Going Head to Head: Deere and International Harvester

Competition between Deere & Co. and International Harvester spurred unprecedented innovation in agricultural equipment.

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courtesy by Robert N. Pripps
The John Deere Waterloo Boy Model N tractor had a 2-speed transmission, and most had automotive-type steering. It was sold until 1924, when Deere’s Model D was launched.

In the early days of power farming, the competition was between internal combustion and steam. Hart-Parr became the champion for the internal combustion, or “gas engine” tractors, but customers did not immediately beat the proverbial path.

Steam competitors were roasting the gas tractor upstart and became so vociferous that customers began to get suspicious. Charles Hart is quoted as saying, “If it hadn’t been for the free publicity given by our friends, the enemy, I really don’t know if we should have pulled through.”

It is a known fact in business that competition from “our friends, the enemy,” can either make a company stronger, or it can wipe it out. The competition between Deere & Co. and International Harvester was a fact of life throughout the 20th century. It was, in great part, the driver in providing the farmer with good equipment at a reasonable price.

Fledgling company flexes its muscle

In the eyes of Deere & Co. leadership, International Harvester was an upstart when it was founded in 1902. After all, Deere had been in business almost 70 years by then. Further, as the name implied, International built harvesters, an outgrowth of McCormick’s original invention, while Deere was a plow-making company. Some Deere dealers sold both lines. In fact, both companies’ branch houses were also handling lines of wagons, haymaking implements, spreaders and planters.

By 1906, however, International Harvester took a more aggressive stance, encouraging product line exclusivity from their dealers. IH, as it came to be called, added to its lines farm wagons, gas engines and manure spreaders by buying the companies that made them.

This alarmed Deere & Co. management, which feared that Deere was a small enough corporation to be a tempting acquisition target by International Harvester. William Butterworth, then chairman of Deere, acquired Fort Smith Wagon Co. in 1907, and in that same year, formed John Deere Plow Co., Ltd., Canada. Deere also made an attempt to buy Frost & Wood, a Canadian manufacturer of harvesters (binders). Although the attempt was unsuccessful, it alarmed International Harvester’s general manager, Alexander Legge. Direct meetings between IH President C.H. McCormick and Deere’s Butterworth did not allay International Harvester’s fears, especially after Deere wooed away one of the company’s top harvester designers.

Creating a full-line company

Deere then began a policy of acquisition. Companies making haying equipment, spreaders, planters, cultivators, elevators and shellers were added. Manufacturing of some of these outfits was moved to Moline, Illinois, Deere’s headquarters, and some were left in place. Finally, in 1912, ground was broken in East Moline for a harvester plant. With that, Deere took on International Harvester head-on. It was a foregone conclusion that, since International Harvester was number one in tractors, that would be Deere’s next move.

Today, it is hard to believe that the Deere name is virtually synonymous with “farm tractor,” when it was such a struggle for the company to get into the tractor business in the first place. After years of in-house experiments, Deere purchased Waterloo Gasoline Engine Co. in 1918. The Waterloo company had already produced a successful 6,000-pound tractor called the Waterloo Boy. After the acquisition, the Waterloo Boy was an immediate success for Deere. It was the first tractor to pass the newly instituted University of Nebraska Tractor Test, and it went on to a 14-year production run.

In 1920, Deere sold more than 5,000 Waterloo Boy tractors. But Henry Ford, who had also begun Fordson production in 1918, answered by selling 67,000 tractors in 1920 alone. The Fordson was a phenomenon in the farm equipment world. The Fordson was a brainchild of Ford’s founder, a farmer at heart who became the automobile magnate who went on to perfect mass production and marketing. Ford sold no other farm-related products (except, you might say, the Model T car), and even sold the tractor through the car dealerships. The tractor had shortcomings, it is true, but price was not one of them.

Price wars devastate manufacturers

World War I ended in 1919, but its aftereffects, in the form of a sharp economic depression, hit in 1921. The agricultural industry was especially hard hit: Deere & Co. had scheduled production of 40 Waterloo Boys per day for the last half of 1921, but ended up selling only 79 in the entire year. Ford had scheduled production of 300 Fordsons per day for 1921. By the time Ford realized what was happening, dealers’ lots were awash in tractors.

