Ferguson Goes It Alone

In 1939 a shy, taciturn Irish inventor named Harry Ferguson made a deal with a shy, talkative inventor named Henry Ford. They both thought that a Ferguson-designed tractor, which had a hydraulic mechanism to raise and lower a plow automatically, would revolutionize agriculture. It didn't--exactly. But in the process the Ford Motor Co. made 250,000 Ferguson tractors, helped build Harry Ferguson Inc. into one of the biggest U.S. agricultural equipment companies.

Last week young Henry Ford II announced that the seven-year deal was off. Neither Ford nor Ferguson gave a reason for the split. Detroit guessed that money-losing Ford had decided it was not getting enough out of the deal. Ford is setting up a new company to be headed by General Motors Vice President Frank R. Pierce to make its own tractor and a complete line of farm implements.

To an ordinary company, such a blow might have been fatal. But Harry Ferguson Inc. is no ordinary company. Thanks to old Henry Ford, its manufacturing setup is probably the most remarkable in the country. Its basic idea is a pet Ford word, decentralization. Ferguson has built up a system of manufacturing 46 farm implements to go with its tractors through 105 subcontracting plants scattered throughout the country, close to their markets. Example: the Towner Manufacturing Co. of Santa Ana, Calif, makes offset disc harrows for orchards, because the biggest orchard market is almost in its back yard.

Thus Ferguson, although it owns no plants, has grown to a $10,000,000-a-month business. Tractors supply half this income, but towering (6 ft. 4 in.), fast-moving Ferguson president, Roger Martin Kyes (rhymes with skies), 40, does not seem worried. Harvardman Kyes introduced himself to farm equipment in 1932 at Cleveland's moribund Empire Plow Co., joined Ferguson's in 1940. He has run the company so smartly that Harry Ferguson now spends most of his time in England, overseeing plants there. President Kyes feels that "we could make money next year if we didn't sell a single tractor." But the company has already arranged, said he, to have tractors made elsewhere.

Nor is he worried about competition from the new Ford tractor, which will also have a hydraulic control mechanism. Said Kyes with a hard grin: "I recall that we have a number of patents." Old Henry Ford was never frightened by the threat of patent suits. Whether young Henry is remains to be seen.

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