Now I am worried!

[wallace]

Well lets just hope I am way wrong about this...
I just got a fax from Agricredit (financers of Kioti products and many other brands of equipment) and rates went up like you wouldn't believe..used equipment was apox 8.5-9.5% Now they are up over 11%.
Okay so now you woundering what this means..
Well these nice financing rates that the manufactures are offering are buy down rates from the banks.
So if the standard rate is 7.5% manufactures have to take money out of their profits and use that to buy the rates down to the attractive 0% and so on.

Long story short I think rates are going to go up quit a bit and we may loose the 0%
Now keep in mind I am speculating.
If this happens I think we as equipment dealers are going to be in a world of hurting.
This coupled with some of the biggest price increases I have ever seen it the equipment business make me scratch my head.

Right now the only thing driving customers in is the attractive financing.
If we lose that I'm not sure how we will be able to sell.

Even this year my profits were cut a little bit because of fuel cost and now we can't afford to be taking more out of our pockets for buy downs.

Hmm I,m starting to sound like the Big 3 car manufactures!

I hope I am wrong and you all make fun of me but I think this time we may be faced with some challenges.

As of today I do not see my dealership disolving because of how dieversified we are but it will hurt a little.

 

[JoelD]

I can't help to think, with the melt down and drastic reduction in global fuel prices and the overall feel that deflation may be a-comin that manufacturers would be closer to reducing prices rather than increasing. That combined with the astronomic rise in the dollar, fewer dollars buy more foriegn stuff. For example, according to Oanda, USD has gone up 43% since January against the Koren Won and 33% against the pound.

Would expect the USD price to be more likely to drop not go up??

Maybe I've confussed my math?

Joel

 

[dirtworksequip]

 

[Patches]

I'm sorry, but, easy credit is what got us into the present mess to begin with. If I can't buy for cash, I ain't buyin' and I realize this is not good news for dealers, but if people had this mantra from day one, WE WOULDN'T BE HERE I can think of all manner of things I (want), but can't afford and so "go without"; Corvettes, bigger tractors, boats, etc., etc.

 

[wallace]

Not sure how to take your post...but if you are insuniuating that I am crying on someones shoulder, sorry dude that aint me I am not one of the lazy ones I have a cdl in my back pocket and if push come to shove I will be back in a garbage truck making a living!
See that's the difference between someone that worked hard to get to where I am today and someone that gets everything handed to them.

I will throw garbage again.
I will pump septic tanks again.
and if it came down to it I will flip hamburgers at Mc Donalds.
I will survive.

 

[sandman2234]

Hopefully he isn't calling you a crybaby. Saw too much of that from the auto unions members lately.
Even CDL drivers are going to have cutbacks. With people buying less stuff, then less stufff is needed to be hauled. The more CDL drivers that loose work, the more that will be bidding on your garbage truck job. Most I know aren't qualified for the burger flipping job, so maybe that one will be safe. Trickle down effect is probably going to catch most of us and tell each of us in their own way that there is a problem here in these United States along with most of the free world. Amazing how a world has a problem and everybody wants to point it at the President, when in reality he couldn't have done anything about it with the opposition he had in the House and Senate.

David from jax

 

[Bird]

Trickle down? You bet. One of our daughters works for the BNSF Railway company and, while she thinks her job is pretty secure, they've warned employees that business is down, so you know what's coming.

 

[coobie]

Not sure how to take your post...but if you are insuniuating that I am crying on someones shoulder, sorry dude that aint me I am not one of the lazy ones I have a cdl in my back pocket and if push come to shove I will be back in a garbage truck making a living!
See that's the difference between someone that worked hard to get to where I am today and someone that gets everything handed to them.

I will throw garbage again.
I will pump septic tanks again.
and if it came down to it I will flip hamburgers at Mc Donalds.
I will survive.

Rick,I hope everthing works out so you can stay in business,I for one think you have helped a lot of board members with your knowledge and great service.Thanks again,coobie

 

[JoelD]

Rick, go easy, would'nt take the, "Sad Walmart Symbol", personal.

In the end, each business has it's key drivers, like it or not. For some its raw materials, for others its labor costs for others political climate for others interest rates,etc.

I guess, what I don't get is, 700B umbrella grant of money. How is it that it does not seem to be trickling down as intended? In the end, we'll all pay, one way or the other, wether it is through lack of access to credit, loss of jobs due to overall economic slow down, etc, for in my humble opinion, poor politic decisions and leadership, in all arenas over a long period of time. They insisted to get credit into the hands of the wrong people, and long story short, billions and billions of dollars of bad loans were made, they were then traded, inflated further in value and now the house of cards has come crashing down.

