deere dealers.
In January 2001, McGinnis Farms, a distribution company specializing in nursery, irrigation and limited landscape supplies, was the first to be purchased for the company’s newest enterprise. McGinnis Farms had a presence in the southeastern portion of the U.S. and brought with it 50 locations. But it wasn’t until October 2001, with the purchase of Century RainAid, an irrigation distributor with multiple branches primarily in the eastern portion of the United States, that John Deere Landscapes officially entered the irrigation industry.
To add to its customer base, John Deere Landscapes, in 2005, acquired United Green Mark, an irrigation distribution company located on the West Coast. The goal behind the acquisition was to gain more locations, specifically in the west.
Two more years passed before LESCO was purchased in 2007. This added an additional 350 locations to the John Deere Landscapes map. Today, the number of locations nationwide and in Canada totals nearly 650, with a full integration of management and computer systems to be complete by Spring 2008. “(We are) transitioning the face of the buildings from LESCO to John Deere Landscapes, but will maintain the respected LESCO brand name on products,” Werning said.
With the purchase of the LESCO Service Center also came the purchase of the Stores-On-Wheels (SOWs) program. The SOWs, which travel from golf course to golf course, provide technical turf care knowledge and supplies onsite. When melded with Deere’s One Source, which was created several years ago to provide equipment, irrigation and turf supplies to golf course superintendents, the SOWs will provide even greater opportunities. “We can shift ourselves from being an equipment supplier to a solutions provider,” Breningmeyer added.
In addition to the merging of turf products, the equipment side of the two companies will take on a new form as well. Earlier in the year, LESCO customers were notified that the equipment and service aspects were no longer going to be located within the stores but would instead transition over to service provided by select local John Deere equipment dealers who had commitments to high levels of customer service. The model, called the Dealers of Tomorrow (DOTs), has aligned local dealerships with four, five or six locations within a local area to work with customers who have previously serviced their equipment at LESCO stores.
Even though John Deere Landscapes is strictly a distribution entity rather than manufacturing entity, the standards of excellence that the company has always worked from are still expected. “For John Deere Landscapes, it is John Deere putting his name on the building,” explained Werning. “It is a promise of service to the customer that does business with us.”
The promise of customer service extends far beyond sales and delivery. “We call this our Business Solutions,” Werning explained. “An example of a business solution is our assistance with contractors’ cell phone costs.” After legislation passed allowing cell phone users to take their numbers from one carrier to the next, John Deere Landscapes consolidated all company cell phones to one national carrier, Nextel. Then JDL went to Nextel and negotiated a savings plan for its customers, which began as a 15% savings and has since increased to a 22% savings off of the best national pricing available. “We now have more than 30,000 phones from our customers participating,” Werning said, “and we use the community of John Deere customers and the strength of John Deere to help customers save money, become more efficient, or both.” Other examples include OfficeMax savings programs and homeowner financing options that fall under the Business Solutions umbrella.
Additionally, new products continue to be introduced to allow the company to keep pace with the changing market. At Expo GIE 2007, held in Louisville, Kentucky, last October, John Deere introduced its newest line of maintenance equipment. Named the ZTrak Pro 800 series, it will replace the existing line of zero-turn mowers, with several exciting new features.
Throughout its history, Deere & Company has remained committed to its core principles of quality, innovation and integrity. An acute attention to changing economies and customer tastes has earned the company a well-revered status in the industry. The continued growth and scope of the Worldwide Commercial & Consumer Equipment, and especially John Deere Landscapes, has firmly embedded the company in the landscape industry. Sprouted from the concept of one-stop shopping convenience, the division has earned greater and greater market share in the green industry each year.