Henry Ford responded with a devastating price war. He first cut the Fordson’s $785 price to $620. Other tractor makers followed suit, including Deere & Co., which dropped the Waterloo Boy’s price from $1,050 to $890. Ford countered by cutting the Fordson’s price further, all the way to $395. That was the end of the line for many tractor makers. Ford managed to sell 35,000 Fordsons in 1921; in 1922 sales rebounded to 67,000. In 1923, more than 100,000 Fordsons were sold.

Committed to the tractor business, International Harvester matched Ford’s price cuts. “And,” as Alexander Legge memorably said, “to make it good, we’ll throw in a plow.”

Birth of the all-purpose tractor

The competition from Ford spurred International Harvester’s engineers to redouble their efforts to build a tractor that could do things the Fordson could not. The Fordson could plow and power belt-driven implements, but it was not useful in crop cultivation, nor did it have the rear power take-off shaft required by the new harvesters. International Harvester engineers saw their real competition came not only from the Fordson, but also from the horse. They needed to replace all the horses on the farm, not just some of them. The result was what became known as the Farmall, the “all-purpose” tractor.

Despite the urgency, International Harvester proceeded carefully with elaborate and thorough testing, making needed changes and improvements on successive test items. In 1924, some 200 pre-production versions were sold. Field men closely observed as farmers employed them in their routine work.

When Deere & Co. acquired the Waterloo company, they found Waterloo engineers hard at work on a Waterloo Boy replacement that looked more like a Fordson and less like a steam engine. Deere quickly developed that concept into its famous Model D standard tread plowing tractor, a model that would have a 30-year production run beginning in 1923. While the Model D was a worthy replacement for the Waterloo Boy, it was nothing like the Farmall of 1924. Deere launched an all-out campaign to develop an all-purpose tractor, which they expected to call the Model C.

The Deere Model C began life in 1927 as a tricycle high-clearance tractor like the Farmall, but, as cultivation of crops such as corn was a prominent requirement, they switched to a wide-front with an arched axle in order to facilitate cultivation of three rows at a time (straddling the center row), rather than the two rows the narrow-front Farmall tackled. The three-row concept was not accepted in some areas, so in typical Deere commitment to give customers what they wanted, several tricycle-configurations were offered. The Model C designation soon became the Model GP, for General Purpose; partly to eliminate confusion with the similar sounding “D” and to make sure there was no confusion about it being an all-purpose machine.

Other “long-line” farm implement companies offered competitive all-purpose tractors. By 1929, International Harvester held first place with a 52% share of the business; Deere & Co. was second with 21%. Case, Oliver, Minneapolis-Moline, Massey-Harris and Allis-Chalmers, in that order, shared the rest.

A time of fierce loyalties

In 1928, John Deere’s great-grandson, Charles Deere Wiman, became president of Deere & Co. An engineer at heart, Wiman was never satisfied with the Model GP tractor. Further, International Harvester’s dominance in the marketplace was worrisome. The combination of the 1929 financial crash, the Great Depression and the Dust Bowl knocked the pins out from under the farming and farm products segment.

To make matters worse for Deere, Wiman had adopted a policy of financing farmer purchases of Deere equipment. Those farmers, however, had spiraled into subsistence farming and had no cash to pay off their equipment. In 1931, further exacerbating Deere’s and Wiman’s concerns, International Harvester came out with an improved version of the Farmall, the F-20, and introduced a larger version, the F-30.

The gutsy Wiman then bet the company, deciding to carry the farmers for as long as it took, and launching two new John Deere tractor models — the Model A and Model B — to compete with International Harvester’s offering.

Deere’s Model A and B were both of the “row-crop” configuration (high-clearance, dual tricycle front wheels) like the Farmall. The Model B went head-to-head with the Farmall F-20, and the Model A competed head-on with the F-30. Each brand had features that the other had to counter, and both had loyal followers from previous experience, like no present-day brands enjoy. Both companies also continued to produce specialty versions of their row-crop tractors (high-crop, wide- and single-front wheel, etc.), as well as standard-tread, orchard and industrial models.