That still does not change the fact that certain businesses have drivers, and in consumer products one of those drivers has historically been the availability of affordable credit. As an inverse example, I remember my dad was a real estate broker with his own agency in the 70's, interest rates went to 19% and home selling basically stopped (much bigger ticket item than tractors and the like). Thanks to his philosphy stated below, the impact of his business failing was transparent to me and my brother as he transition to a job in the postal service (like you a guy willing to do what ever it takes in an unrelenting sort of way).

With that said, I personally carry no credit balance other than my mortgage (4.875% fixed with about 8-9 years left), which, with investment returns being what they are, may get paid down more aggressively, as 4.875% return all of a sudden looks good (crazy to think).

Best fiscal lesson my dad (78 now) ever taught me (never went to college by the way), was, don't spend what you don't have, if you have it, and you can afford to spend it (i.e. you've got adequate savings already), then go ahead and spend it.

Personally, if I'm ready to buy something, 0% can push me to purchase a little earlier than I may have without the 0% (all other things like price being equal), but I know for many others, it can be the make it or brake it part of the equation.

Rick, in the end, I expect people, as they have over many years, will continue to purchase tractors and agricultural equipment and have a need to have the equipment serviced. Now more than ever the strong will survive and the weak will fail. As long as there are customers, they'll continue to search out the best vendors, and dealers like you who have a proven track record will continue to get the business of those customers.

As an old budy of mine always says, the cream always rises to the top.

Always interested in what people do for a living and how they ended up there, and as I'm sitting here 7:00am Sunday my time getting ready to catch up on some work, here's my list in chronological order (my little facebook bio):

While in HighSchool
Caldors - first summer job, department store clerk
Paper Distributor - Moved pallets of paper around by hand

While in College - U-Mass Lowell (Called University of Lowell then)
Data Entry Clerk
Owner - Data Entry Co. (In my parent's basement, started with an XT for $600 loan from my mom and dad, my first HD had 20 meg)

Post College (BS)
Programmer - First job out of college, data analysis for market research
Truck Driver - Cintas -Picked up dirty uniforms, rags, dish towels, rugs and deliverd clean (this was durring the las recession)

While in School - went back to College (Bentley) for Accounting - One of the best moves I've made
Postal Service - Letter carrier, then Supervisor and acting tour manager of a data processing facility

Post Bentley College
IBM - Corporate Internal Audit -
KPMG - Accounting firm - Got my CPA license while there (best move I ever made)
Director of Internal Audit - at a public manufacturing company
Corp Controller - Same company as imediately above
Now VP Corp Controller at a public professional services firm.

Like you Rick, I'll do what ever it takes to put food on the table for the boss and mini-boss, up until very recently (mini-boss is at an age where she wants more of my time) I've been taking an add out in the local paper "free removal of unwanted lawn and garden equipment" (I think this was a great idea by the way, depending on where you live you can make some good money doing this), I'd pick up, fix and sell or part out and sell. Paid for a couple of X-masses. And got me a bunch of nice equipment for free (other than my labor in driving out, winching and dragging into my trailer and then fixing). Met a bunch of really nice people in town by the way. And brought the mini-boss along a few times, good for her to see what it takes to get a job done.

I have a feeling most on this forum are similar, tough working guys (couple of galls out there not lease of which is Amy who by the way I'm thinking works every bit as hard as you do), who do most of the work themselves and have few to thank, other than themselves, for what it is they have.

Sorry if this way too many words, maybe just punch drunk from the events of the last few weeks and days, just recovering from a couple of days of power loss from ice storm.

Joel

 

[IXLR8]

As long as there are customers, they'll continue to search out the best vendors, and dealers like you who have a proven track record will continue to get the business of those customers.
As an old budy of mine always says, the cream always rises to the top.

Rick, this is the time where all the little things you have done for so many will come back to help you. I for one thank you for all the help you have provided and I will support you any way I can.

While in College - U-Mass Lowell (Called University of Lowell then)

Hmm... it was Lowell Tech when I went there, (BSME) Lowell State was a seperate school. Guess I am showing my age.

 

[JoelD]

Rick, this is the time where all the little things you have done for so many will come back to help you. I for one thank you for all the help you have provided and I will support you any way I can.


Hmm... it was Lowell Tech when I went there, (BSME) Lowell State was a seperate school. Guess I am showing my age.

