Company Overview

Deere & Company is one of the world’s two largest farm equipment producers, but its business doesn’t begin and end with tractors. Deere also is a leading maker of industrial, forestry, construction and lawn-care equipment. Today, the company consists of four major business segments: agricultural equipment; commercial and consumer equipment; construction and forestry; and credit.

Deere’s roots are in Grand Detour, Illinois, where John Deere set up a blacksmith shop in 1836. But it was tough Midwestern soil that helped him find his true calling: The region’s rich, black soil stuck to the iron plows that Deere and his peers had been using. In response, Deere designed a circular steel saw blade to create a self-scouring plow that moved quickly, and nicknamed it the “whistling plow.” The whistling plow hit the market in 1838, and while sales started out slow, by 1842 Deere was producing 25 a week.

In 1847, Deere moved his enterprise to Moline, Illinois. Six years later, his son Charles joined the company, thus kicking off Deere & Company’s tradition of family management—until 1982, all five Deere presidents were related to John Deere by blood or marriage. Charles Deere set up an independent-dealership distribution system, and the company added wagons, buggies, and corn planters to its line of products.

Deere became the number-one farm equipment maker in the U.S. in 1958, and number-one in the world in 1963. The company took its products to Argentina, France, Mexico, and Spain, using joint ventures and intensive research to succeed.

Robert Hanson was named CEO in 1982, becoming the company’s first non-family CEO. He invested $2 billion into research and development in the 80s, even despite an industry-wide sales slump. Deere was the only major agricultural equipment maker that decade to neither close nor change ownership. It did, however, cut its workforce by about 44 percent.

The company spent the 1990s expanding its lawn care business, primarily in Europe. In 1991, it bought a majority stake in German commercial lawn mowers Sabo-Maschinfabrik and, two years later, bought the distribution rights to Zetor tractors and Brno diesel engines for marketing in Asia and Latin America. Deere continued to expand despite a recession and weak farm prices, and by 1994, it had replaced its tractor line with all-new models.

In 1998 Deere laid off about 2,400 workers and cut back significantly on production. The following year, the company sold its property/casualty insurance operations to Sentry Insurance. Also in 1999, Deere took a minority stake in a new joint venture with Credit Suisse and First Boston called Nortrax, intended to consolidate, develop, and manage Deere’s construction and forestry equipment dealers.

Soft demand led the company to further cut jobs and production in 2001. The following year, Deere dissolved its hay, farm, and forage equipment joint venture with Woods Equipment Company, Alloway Industries. In 2004, the company purchased the remaining shares of Nortrax. It also announced that it would develop a battlefield vehicle for the U.S. Army along with iRobot.

In 2005, Deere acquired United Green Mark, a producer of irrigation and landscaping products. The move gave the company 52 additional dealerships, mostly in the Western U.S. In 2006, it sold John Deere Health Care for a half-billion dollars, and also purchased Roberts Irrigation Products.

The drop in the U.S. housing market is starting to have a significant impact on Deere’s forestry division. While the company expects sales in that division to remain flat in the U.S., it hopes demand in Europe will remain strong. It had lowered production in 2007 in order to clear retail inventories.