In this episode of On the Record, brought to you by Weasler Engineering, we look at some analyst comments on Scott Wine's departure from CNH Industrial. In the Technology Corner, Noah Newman talks to Pessl Instruments' CEO about the recent investment it received from Lindsay Corp. Also in this episode, dealers and farmers chime in on brand loyalty, air seeder sales forecasts and layoffs at the Racine, Wis., Case IH plant.

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Scott Wine’s Resignation ‘Like a Head Coach Stepping Down Mid-Season’

On April 21, CNH Industrial named Gerrit Marx as CEO effective July 1. He succeeds Scott Wine, who resigned April 20 and will leave at the end of the current 3-year business plan cycle. Wine joined CNH Industrial as CEO in early 2021, spending over 3 years at the helm of the company.

In an April 22 note to CNH dealers that was shared with Ag Equipment Intelligence, Wine stated he decided to leave the company due to his inability to commit to the next 3-year business cycle in light of his “personal plans for the future.”

In a note to investors, RW Baird analysts described Wine’s resignation as “like a head coach stepping down mid-season,” saying he will leave before seeing the full fruits of his accomplishments. The note said:

“The move was unexpected and while it does appear to be voluntary on Mr. Wine’s part, the CEO change is occurring at a critical juncture in CNHI’s technology and operating journey adding further uncertainty just as CNH Industrial starts navigating a tougher cyclical backdrop in ag.”

“Mr. Wine has steered CNH Industrial toward meaningful transformation — acquired a tech stack that is in the early stages of being integrated in CNH Industrial’s ag offerings, parted ways with a critical component supplier (Trimble) and targeted sizable strategic sourcing savings and selling, general and administrative expenses restructuring (combined savings of around $460 million in 2024) which are yet to fully impact the profit and loss statements.”

JP Morgan analysts said in an April 22 note that on a positive note, European investors regard Marx as a tech-oriented and transformational leader. Marx was the president of Commercial & Specialty Vehicles at CNHI since January 2019, as well as CEO of Iveco Group after its spin-off from CNH Industrial in January 2022. They noted, however, that U.S. investors had questions, saying:

“U.S.-based investors were relatively unfamiliar [with Marx] and asked questions including: ‘why not hire someone with ag industry experience;’ ‘why rush to hire;’ and ‘how does this change the already announced cost savings targets and tech in-sourcing initiatives of CNHI?’ Our view is that Mr. Marx will likely shake up at least part of the existing strategies while staying focused on efficiency and cost cuts.”

CNH Industrial expects to report its first quarter earnings on May 2, which will be led by Scott Wine.

Pessl Instruments CEO Talks Dealer Benefits From Lindsay Corp. Investment

Today, we’re looking at Austria-based Pessl Instruments, an agtech provider operating under the METOS brand. Irrigation equipment manufacturer Lindsay Corporation recently acquired a minority interest in Pessl Instruments following a strategic partnership the 2 companies announced in May 2023.

Pessl offers IoT (internet of things) hardware and software tools, including field monitoring systems with a wide array of agronomic data points that inform Lindsay’s FieldNET remote irrigation management platform.

We sat down with Pessl Instruments CEO Gottfried Pessl to talk about how Lindsay dealers can benefit from offering Pessl’s hardware to farmers, which will be an add-on to the Lindsay FieldNET management platform.

“We are going to educate them [dealers] because that's for them another income stream of their activity. Nowadays, more and more [it] is going to be [about] recurring revenue. So they have already FieldNET, which is a very successful product. So it will be an add-on on FieldNET. So you can have additionally weather stations integrated in FieldNET. So you [farmers] pay a little bit more, but you get much more information, much more insights. The same is also with soil moisture. So the Lindsey dealer can support the hardware in the field.”

Pessl says a grower with 5,000 acres of corn on flat ground would need between 5 and 15 of Pessl Instruments’ in-field weather stations for monitoring the crop, though for measuring rainfall, a grower might need up to 100 precipitation sensors.

62% of Growers Identify as Brand Loyal 

An Ag Equipment Intelligence survey of over 800 growers conducted in April shows nearly two-thirds describe themselves as “brand loyal” and purchase the same brand year-after-year when it comes to tractors, field equipment or combines. This is inline with the 2020 brand loyalty survey when 62% of farmers said they were brand loyal, but down from 75% in 2017. 

Just over 24% of farmers said they are less brand loyal than they were 5 years ago. Dealers are a bit more pessimistic about how brand loyal their customers are, with 53% reporting their customers are less brand loyal vs. 5 years ago. 

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While about 10.5% farmers report being more brand loyal compared to 5 years ago, only 4% of dealers said their customers are more brand loyal vs. 5 years ago. Farmer commentary suggests price, service and the dealership are some of the top contributors to brand loyalty. 

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A more in-depth analysis of Ag Equipment Intelligence’s latest brand loyalty report will be released in July. 

Air Seeder Sales Forecasts Hit 5-Year Low in 2024

The percentage of dealers forecasting sales growth of 2% or more in air seeder and drills sales for the year hit a 5-year low of 14.6% in 2024, according to the 2024 Farm Equipment Dealer Business Outlook & Trends report. 

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This percentage peaked in 2022 when 27.1% of dealers were forecasting unit sales growth. 2024 was the second year in a row in which the percentage of dealers forecasting an increase in air seeder sales decreased.

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This follows the same trend seen in planter sales growth forecasts, which have declined from a 5-year high in 2022 to a 5-year low in 2024.

Layoffs to Hit CNH Industrial Wisconsin Plant

CNH Industrial plans to lay off more than 200 out of the 660 workers at its Racine, Wis., facility and is considering moving operations to Mexico, according to an April 16 statement from Wisconsin Senator Tammy Baldwin addressed to CNH Industrial CEO Scott Wine. 

According to Baldwin, Wisconsin’s Business Closing and Mass Layoff Law requires employers that make a reduction in force that affects at least 25% of its workforce to provide 60 days notice to employees and the Wisconsin Department of Workforce Development. As of April 24, public records show CNH Industrial has not filed a layoff notice related to the Racine factory.

Rich Glowacki, chairman of the bargaining committee with UAW Local 180, has filed a complaint with the equal rights division of the Wisconsin Department of Workforce Development for himself and on behalf of other union members, according to a Milwaukee Journal Sentinel report. Glowacki says CNH plans to reduce the number of employees to at least 170 by 2026.

In January 2023, more than 1,000 UAW-represented CNH Industrial employees in Racine, Wis., and Burlington, Iowa, ratified a new contract after a 260-day strike.The new contract included wage increases, shift premium increases and classification upgrades and expires in May 2026.

DataPoint: Declining Early Orders

This week’s DataPoint is brought to you by the 2024 Dealership Minds Summit.

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The percentage of dealers reporting declines in early orders of at least 1% reached 56% in 2024, according to the 2024 Farm Equipment Dealer Business Outlook & Trends report. This was the second year that this percentage increased, though it remains below levels seen for 2015 through 2018. It hit a 10-year low when 13% of dealers forecast early order declines for 2022.

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