I agree, I will continue to purchase from Rick as his customer service (for me, mostly answering questions) has earned my patrionage.

PS, fingers crossed, if I get a little something something from work this year I'm hoping a tiller is in my future. Just can't come home from the cookout empty handed.

Joel

 

[jimmyj]

Sure is a timely post Rick. I don't get the message behind "unhappy face" either - don't know what to make of it but I would not take it personally.

I am in the pet food industry and it is blowing me away that a lot of the major food producers are starting to come in with some of the largest cost increases I have ever seen (in almost 30 years). For example, I am aware of well known brand that will be going WAY up by about $9 a large bag of dog food in January. They seem arrogant, feeling that they can rely on the brand name and to heck with the situation or reality. I think they will kill their brand. I know for a fact some of the increases are to make more profit, not justified by circumstances.

I just got my CK30 and I did use some of the 0% financing. There is nothing wrong with using credit as long as a person is responsible about it. Make sure you do not exceed your ratios, make sure you use credit to your advantage, don't buy what you cannot afford to buy. Cash will always be king though no one could argue. This crisis is so much the result of irresponsible greedy lenders who were unregulated bending the rules of smart lending. Idiots, greedy "people" who ruined peoples lives (but the borrowers must take equal blame).

I thought long and hard about waiting another 6 months to buy, waiting for some poor person to lose his or her tractor and buying it from them for cents on the dollar. I cannot bring myself to do that morally. The guys in the dealership are good guys, they are part of my community, their kids and wives and mortgages depend on our support. My wife and I are going ahead with home improvements, nothing stupidly extravagant but we planned them for many years and if the world falls apart, oh well, a couple of more or less bucks won't make that much of a difference. We were very happy years ago making a fraction of what we make now in a wee little house with a wee little yard. I could do that if it got that bad.

Good luck Rick!

 

[Mark_G]

Rick,
I was laid off a month ago, but once I get another job (soon I hope) I am still planning on getting a rotary cutter from you and a brush guard when we can schedule you installing the loader fix.

Even if financing doesn't go as you would like, you and a few other dealers (many on this site) have something few others have, great service. That will continue to serve you well. As soon as I got my tractor my local dealer folded. Poor service did him nor his customers any favors. I was grateful you and especially your wife would take the time to help me transfer the warrantee etc.

So sign me a loyal customer nearly 4 hours away.

 

[IXLR8]

PS, fingers crossed, if I get a little something something from work this year I'm hoping a tiller is in my future. Just can't come home from the cookout empty handed.
Joel

A tiller is on my list as well.. but a local (50 miles) Kioti dealer rents them for $50/day, $300/week for something that will only be used a few times for landscaping.. I am having trouble justifying purchasing.

 

[wallace]

Guys thanks for all the positive..
This was more of a heads up on where the industry is going not just Wallace tractor.

Besides I am still having to much fun to close my doors

 

[IXLR8]

Guys thanks for all the positive..
This was more of a heads up on where the industry is going not just Wallace tractor.

Besides I am still having to much fun to close my doors

I suspected that it was an industry headsup thing... but I just want to say thanks anyway. I noticed that your bailout cost has gone up!!

 

[WilliamBos]

Guys thanks for all the positive..
This was more of a heads up on where the industry is going not just Wallace tractor.

Besides I am still having to much fun to close my doors

Well I hope things recover real soon. If this could have been avoided, we would be better off.

 

[wallace]

I suspected that it was an industry headsup thing... but I just want to say thanks anyway. I noticed that your bailout cost has gone up!!

 

[Patches]

Well I hope things recover real soon. If this could have been avoided, we would be better off.

It could have been avoided, with a little oversight, a lot less greed and a whole lot of "common" sense. Seems like everybody wants something for nothing; ain't gonna' happen. The world has to wake up to the reality that goods cost money to produce, and everyone on the train has to make a profit to stay in business and if you contract a debt, YOU HAVE TO PAY IT OFF ???

 

[blueriver]

It could have been avoided, with a little oversight, a lot less greed and a whole lot of "common" sense. Seems like everybody wants something for nothing; ain't gonna' happen. The world has to wake up to the reality that goods cost money to produce, and everyone on the train has to make a profit to stay in business and if you contract a debt, YOU HAVE TO PAY IT OFF ???

Most people just don't understand ... easy credit, easy payment ... how much down and how much a month.. in general I think most live 30 days to bankruptcy, loose your source of income ... in thirty days your whole life will change.