Inventor Harry Ferguson turns to Massey-Harris in final partnership
In the final installment of a three-part series, Jane Brooks concludes her look at the life and times of Harry Ferguson. In the early 1940s, the brilliant inventor turns his energies to international economics – but soon enough faces challenges close to home. Read part I. Read part II.
With the lawsuit behind him, and his American plant continuing to produce the TO-20, Harry Ferguson abandoned the life of a nomad and returned to the tranquil setting of Abbotswood, his Cotswolds haven. After his epic fight, Ferguson was finally able to concentrate on the business of tractor manufacture and promote his rather naive view of international economics.
He was very interested in the potential impact of farm mechanization on reducing poverty and hunger. In 1943, he spoke at the first United Nations Conference on Food and Agriculture, held in Hot Springs, Va. "I know many of you represent countries where the farms are very small," he told conference attendees. "The smaller the farm, the more urgent the need for mechanization. The small farmer has a life of slavery and poverty. This is all wrong. Agriculture should have been the first industry to be modernized and not the last."
Belief in low prices
In 1947, Ferguson outlined his solution to the problem in a paper titled The Price Reducing System. "My whole economic philosophy and all my efforts are guided by the knowledge that the best way to improve the total economy will be through cutting the costs of production of agricultural products, which control the cost of living," he explained. "There must be implements of an altogether new type which will produce, for the first time in history, enough food to feed all the people of the world. And, also, produce from the land – the source from which all wealth comes – a new wealth to enrich the world.
"Our plan for prosperity, security, and peace can be stated in two simple propositions," he wrote. "Make the good earth produce more than enough to keep its whole population in comfort and contentment. And what is equally vital, produce ‘more than enough' at prices which the people of the world can afford to pay. That is our ambition. That is the course to which I am wholly dedicated."
With a belief that inflation caused worldwide unemployment and poverty, which led to the rise of Communism, Ferguson's solution was lower prices, which he believed would lower inflation starting with agriculture. By mechanizing agricultural production, he reasoned, food prices would fall, reducing want and poverty and halting the rise of Communism.
In Britain, the Labour government started a program of nationalization. American aid was vital to post-war recovery efforts. Ferguson opposed nationalization of the steel industry and, in 1949, wrote to each member of Parliament and every Conservative and Liberal peer, lobbying for his position. However, it was generally accepted that Ferguson was an idealist and his system doomed to failure. Ultimately, the only place his price reducing system was adopted was in his own company.
Ferguson's faith in his pricing system affected the company's performance, although demand for his tractors was good enough to sustain any price rises caused by additional production costs. But such increases were not passed on to the customer, resulting in insufficient profits to build up a safety net of working capital.
Looking for a buyerBy that time, the 3-point hitch had been adapted and used by other manufacturers. But the post-war boom, particularly in America, had run out of steam. By the early 1950s, demand for new tractors dropped, affecting farm machinery manufacturers throughout North America. Companies such as Ford weathered the storm, but Ferguson's position was weaker. In 1952, he decided to sell Harry Ferguson Inc. but retain the Coventry operation. He set his sights on Massey-Harris as a buyer.
At the same time, Ferguson engineers were developing a mounted combine for use behind their tractor and Massey-Harris wanted to manufacture it at its Kilmarnock factory in Scotland. In June 1953 an outline agreement was reached for manufacture of the combine, allowing Massey-Harris to use the Ferguson tractor engine in some of its harvesting equipment.
Massey-Harris President James Duncan, who guided the company to success during the late 1940s and early '50s, arranged to meet the senior management of Ferguson Ltd. to discuss the combine. In a last-minute change of plans, Duncan was invited to dine at Abbotswood. Ferguson first offered him a 50 percent partnership in his company. When Duncan declined that offer, Ferguson asked him if Massey-Harris was interested in buying his American business. Duncan said he would consider the proposal.
Duncan visited Detroit and then wrote to Ferguson, in July 1953, suggesting as a first step to a closer union that the two companies should coordinate their efforts in North America. He proposed a meeting with Ferguson in England on Aug. 4, a suggestion Harry Ferguson accepted. A new tractor, the LTX (a larger version of the TE-20) was under development in Coventry and Duncan was invited to a demonstration.
Duncan, his wife and members of the Massey-Harris team arrived in England and headed to Abbotswood, where the Duncans dined with the Ferguson family. After lunch, the two men headed to the summer house, where Ferguson stunned his guest by offering to sell his entire agricultural business to Massey-Harris. Duncan rebounded quickly. He made an immediate offer, Ferguson made some notes on the back of an envelope and the deal was done.
