Re: Re: Re: IH's demise. . . McCardell's strike

Posted by dhermesc on April 07, 2004 at 07:08:22 from (68.110.220.22):

In Reply to: Re: Re: IH's demise. . . McCardell's strike posted by Joe Evans on April 07, 2004 at 05:50:10:

Actually the strike came at the perfect time - IH had built up inventories in anticipation of it and was in a pretty good position in late 1978 to mid 1979. If ever there was a time to get their wage structure back in line it was then. Also if there was ever a time to shut down production in a farm equipment plant it was 1980-81.

Manangement screwed up three ways during and after the strike. First they should have used the down time as the oppurtune time to retool and introduce the 88 series - should never have continued the 86 series after the strike. They could have opened 1981 or 1982 with a brand new tractor with all the time they needed to make sure it came out as a quality product instead of the usual first year glitches most new products suffer.

Second, they lost their nerve and gave in to the union instead of extracting the consessions IH needed to be competitive. Management thought the strike had gone on too long - when in actually they could have waited another year or two easily. Once the recession kicked in and the IH employees saw their brethen being laid off at Deere, Ford, Chrysler, and GM the idea of manditory overtime would have been welcome.

Third, when they fired up the plants they ran overtime to acheive maximum production levels in attempt to build inventories for what management predicted would be banner years. Apparently they didn't consider the fact that a grain embargo and 20%+ interest was devastating the the farmers they hoped to sell to. They went into the worst farm economy ever (including the depression) with their inventories maxed out and no money in the bank. IH could have shut down production till 1981 and been in better financial shape then most farm product manufacturers including John Deere.

In 1981 you could buy NEW 1979 IH tractors and this was after IH had discounted them to the point that they where even the price range of farmers in Mexico. It is still shocking to see how many 86 series tractors are South of the border.

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