Tennessee lost its last single-store John Deere dealer on March 15, 2021. Clifford Pugh, owner of Tri-County Equipment in Crossville, Tenn., announced in early 2021 Deere had informed him they would be terminating his contract because of lower than expected market share performance. 

In a statement to his customers at the time, Pugh said, “In recent years John Deere has pushed to consolidate their single-store dealers in favor of those that own multiple locations, and I have been the last single-store owner in Tennessee for the last 4 years. On March 5, 2020, a John Deere division manager hand-delivered a termination letter to me stating that they would close me down as a dealer on Sept. 2, 2020, because of below expected market share performance, which is set by Deere, for the sale of new tractors. After lengthy negotiations with John Deere and their single, specified potential buyer, I decided not to sell and let John Deere terminate the dealership. They then told me that March 15, 2021, would be my final day as a John Deere dealer. On that day they brought in several trucks, loaded their equipment, took the John Deere sign down and drove away.”

Pugh was clear in his statement, however, that Tri-County Equipment wasn’t going anywhere. “We will continue to serve our loyal customers with the same superior service they have become accustomed to, as the vast majority of our employees are staying with us, and they have always been our best asset … The brands may be different but the service will remain the same.”

New Tractors, Same Customers

When Pugh announced his loss of the Deere contract, he stated Tri-County would continue to carry the Yanmar tractor line and was negotiating with a few other brands. At the time, Pugh’s John Deere line brought in 80% of his revenue. He says the process of filling out the dealership’s tractor offerings took some effort.

“I originally looked at Deutz-Fahr, but I ended up going with McCormick for selling larger tractors, and it’s done just fine,” he says. “I’ve had several customers trade in their John Deeres for McCormick. And we’ve sold a lot of lower horsepower TYM tractors, which has turned out to be really good for us.”

Pugh points out he’s not had a problem yet with getting TYM inventory to the dealership, whereas if he were still a Deere dealer, “I probably wouldn’t have had anything to sell,” noting how empty the John Deere dealer lots in his area have been.

Pugh says he’s kept the majority of his customers’ business, even after losing his Deere contract. He says his shop is still full of green tractors.

“Of course I can’t do any warranty work, but I manage to get the parts that I need,” he says. “There’s 9 John Deere tractors in my shop this morning and at least that many more sitting outside. I’d hire more mechanics today if I could find them.”

The Disappearing Single-Store Dealer

Looking back on his over 40 years as a John Deere dealer, Pugh recalls a time when he was exactly the kind of dealer Deere was looking for.

“When I started, they were tickled to have someone like me. I built a business based on service,” he says. “I even made the top 150 dealers in 1987 and helped celebrate their 150^th anniversary. I sat at the same table as Mr. William Hewitt, who was the John Deere president and CEO at the time.”

“Somewhere in the mid-90s, you could see this trend [toward consolidation] starting. I knew the single-store dealers’ days were limited, but I lasted longer than I ever dreamed I would.”

Deere’s push for consolidation is well-documented. According to the Ag Equipment Intelligence 2022 Big Dealer report, an estimated 95% of John Deere dealership ag locations in North America are owned by dealership groups with 5 or more ag equipment locations. This was up from 91% in 2021. For comparison, the majorline OEM with the second-highest percentage of its ag equipment locations owned by big dealers is Case IH at 63%.

Pugh isn’t shy about sharing his feeling on John Deere. He says they’re a different company now than they were when he started.

“It’s a Wall Street-driven company, there’s nothing personal about it anymore,” he says. “I used to know my branch manager personally, I could call him directly. But it got to where you couldn’t get ahold of anybody if you wanted anything.”

Pugh says that part of John Deere’s process in terminating his contract involved offering him the ability to sell his business to another John Deere dealer. However, he didn’t think it was a realistic option.

“I’d explain it like this: it’s like taking your cow to a sale, but there’s only one buyer there,” says Pugh. “And that buyer knows you’re out of hay and that your pasture’s dried up. You’re not going to get what you should.”

He says the other John Deere dealer offered him 25% of what his dealership is worth and negotiations never get close to where he wanted them. “So finally I told John Deere to do whatever they had to do. Let’s get it over with,” he says. 

Pugh has one piece of advice to other small dealers who fear they may “get the ax” from their majorline OEM soon: move on.

“Just separate from them as soon as you can,” he says. “You’ll be better off for it. If you’ve got a good dealership that gives good service to your customers, you’ll survive.”

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