Inventor Harry Ferguson battles to protect his groundbreaking designs
In the second part of a 3-part series, writer Jane Brooks continues her look at the life and times of Harry Ferguson, legendary inventor of the “Little Grey Fergie,” among the world’s most famous tractors. A 1938 handshake agreement with another industrialist genius, Henry Ford, set the stage for a new era in tractor manufacture on two sides of the Atlantic. Read part I.
After shaking hands on the Ford agreement in 1938, Harry Ferguson needed to extract himself from his contract with David Brown Co. Things had not gone well with the Ferguson-Brown during a time when the Fordson was gaining popularity. Moreover, horse-drawn implements could be adapted for use with the Fordson; the Ferguson-Brown required its own dedicated implements. Ferguson had wanted to increase production and reduce prices, but David Brown wanted to build a bigger tractor.
Designs for a new tractor were advanced to Ferguson, who claimed they breached the original Ferguson-Brown agreement. Both parties wanted to dissolve the business, so a deal was struck. David Brown bought out Ferguson, ceasing production of the Ferguson-Brown Type A tractor. The David Brown VAK1 tractor was launched in 1939. Serial numbers of Ferguson-Brown tractors from 1936 to 1939 show that 1,354 tractors were produced.
Launch of the 9N
With the David Brown business resolved, Ferguson moved his family to America, arriving Jan. 14, 1939. Henry Ford’s team had tested three prototype tractors incorporating the Ferguson System at the Ford family plantation in Georgia, so Ferguson and his team worked on the final model of the production tractor.
Ferguson and Sherman Bros., Evansville, Ind., set up Ferguson-Sherman Mfg. Corp. (renamed Harry Ferguson Inc. in 1941) to market the tractor and supply implements. The first public demonstration of the Ford-Ferguson 9N was made on June 29, 1939, in front of invited representatives from 18 countries and 30 American states, as well as several reporters. A July 3, 1939, account in Time magazine gushed: “That the tractor is as simple as a motorcar, can be maintained by any farm hand, operated by any schoolboy. That it will plow, harrow, drag a seeder, pull a wagon better than any tractor ever made, far better than a horse which is, as Thomas Edison said, ‘the poorest motor ever built.’ That inventor Ferguson will go down in history with Edison, Alexander Graham Bell and the Wright brothers.”
By 1942, the Ford-Ferguson 9N had captured 20 percent of the U.S. tractor market despite retailing at $585 ($7,824 in today’s terms), some $100 more than the Farmall Model A. The tractor had a 4-cylinder vertical Ford engine, basically half a Mercury VS. Many internal components, including the pistons, were compatible with parts used in Ford’s V-8 automobiles of the time. The engine produced 17 hp on the drawbar and 23.5 hp on the belt in Nebraska tests. The front axle and hydraulic linkage were Ferguson team designs, and the design incorporated the patented Ferguson System. Adapted for the British market, the 9NAN was fitted with a Holly 295 vaporizer to enable it to run on tractor vaporizing oil (TVO).
The Ferguson system was initially unpopular, as U.S. farmers could not use their existing implements with a Ford-Ferguson 9N. But America’s entry into World War II drove demand for increased food production, and tractor sales got a boost as a result. About 40,000 9N tractors were sold in 1941. War shortages temporarily halted production at Ford’s Rouge River tractor plant, Dearborn, Mich., in 1942, but Ferguson persuaded U.S. President Franklin Roosevelt to attend a tractor demonstration. The president ended up purchasing a tractor and implements for his Hyde Park, N.Y., farm and guaranteed availability of materials to resume tractor manufacture.
During the war years, Ferguson dealers and distributors were encouraged to locate old Fordsons that could be melted down to produce new Ford-Fergusons. Limited copper supplies led to a model with no electric starter motor, and rubber shortages meant that some tractors were put on steel wheels. Some of the World War II-era tractors (including the 2N) had magneto ignition because of starter motor battery shortages.
Ferguson’s plans dashed
Ferguson expected the 9N to be built at Dagenham, England, but the war intervened. Prior to the war, Ford U.K. made an agreement with the British government to produce large numbers of Fordson tractors to be held in stock by dealers. In the event of war, these tractors would be sold to help increase food production and the Dagenham factory would work at full capacity to produce more tractors.
The outbreak of war, however, caused immediate and prolonged demand for Fordson tractors, and the government would not sanction a change of production from Fordson tractors to the new Ford-Ferguson System tractors at Dagenham.
After the war, Ferguson still expected Ford U.K. to manufacture a Ferguson System tractor, but he was thwarted again. Ford U.K. directors were reluctant to work with him, and a different tractor was built at Dagenham. The Fordson E-27N was launched in March 1945. The E-27N had an upgraded in-line, 4-cylinder, side valve engine that produced 30 hp, three forward and one reverse gears, conventional clutch and rear axle drive. It was offered in four versions, each with different brakes, tires and gear ratios. A Perkins diesel engine model was offered in 1950.
Small numbers of Ford-Ferguson tractors and implements saw wartime service in England under the American Lend-Lease Act. But when Ford U.K. would not work with him, Ferguson returned to England in 1945 with just one thing on his mind: finding a British manufacturer for his tractor.
