Combines What

Silver_Green The problem with those ideas is that they still only have Cat dealers - plus they would have to run factories that produce short lines of equipment. They haven't yet got the demand yet for lots of gear. Whereas with Agco they have got an experienced short-line manufacturer, complete with a set of international dealers, good brand names and no engine supply and little in the way of transmissions. Its ideal really for both partners. Agco have the Allis and Massey name, they've got OK combines which will no doubt receive Cat design assistance, as will the tractors. I think Agco buy the final drives off David Brown, and gearboxes somewhere else. Cat could gradually move first their designers and later their factories into these parts. Well that's my 2 cents anyway. John Hudson

I'm not saying that the current AGCO_Cat relationship is a bad thing; - in fact, it has a lot of merit. As you already mentioned, CAT may be able to supply more components to AGCO, such as powershift tranny's, since AGCO currently counts on FUNK (a Deere subsidiary) for some of these products. I think, though, that CAT could have also done alot with the Genesis_Versatile line, in addition to the Case C_CX_Magnum line, and they would have already had a "loyal following" from previous owners of these products. I also believe that the number of CAT-Ag dealerships would have increased, although I'm just guessing! It will be interesting to see how well this new venture works out for both parties. Maybe CAT will (someday) make a hostile takeover bid of AGCO! Just my 2 cents worth (Canadian; - 1.2 cents American)

Silver_Green We're really on the same lines. But I think Cat has gone the low cost route by going with Agco. To take over the Versatile New Holland factories - even for not very much money - would have required good sales, which may be hard to get for a year or three. I suspect that some of the $80m charge that Cat took on the sale of the Challenger line may have finished up in Agco shares. Has anyone seen any sign of what it cost Agco to buy the Challenger lineIJ They may have just issued Agco shares to Cat. I think Cat will become more involved with Agco, I just don't think it will be a hostile bid. It'll be friendly on both sides. And it may just be share sales to Cat to prop up Agco. Either way it's got to be good for farming. I really think the MT 800 line is a new technology leap for Ag that will have to be picked up by the lowest cost producers. Five hundred hp in a low ground pressure package will set the pace for productivity per man and per acre. Cat has made the technology leap with tractors and I think they'll do it with the Massey 8780 Rotary too. The JD STS cylinder is only 123 inches long, the Massey is 140. (Axial flow is shorter than JD) There are changes I'm sure that are needed to get the 8780 to the STS performance, but the potential is there. Cat will be able to get more income from the Agco combine line than the Claas. They could participate more in design esp transmission etc than they could with Claas, plus the Claas isn't a true Rotary, it's only rotary separation, so they still have to make the jump. That's about enough unsubstantiated opinion for one day. My 2 cents NZ (0.9 cents American) worth. John Hudson

What CAT Ag will become - you meant to say! CAT Ag should now be thought of in terms of the CAT dealer network and structure vs. the CAT Corp. immage (this philosophy works for all manufacturers and their dealers too). When you think of Deere or CIH who do you actually thinking ofIJ 1) Their dealerships and 2) Their products! At last I checked, CAT is still there, providing all of the necessary components that gave their Ag product value and now even more with the new MT series rubber belted Ag tractors and contiued line of CAT branded lexion combines, all of which to be complimented by the extensive line of AGCO equipment of comparable color and label, specific to the CAT Ag dealer. If I had a bunch of screaming stockholders screaming down my neck to improve my financial postion and stop messing in cyclical venues, I would have probably quite Ag and probably even forestry totally. Instead, CAT took the value of being in the AG equipment business (value added component supply) and captitalized on it. Their dealers still get to be in ag with products using a majority of Cat components and branding and no other dealer network can come close to the level of service and support and Cat deale can provide. As a farmer, I personally see CAT Ag, as represented by its dealer network as being the dealer and product range that will drive the future... they are well managed, well financed and well stocked with quality products and support and are not plagued with a $12.9 bln dept or have $9 bln coming due this year.

No; - I actually stand by my original comment; - "What CAT AG might have been"! I am not critical of Cat's cooperative working arrangement with AGCO, but the sale of Cat's rubber-tracked tractor division to AGCO clearly put's CAT out of the farm equipment MANUFACTURING business, and into the farm equipment MARKETING business. Sure, they may become more prevalent suppliers of components to AGCO, but as far as the "superior service levels" which you lament Cat possesses over Deere, I'm afraid they just don't exist; - at least not in Canada. The Challenger product line strongly resembles that of Massey Ferguson, White, AGCO, AGCO-Allis, and Hesston, and sticking a CAT engine into a "yellow Massey" does not (by my perspective) constitute anything new or innovative. Perhaps CAT may contribute more to AGCO in the future, but by today's standing they're just another AGCO clone.