A fatal misstep

As World War II loomed in the late 1930s, the effects of the Great Depression abated. Optimism and new styling generated increased sales for both companies. International Harvester differentiated its F-20 and F-30 from their “styled” versions with new names: The F-20 became the Model H and the F-30 became the Model M. Deere & Co. stayed the course with its Models A and B.

International Harvester moved into the diesel engine category with production of a larger, standard-tread tractor in the mid-1930s (Caterpillar was first with a diesel crawler tractor), but in the mid-1940s, International countered with introduction of its diesel version of the M, the Model MD. Deere & Co. did not respond with a diesel of its own until 1949.

Competition continued unabated into the mid-1950s. International Harvester adopted a more aggressive marketing strategy and introduced the partial-range power-shift called the Torque Amplifier. The marketing department then overran the company’s engineers, insisting on increasing the power of the tractors without considering the stresses on the drive train. It was a serious misstep, and one that contributed to the eventual downfall of the company.

The launch of a New Generation

Deere & Co., headed by family members related to the company’s founder, was more concerned with reputation than profits. The tenure of John Deere’s great-grandson came to an end, though, with his death in 1955. Wiman’s last official act was selecting his replacement: his son-in-law, 40-year-old William Hewitt.

Hewitt had experience in the tractor business, had a college degree, and had been an officer in the U.S. Navy. When he took over the company, he found on his desk an announcement for a new International Harvester product. The product did not catch his attention, but the slogan at the bottom of the page did: “Not Content To Be Runner-Up!” Yes, he thought, we’ve been content to play catch-up, and that’s got to stop.

At that time, Deere engineers were developing plans for 4- and 6-cylinder engines to replace the venerable 2-cylinder engine that had been the company’s virtual trademark. Cloaked in secrecy, that work took place at a remote location. Meanwhile, Deere marketing planned a grandiose “Deere Days in Dallas” announcement of the company’s new multi-cylinder tractors for 1960. Further, in 1959, Deere had unveiled its mighty, 6-cylinder, 20,000-pound articulated Model 8010. While the behemoth was not a success (the small number of tractors sold were subsequently recalled), its impact on the marketplace was significant.

Market buffeted by relentless challenges

International Harvester, though hampered by continuing embarrassment over problems with differentials and crankshafts, opted for improvements such as a proper 3-point hitch and even full hydrostatic drives. Competition again seemed equal. But then final drives began breaking on the company’s 460 and 560 models. The failures were attributed to insufficient testing and a rush to market by marketing.

By the late 1960s, changes in International Harvester management and engineering resulted in a very good line of up-to-date tractor models, including some big, articulated 4-wheel drives acquired from Steiger, and Harvester’s Farmall Model 806, considered by many to be the world’s best farm tractor.

Deere & Co. countered model for model, only to run into global political and financial problems of the 1980s that were crippling the industry. Increasing interest rates and inflation caused farmers to realize that they could buy for less today than it would cost tomorrow, but then sources of finance dried up. Profits and stock prices dropped, causing stockholder unrest, and a grain embargo against Russia contributed to over-production. Then, the final straw for International Harvester: The United Automobile Workers hit the company with a devastating strike.

International’s management, it seemed, was out of options. Then, in 1988, Tenneco made an offer for the Tractor & Implement Divisions that they couldn’t refuse. Tenneco already owned Case, a tractor and implement company also suffering in volatile times. Tenneco reasoned that putting these two companies together would create a viable entity. It indeed made for some strange “bedfellows,” but it worked well enough and some very good products emerged.

In 1999, the agricultural world was shocked when the giant Italian conglomerate, Fiat, acquired Case-IH, and added it to their agricultural business as CNH (Case New Holland) Global. This entity is currently known as CNH Industrial. Registered in Holland, the company includes the agricultural brands of Case IH, New Holland and Steyr, and industrial brands Case and New Holland Construction.

Meanwhile, Deere & Co. soldiers on, the only intact survivor of turmoil that was the agricultural revolution of the 20th century. FC

After 36 years in the aircraft industry, Bob Pripps returned to his first love and began writing about tractors. He has authored some 30 books on the subject and several magazine articles. Pripps has a maple syrup farm near Park Falls, Wisconsin. In harvesting the maple sap, he relies on a Ford Jubilee and a Massey Ferguson 85.

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