Birth of Banner Lane
During World War II, the British government financed construction of “shadow factories” to increase aircraft and engine production. New factories were constructed at a distance from existing facilities, decreasing the risk of them being bombed, but still near manufacturing areas where a skilled workforce was available.
In Banner Lane, Coventry (in England’s West Midlands), the Standard Motor Co. shadow factory, which produced more than 20,000 Bristol Aero engines for wartime use, stood empty. Standard’s Managing Director, Sir John Black, was already familiar with the Ford-Ferguson tractor and knew Ferguson needed a U.K. factory. A meeting was arranged at Claridge’s Hotel, London. Over dinner, the two men agreed that Standard Motor would have the rights to manufacture Ferguson tractors anywhere except North America, South America, Central America and the Philippines, with Ferguson having full control of design, development, sales and service.
When post-war steel shortages threatened the project, Ferguson visited Sir Stafford Cripps, president of the Board of Trade, and arranged a tractor demonstration for senior members of the British government and a representative of the Chinese government. On the strength of that demonstration he got his steel, enough to build 200 tractors a day. On July 6, 1946, the very first TE-20 (Tractor England) was produced at Banner Lane.
Early versions were powered by an overhead valve, 24 hp gas engine manufactured by Continental Motor Co. of Michigan. Equipped with four forward and one reverse gears, the starter was engaged by using the gear lever; with its 6-volt electrical system, a starting handle was absolutely essential.
Ford-Ferguson partnership grows rocky
By the mid-1940s, relations between Ferguson and Ford were strained. The refusal of Ford U.K. to build Ferguson System tractors was a major setback. Ford’s U.S. accountants were convinced the tractor business was unprofitable and, to their horror, Ferguson wanted U.S. production increased to a million tractors per year. With the death of Edsel Ford in 1943, Henry Ford again assumed the company’s presidency. In September 1945, Henry Ford’s grandson, Henry Ford II, took the helm; the company founder died in April 1947.
Henry Ford II faced a daunting task. The company had suffered financially during the war, and he disliked the fact that his company produced a tractor that was sold by another organization over which he had no control. He announced that Ford would introduce an improved version of the 9N and establish its own distribution and marketing company, effectively terminating any contract with Ferguson.
Fortunately, Ferguson had an agreement in place with Sir John Black and Standard Motor to produce tractors in the U.K. He kept his American distribution company running by importing TE-20 tractors and set about finding a company to produce tractors for the American market. While the first TE-20s were coming off the production line in England, Ford Motor Co. set up its own tractor distribution business in America, Dearborn Motor Corp.
At the same time Harry Ferguson Inc. lost its U.S. tractor supplier, implement manufacturers and the dealer network started to switch to Ford. Ferguson desperately needed a U.S.-based manufacturer, but the launch of Ford’s new tractor, the 8N, in 1947 changed everything. The 8N tractor incorporated Ferguson System hydraulics and linkage, including patented features and 4-speed transmission. Ford was using Dearborn Motors to market what was effectively a Ferguson System tractor.
Ferguson was undergoing treatment in a Swiss clinic at the time but, in November 1947, he was well enough to travel to America. Ford had anticipated Ferguson might take action against the American company. But instead of suing for breach of patent rights, Ferguson’s lawyers brought a case under American antitrust laws, suing Ford for three times the value of his American business (which was valued at $80 million) plus patent infringement on tractors already sold by Dearborn Motors, for a total of $251,111,000 plus legal fees. “It’ll be a grand fight,” Ferguson predicted.
During Ferguson’s years with Ford Motor Co., 306,181 Ford-Ferguson System tractors were built, and Harry Ferguson Inc. became one of the biggest agricultural equipment companies in the U.S. But a Dec. 2, 1946, issue of Time reported that, “Last week young Henry Ford II announced that the seven-year deal was off. Neither Ford nor Ferguson gave a reason for the split.” The general consensus was that Ford decided it was “not getting enough out of the deal.”
Ford announced the launch of a company headed by General Motors Vice President Frank R. Pierce to build the Ford 8N tractor and a line of implements. Meanwhile, Ferguson manufactured 46 farm implements for his tractors in the U.S. The implements were made by 105 subcontracting plants tailoring their location to the market.
Issuing a challenge
According to press accounts, Harry Ferguson Inc. turned over about $10 million a month, half of which was generated by sales of Ford-Ferguson tractors. When asked if he was worried about competition from the new Ford tractor, Ferguson Inc. President Roger Kyes laid down the gauntlet. “I recall that we have a number of patents,” he said.
The Ford-Ferguson agreement ended on June 30, 1947, three weeks before Ford’s new 8N was demonstrated to 300 guests at Deer Lake Farms near Detroit. News reports predicted stormy weather, noting that, “those who saw the new tractor thought it looked so much like the Ford-Ferguson machine that many predicted a patent squabble.” But the tractor sold well, and many Ferguson Inc. dealers switched to Dearborn Motors. In 1947, to keep his American company going, Ferguson shipped 25,000 British TE-20s to the U.S., solving the problem caused by the collapse of the Ford agreement, and justifying Sir Stafford Cripps’ efforts to supply steel to the Banner Lane factory.
