Posted by Hay DR on February 02, 2008 at 07:18:26 from (76.5.152.136):
Just to inform the public Farmtrac is all but in bankruptcy. The parties involves are Farmtrac- Escort/LS, LG & Same & Textron.Here is a letter posted on another website by a dealer.
"I did get a certified letter today from Textron "reminding me" of my obligations under our floorplan contract. I do not know whether this is a result of Farmtracs current uncertainty or a response to the dealership termination letter that I sent a couple weeks ago. I'd be interested in knowing if any other dealers got the same letter.
It appears this is going to get very complicated and expensive and I now think I am going to have to hire an attorney just to make sure I don't absorb any more liability than is legally mine.
It is true that each state has its own farm equipment dealer franchise and floorplanning buy back laws. It might be a good idea for Famrtrac dealers in each state, who still have inventory or balances with Farmtrac (or Textron), to jointly retain legal counsel. No point in duplicating effort and burdening ourselves (dealers) with added legal expneses in addition to the potential losses we are possibly facing on our existing Farmtrac inventories.
These are still good tractors and there are parts sources out there. the big issue in my opinion is backing of the warrantys. Most of these tractors seem to need little or no warranty work anyway so hopefully the end users will not be drastically damaged by these events.
Dealers will be damaged in many ways, not the least of which is credibility with our customers.
Funny thing is, today I was talking to a dealer that Farmtrac fired several months ago for lack of sales and service facilities... they came and got his tractors and cleared his floorplan account... he is off the hook totally, all because he wasn't a "good dealer" in Farmtracs book... We have sold increasing numbers of tractors, been faithful through the tough times and now we are going to get squeezed hard over this..."
The dealers are taking a big hit with this mess. Textron is contacting dealers and being heavy handed and say the "No Come Due" terms that Farmtrac had offered dealers are null and void and dealers are responsible for curtailments and interest that Farmtrac is in arrears on to Textron.
This is not good business to keep dealers in the dark and be heavy handed with the people that will sell their products. It is going to be a challenge for Farmtrac to keep their dealer network after Farmtrac & Textron have treated their dealers in this way. Textron is refusing to take the tractors back. Textron says Farmtrac is responsible for the dealer contracts. It sure looks like the attorneys will make money on this deal. Look for this mess to end up in Federal Court. This mess did not happen overnight and likely will not be cleaned up overnight.
What is a mystery to many is the products are high quality and properly positioned to succeed in the USA market. Customers that own Farmtrac tractors have not lost anything unless they sell at a depressed value due to the current uncertainty of Farmtrac. The products are too good to walk away from and support will be available after the dust settles. Keep using you Farmtrac products and you will be fine. You will lose value if you try and trade now.
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