Hard Times and Lime Green Gold
This article was originally published as a feature in the Ageless Iron section of Successful Farming magazine, where Lee Klancher is a regular contributor.
“Prosperity is a great teacher; adversity is greater.”
One of the most remarkable stories in farm history is Steiger’s stellar performance during the dismal market of the 1980s, a pivotal time when all the colors suffered mightily due to labor strikes, high interest rates, and declining crop prices.
In a spring 1980 article, as the market began to tumble, executives from the International Harvester Company, Deere & Co., Massey Ferguson, J.I. Case, and Allis-Chalmers all predicted double-digit declines.
In the ensuing four years, those predictions proved to be understatements as the worst farm economy since the Great Depression devastated the American farm and all who sold to them. By 1984, only one of the five manufacturers mentioned above remained an independent entity. The rest were sold, consolidated, or shuttered entirely.
On the windy plains of Fargo, North Dakota, the Steiger Tractor Company and their lime green “Cadillacs of tractors” suffered through the same high interest rates and down farm market as their red, orange, blue, and green competitors.
The results, however, were strikingly dissimilar.
The anatomy of a Steiger provided easy entry into the cab, sharp turning capabilities, an all-day fuel supply, easy access to grease fitting below, and the engine under the hood. Power, simplicity, and comfort were all features that every progressive farmer wanted. Photo courtesy of Sherry Schaefer Collection
Harvester lost a shocking $397 million in 1980 alone. Massey Ferguson was bailed out by the Canadian government and still became insolvent. Allis was sold, twice, and then dissolved. Even Deere was forced to cut more than 100,000 employees and kept their factories operating by contracting work to build Winnebago parts and paint Chrysler bumpers.
Meanwhile, Steiger sales increased in 1980 and 1981. In 1982, sales dipped mildly but the company introduced the high-tech Panther 1000 and a new line of industrial tractors as well as acquired a tillage company. During perhaps the two worst years in modern agricultural history—1983 and 1984—Steiger’s gross sales grew.
How were they able to do this?
The company possessed a critical combination of a product that was right for the times, clever marketing, and an agile production line and company.
The Steiger was on target from day one, when John Steiger and his sons Douglas and Maurice hand-built a four-wheel-drive 100-horsepower tractor during a time when “high-horsepower” from the major manufacturers was a 55-horsepower two-wheel-drive.
For the next twenty-five years, the average farm size grew steadily, driving demand for high-horsepower four-wheel-drive tractors. While the major manufacturers had solid 4WD machines on the market by the 1970s, the Steiger brand offered rock-solid Caterpillar and Cummins engines, stout chassis built in Fargo, North Dakota, and state-of-the-art cabs.
A crashing 1980s farm economy didn’t change the fact that farmers had to work more acres to survive. A modest demand for the machines continued even when money was tight.
Steiger’s marketing was another major factor in their performance. Company founder Douglas Steiger likes to say he was a builder not a salesman, but nobody sells things better than the guy who built the thing. And nothing sells as well as quality. Douglas was passionate about creating high-power machines that were built to last, and when he articulated that, customers responded.
As the company matured into the 1970s, the sales and marketing team used a blend of flamboyant sales techniques and creative marketing campaigns that played off the company’s line of models named after feline predators. And the machine’s quality remained good.
Scott Westland Anderson was hired by Len Odde in late 1975 to help market Steiger tractors to the media. One of the ways that Steiger was able to stretch its marketing dollars was with effective public relations. They couldn’t afford a lot of ads, but they were a darling of the media.
“PR was a great avenue for us, because . . . we were competing with deep-pocketed competition,” Anderson said. “To match them dollar for dollar on advertising wasn’t even a thought.”
The Steiger tractor symbolized heartland innovation, and presidential nominee Jimmy Carter used it as a speech platform at a farm show in 1976. Photo courtesy of Scott Anderson Collection
Anderson said the stories about Steiger played well in the media. “Publishers were all very interested in us, not only for our limited advertising dollars, but for stories from our farmers, from our dealers, from our engineers, from our experiences, to put them into their publications and print.”
Paul Wallem started his working life as a marketing manager for International Harvester selling 460 and 560 Farmalls in the Midwest. He moved on to work in Chicago on the Cubs and crawlers and transferred overseas to become the export manager. He eventually tired of the travel and returned to his native home in Illinois and bought an IH dealership. He added Steiger tractors due to the excitement they generated in his customers.
Wallem is a pilot, and he began to fly farmers from Illinois to Fargo for tours of the plant. “I had 210 Cessna with six seats, and I would fly farmers out there to Fargo, fly out in the morning. They would play blackjack at the Holiday Inns in the evening, and then we would tour Steiger the next day and come back.”
The big 450s, in particular, made good impressions. Wallem recalled one instance in which a customer bought a Tiger the day after getting back from Fargo. (Note that Wallem wrote a book, What Really Happened, that is a collection of stories from IH employees in the 1980s. You can get that book from the good folks at Heritage Iron magazine).
The tours were a hallmark of the company, and Syl Melroe recalled how effective it was to get farmers in to see the tractors being built and to receive feedback straight from the farmer. He also used customer focus groups with good effectiveness and was able to address issues customers identified by quickly getting the change made on the production line.
They also had management that understood managing the nickel carefully. As the farm crisis deepened, the team cut costs carefully and upped their efforts in sales marketing. They also created a lower-priced model. The results? While the industry foundered, Steiger was able to continue to grow profits or net. In the end, Steiger had to sell to Tenneco when their banking partner got panicky and pulled their credit line. The saying at the time was, “better red than dead.” The independence, grit and intelligence of that crew lived on, and the Steiger brand survived.
In 1980, the company had the highest sales in its history. Looking forward to the new year, the company invested in a new marketing company. Left to right: Doug Davis, new ad agency president; E. W. Muehlhausen, Steiger vice president of marketing; Scott W. Anderson, Steiger advertising manager; David D. Koentopf, Steiger president; John Sarkett, new PR agency president (August 1980). Photo courtesy of Scott Anderson Collection
If you’d like to read more about Steiger history, check out the “related books” linked below.