In January 1948, in New York’s federal court, Harry Ferguson sued Henry Ford II, Dearborn Motors Corp., Ford Motor Co. and others for $251 million in damages, claiming patent infringements and conspiracy to monopolize the farm tractor and implement business. Ferguson claimed Ford Motor Co. had “recognized the validity (of his patents) and placed the statutory patent notice on all tractors manufactured down to June 1947.” He claimed triple damages on the 37,000 tractors Ford manufactured since the split and other damages for having rendered the business of the Ferguson Co. virtually unprofitable.
Ferguson purchased a 72-acre factory site in Detroit and built his own tractor plant, which he named Ferguson Park. American component suppliers were found and on Oct. 11, 1948, Harry Ferguson returned to America to drive the first tractor off the production line. Based on the TE-20, it was named TO (Tractor Overseas). By late 1948, production was up to about 100 tractors a day. Between 1948 and 1954, 140,000 TO-20 tractors were built in Detroit.
TE-20 a hit in the U.K.
Ferguson settled in the Cotswolds in west central England, buying Abbotswood, a beautiful home set on 600 acres. The rural setting allowed the opportunity to conduct actual field research. Spotting a TE-20 at work in a field, he’d go speak to the farmer, occasionally helping with mechanical repairs, all the while remaining anonymous.
Sales of the TE-20 flourished, partly due to an excellent U.K. dealer network. Ferguson visited dealerships but was not an easy man to please. He had a reputation for being a perfectionist obsessed with punctuality and cleanliness. Staffers were expected to be well presented and completely knowledgeable about both tractors and implements. He always carried a notebook and pencil and expected his staff to do the same. By 1949, more than 100,000 TE-20 tractors had been manufactured. At one point that year, Ferguson tractors held 78.4 percent of the wheeled tractor market in the U.K.
Ferguson also had a genius for publicity. Some of his exploits are legendary, including a 1948 cocktail party he hosted for overseas buyers. At that event, a tractor and trailer were displayed in a ballroom at Claridge’s Hotel in London. As Ferguson praised the tractor’s maneuverability, a Russian guest was overheard questioning its performance on a small plot of land. Ferguson jumped onto the tractor, demonstrating how well it operated in a small space before driving through the hotel lobby, down the entrance steps and onto the street.
In America, the legal battle continued. Ford wanted the case heard in Detroit, but Ferguson’s team argued that Ford’s massive presence there made it difficult to select an unbiased jury. The U.S. Supreme Court decided to hear the case in New York. In July 1948, the process of gathering depositions got underway. Harry Ferguson traveled to America to give evidence. Recorded over the course of three months, his deposition filled nearly 11,000 pages.
In July 1949, in a maneuver designed to get Ferguson to settle the case, Ford’s legal team entered the counter-claim that several of Ferguson’s patents were actually invented by Willie Sands. The unfounded accusation appalled Ferguson, who described stealing another man’s invention as “one of the foulest things a man could do.”
Henry Ford II traveled to England for discussions with Ferguson, meeting at Claridge’s, but no agreement was reached and he returned to America to begin giving evidence. In 1950, depositions were taken in London, Leamington Spa and Belfast. Ford paid for its legal team and the judge to travel to the U.K. That autumn the case looked to be close to trial, but the following year it became clear it would be a protracted process and Ferguson’s team had something else to consider. Their argument was partly based on the charge that Ford was monopolizing the tractor business, but by 1951, Ferguson’s U.S. sales reached $64.5 million, and the court dismissed the antitrust part of the claim.
An out-of-court settlement was reached in April 1952. Ford would pay Ferguson $9.25 million (equivalent to about $76 million today) for unauthorized use of his patents and alter its tractor design to remove any possible further patent infringements. Privately, Ferguson was dissatisfied with the outcome, writing to his lawyers that he believed Ford wanted to prolong the case until his patents expired.
The settlement was presented to the world’s press as a “David and Goliath” fight where the rights of the small inventor were upheld against the foe, large industry. The battle generated enormous publicity – and perhaps sales as well. That year, Ferguson tractors outsold all other brands of wheeled tractors not only in the U.K., but throughout the Eastern hemisphere.
The TE-20 was successful because of its excellent design and a knowledgeable dealer network that gave well prepared demonstrations. Harry Ferguson Ltd. ran a sales and service training school to train dealers at Packington Hall. Later, in 1949, the Ferguson School of Mechanical Farming was established at Banner Lane. FC
Next month in Farm Collector: In the final part of Jane Brooks’ series on the life of Harry Ferguson, the genius inventor dabbles in international economic policy, courts a new business partner and continues to break new ground in evolving technology.
U.K.-based agricultural journalist Jane Brooks specializes in tractors and machinery. She is a regular contributor to enthusiast’s magazines such as Tractor & Machinery, Old Tractor and Vintage Tractor. When not writing, Jane finds time to get in a bit of tractor driving at home in Warwickshire, where she farms with her husband, Stephen. E-mail her at email@example.com .