With the flip of a coinThe two men agreed that Ferguson would receive book value for his company's Massey-Harris shares worth some $16 million ($130 million in today's terms) in exchange for the operating Ferguson companies. The rest was left for lawyers to settle. During the deal's closing stages, it became apparent that Ferguson's interests in France had been forgotten, undervaluing the business by $1 million. Duncan was at his limit with the offer of $16 million; Ferguson wanted $17 million.
In the end the irascible Irishman suggested they settle the matter on the toss of a coin outside the Lygon Arms at Broadway in the Cotswolds, using a coin (a half crown) supplied by John Turner, Ferguson's financial advisor. Ferguson called "tails" and lost. The coin was later mounted on a silver cigar box engraved with "The $1,000,000 Coin" and a further inscription, "To our friend and partner Harry Ferguson, a gallant sportsman."
The merger of Massey-Harris and Harry Ferguson Ltd. became official on Aug. 17, 1953, and Massey-Harris-Ferguson Ltd. came into being. Ferguson received 1,805,055 Massey-Harris shares, making him the single largest shareholder. He was named chairman of the new company and retained control over design of Ferguson equipment. Although the deal was presented as the amalgamation of two businesses, in essence, Ferguson sold his company to Massey-Harris.
Massey's proud tradition
Massey-Harris traced its start to 1847, when Daniel Massey started a farm repair and equipment business in Newcastle province of Canada West (now Ontario). Ten years later, in 1857, Alanson Harris started manufacturing farm equipment in Brantford, Ontario. Both companies became industry leaders and competed against each other in the tough Canadian machinery market for 30 years. The two companies merged in 1891, forming Massey-Harris, a formidable agricultural business.
Within 20 years the firm had entered the power farming market. In 1917, the company sold U.S.-made Bull tractors to Canadian farmers, a short-lived arrangement in the wake of the failure of the Bull company. In 1919, Massey-Harris sold tractors based on the Parrett tractor built in Chicago. The company also marketed the Wallis 20-30 (manufactured by J.I. Case Plow Co., Racine, Wis.) under the Massey-Harris name. Massey-Harris purchased the Racine factory in 1928, and sold the J.I. Case Plow Co. name to the J.I. Case Threshing Machine Co. that same year.
Massey-Harris expanded into Europe, operating manufacturing bases in France and Germany. Massey-Harris bought an interest in the H.V. McKay Sunshine Harvester Co., near Melbourne, Australia, in 1930. In 1946, Massey-Harris began producing mowers and hay machinery at Trafford Park, Manchester, England, and in 1948 the 744 PD tractor went into production there. Based on the Canadian-built Massey-Harris 44, the English version was given the prefix "7" to denote where it was built; "PD" signified that it was fitted with a Perkins 6-cylinder diesel engine.
In the years following World War II, Massey-Harris equipment outsold Oliver, Cockshutt, Case and Minneapolis-Moline, but tractor sales were weak. Other lines' tractors were more advanced and Massey-Harris needed new technology. The offer to buy out Ferguson was a golden opportunity. With the takeover completed, Massey-Harris-Ferguson immediately became the second largest agricultural manufacturer in the world behind International Harvester and ahead of John Deere.
All the new tractors offered 3-point hitch systems, Harry Ferguson was on the new board of directors, and the company continued to produce and market completely separate lines of tractors using both Ferguson and Massey-Harris brand names. Entirely separate dealer networks were operated for the two brands, confusing dealers and customers alike, as well as causing discord among Massey-Harris and Ferguson design teams.
Developing the LTXAt the time of the takeover, Ferguson's Banner Lane engineers were developing a new tractor, the TE-60 or LTX (Large Tractor Experimental) and a few prototypes had undergone extensive testing. During the war years, Ferguson and Ford had done experimental work on a large Ferguson System tractor but never made a production prototype. The planned new tractor became one of the most important projects undertaken by the Banner Lane engineering department.
The Ferguson team designed the LTX engine. The chassis and drive train were designed to take up to 100 hp, but the first models were to be in the 45 to 60 hp range. In 1949, the tractor and a range of implements were tested at the Hyatt family farm near the Warwickshire village of Ufton in England. It is believed that six prototypes were tested at the farm. One of the six was left there and used until about 1970, when it suffered mechanical problems. The farmer contacted Massey Ferguson at Banner Lane about his "Big Fergie." Company officials are reputed to have collected the tractor, taken it to Banner Lane and subsequently cut it up.
