FarmTrac Troubles

[Eric_Phillips]

Bluechip,
Thanks for the answer. That helps us not in the business understand how the players fit together.

 

[Tim C.]

Red, Chip did a good job. Add that to you take on the "value" of the inventory and you have quite story.

I know it does not sound bad to say each tractor is only over floor planned by 2K. Per dealer that is 20K on 10 tractors. Per company it is 5 Million for the total floor plan on 2500 tractors.

That is interest bearing 365 days a year.

This is "fake" money. It never was there and never will be. But the company has an extra 5 mil to play with, the debt is transferred to dealers, and the floor plan company clears an extra 300K (min.) in interest each year.

Change the above number to 4K per tractor. We are talking real money now. Wait, we were talking real money anyway.

And Farmtrac did it without buying a lottery ticket.

The real problem is they are not unique in the industry. It is like "meth". The whole industry is hooked.

If you get a chance, look into Redball sprayers and Feterl augers. Both are going down. One has an amazing likeness to a certain other company.

Tim

 

[case1570]

Hey Textron, got written word today the Department of Agriculture, Trade and Consumer Protection Agency is also on the case. That information along with a lot of new names that are posting here makes me think that more people are learning about the real Textron. That can't be good for your bottom line?

I love the post that wants the complete list of all Textron affiliates so as not to do business with them. I don't care what color tractor you own, the people on this site know right from wrong. Thanks to all for the support, now lets get that list together!
Case
PS I love to state that my Farmtracs are great!!!!!!!!!!

 

[redneckford]

Red, Chip did a good job. Add that to you take on the "value" of the inventory and you have quite story.

I know it does not sound bad to say each tractor is only over floor planned by 2K. Per dealer that is 20K on 10 tractors. Per company it is 5 Million for the total floor plan on 2500 tractors.

That is interest bearing 365 days a year.

This is "fake" money. It never was there and never will be. But the company has an extra 5 mil to play with, the debt is transferred to dealers, and the floor plan company clears an extra 300K (min.) in interest each year.

Change the above number to 4K per tractor. We are talking real money now. Wait, we were talking real money anyway.

And Farmtrac did it without buying a lottery ticket.

The real problem is they are not unique in the industry. It is like "meth". The whole industry is hooked.

If you get a chance, look into Redball sprayers and Feterl augers. Both are going down. One has an amazing likeness to a certain other company.

Tim

There went your membership in the 2% club!!!!!

 

[SESS]

We know that Farmtrac and Montana are floor planned with Text***-WHO ELSE IS???? Come on, don't be shy-we want to hear all the other brands that are floorplanned with them as well!

 

[redneckford]

I bet Messick knows?????!!!!!

 

[bluechip]

Tim makes a great point, Almost every company sells tractors, and manages thier field inventory, by way of offering "DSA" dealer settlement allowance incentives. This money and/or any funds needed to "Buy down" interest rates for all those Zero percent deals you see, are included in the invoice price to dealers, then credited back after the unit sells. If the manufacturer fails, as in the case with Farmtrac, the dealer is stuck owing a balance that includes the funds that were supposed to come back to the dealer, typically passed on to the buyer in order to make the transaction more attractive, either with low rate financing, price discounts, over allowance on a trade or all of the above.

 

[redneckford]

Thank --- For the Friday Follies!!! Read and weep!!!! Ole Blue and Co great job the rest on the way!!!!!

http://www.swassn.com/News/SWAFlash-Sept08.pdf

 

[Tim C.]

Chip, when the buying public figures out what the true cost is for these marketing tools they will revolt.

Any time a slick, MBA marketer tells you that he has a deal for you..........well, lets just say there is certain section in Wal Mart you better get to fast. Over in the corner in the health section.

It is not a perfect system. We don't the true cost of borrowing buy the manufacture. However, it is safe to assume that we can deduct a point or so off the standard rate. Let's say the standard rate is 8 percent. So, we give the manufacture a point break to get 7 percent. Now, take any finance program. Plug the payment in. Like 24K over 60 months at zero percent. (24000/60=400 per month). Now reverse the transaction and ask what is the current value of 400.00 per month over 60 months at 7%. You get 20,200.00. Difference of 3800.00. That is what the zero rate interest cost. Now, the problem is the MBA's have decided the the cash customer should shoulder some of the companies financing expense. I would guess a DSA on the about tractor to be around 1500 bucks give of take. So the cash buyer just paid more than the zero rate guy. If you have a late model trade in you get hosed as well. Also why your late model trade in is not worth much these days.

Yeah, the crack.....I mean low rate.....is killing the dealers and customers alike. But it feels so good and look how much money the MBAs are making off of "fake" money.

Tim

 

[California]

Thank --- For the Friday Follies!!! Read and weep!!!! Ole Blue and Co great job the rest on the way!!!!!

http://www.swassn.com/News/SWAFlash-Sept08.pdf

That's an excellent article. Everyone following the Farmtrac mess should read it.