The LTX was at an advanced stage when, on May 13, 1953, Ferguson's British distributors received a letter requesting orders for the new 48 hp tractors for delivery in spring 1954. Ferguson expected the tractor to go into production, but senior management decided the tractor was unsuited to the American market because they could not produce a row-crop version. Instead, the decision was made to improve the American-designed TO-35 in lieu of producing the LTX. In 1954, the project was abandoned and Massey Ferguson is said to have destroyed all records, parts and prototypes (with the exception of the Ufton tractor).
Morale suffered at Banner Lane, where many Ferguson engineers felt let down and suspected a bias toward Massey-Harris engineering and products. Parallel dealer networks continued to operate independently, and pricing of Banner Lane tractors was a contentious issue. Sir John Black's Standard Motor Co. owed much of its post-war prosperity to the tractor business. After negotiations with Ferguson and Massey-Harris's Canadian management, Black agreed to a £20 ($56 U.S.) reduction to tractor manufacturing costs and signed a contract to manufacture tractors for another 12 years.
Instead of reducing the tractor price, however, Duncan reinvested the savings into the company. This infuriated Ferguson, who wanted it passed on to farmers. Ferguson had believed his price reducing system would be adopted as company policy when the companies merged.
Another failed partnershipIn 1950, Ferguson set up his own automotive research facility, Harry Ferguson Research, to design a four-wheel drive car, the R5, which he thought would improve road safety. If, during the buyout, Duncan and Massey Ferguson management assumed the four-wheel drive project would fill Ferguson's time, they were very much mistaken.
Expecting to exercise the complete authority given him over the design of all Ferguson equipment and to be consulted in all matters, Ferguson came to believe Massey Ferguson design engineers were sidelining his suggestions. Those concerns were compounded by the fact that his price reducing system was not adopted, and by the final indignity, the decision to abandon the LTX.
In April 1954, he offered his resignation, which became official on July 7, 1954. Massey-Harris purchased Ferguson's shares for about $15 million (roughly $122 million today). Terms of the agreement blocked the 70-year-old Ferguson from re-entering the tractor business for five years. During 1953-'54, Ferguson underwent shock treatment for the depression that had shadowed him as an adult. His hearing was deteriorating and he suffered increasingly from insomnia.
A new focus
Still, Ferguson pressed on with the R5 car project, incorporating a torque converter design purchased from Italian Count Teramala for about £500,000 ($1.4 million). The car had four-wheel drive, anti-skid brakes and electric windows. Three prototypes were built: a salon and two estate versions. One of the estate cars built in 1959 had a supercharged flat-four engine that lapped at 100 mph in testing. (Both car and engine are now displayed at the Coventry Motor Museum.) Ferguson was unsuccessful in finding a manufacturer for his car, but after attending a motor racing meeting at Silverstone Circuit he decided to prove the importance of four-wheel drive by building a Formula 1 racing car: the front engine, four-wheel drive Ferguson P99 (Project 99).
In 1958, the directors of Massey-Harris-Ferguson sent him a Ferguson 35 to use on his estate. Ever the inventor, Ferguson decided its design could be improved with the use of a limited-slip differential and transmission by means of the Teramala torque converter. He invited Massey President Albert Thornbrough to visit him. Thornbrough accepted the invitation and offered help in developing a new tractor, but Ferguson wanted total control and nothing came of it.
Redesign of the Ferguson 35 was his last project. It was Ferguson's habit to keep to a strict timetable. Each morning at precisely 8:30 a.m., for instance, he joined his wife for breakfast. On Oct. 25, 1960, he failed to appear. The news soon broke that Harry Ferguson had died at home from an overdose of barbiturates. His body was cremated and his ashes were scattered from an aircraft over his beloved home of Abbotswood.
A giant in the engineering world, Harry Ferguson's lasting legacy was the "Little Grey Fergie." His tractors have literally been to the ends of the earth: On Jan. 4, 1958, a Ferguson driven by Sir Edmund Hillary was the first vehicle to reach the South Pole as part of the Commonwealth Trans-Antarctic Expedition. Tractors throughout the world use the converging 3-point hitch and weight transfer system based on the principles of the Ferguson System.
In the hands of Stirling Moss, the Ferguson P99 won the Formula 1 Oulton Park Gold Cup in 1960. The four-wheel drive system was also widely used on rally cars. And although he did not live to see it, Ferguson's dream of incorporation of a four-wheel drive system into a production car was fulfilled when the four-wheel drive Jenson CV8FF (later the Jenson FF) made its debut at the 1965 Earls Court Motor Show. FC
U.K.-based agricultural journalist Jane Brooks specializes in tractors and machinery. She is a regular contributor to enthusiast 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 firstname.lastname@example.org.
The author gratefully acknowledges all who assisted with her research on this project, including AGCO, which provided access to corporate photo archives.