Talk about an overhaul. In early June, AGCO Corporation unveiled its completely retooled tractor manufacturing facility in Jackson, Minn. The 75,000-sq.-ft. expansion reflects the company’s commitment to North American commercial farmers and "build-it-where-it’s-used" manufacturing.
AGCO now has 15 acres of manufacturing capacity under roof at the facility, doubling the plant’s production capability from 1,000 tractors per year to 2,000 or more. In total, AGCO will add 18 models to its production line, which includes the Massey Ferguson 7600 and 8600 Series and Challenger MT500D and MT600D Series. Previously, these models were produced in Beauvais, France. Producing all of AGCO’s 140 to 290 PTO hp tractors for the North American market in the U.S. cuts "water time"—time spent traversing the Atlantic Ocean—by 30 to 45 days, says Bob Crain, senior vice president and general manager for AGCO North America.
Many of the components are still being produced offshore, but AGCO hopes to soon source most components in the U.S. "We’ll spend our first year locating suppliers here within the U.S., and within two years have a lot of the components produced here," says Martin Richenhagen, AGCO chairman and CEO.
Local pride. The Minnesota expansion is part of AGCO’s growth strategy. In 2012, it has poured $350 million into plant expansions and $300 million into research and development.
Key to the growth strategy is to locally source its products, Richenhagen says. Not only does this reduce shipping times and cross-border logistics, it reduces exchange rate and currency risk. Localized production also brings engineering closer to the farm.
For example, North American wheel spacings, electronics and precision farming applications differ from European and Asian needs. "By localizing manufacturing, our engineers learn firsthand what wants and needs local growers have. You can’t put a price on that," Crain says.
The Minnesota expansion adds 200 jobs, increasing the work force to 1,050, and adds $17 million to the local economy. The quality work force in Jackson is crucial to the expansion.
"Everybody here is geared toward agriculture. The number of our employees who farm 1,000 acres at night and on the weekends just blows my mind," Crain says. "They truly appreciate the need for quality manufacturing and assembly."
Down the line. The 18-station assembly line is a straight-line configuration that starts with the marriage of transmission, front frame and engine and ends with a fully tested, ready-to-drive-home tractor. In fact, the plant’s first customer after retooling did just that. He watched the tractor being built, then drove it home to his Jackson County farm.
Tractor components pass through four "quality gates" for comprehensive testing before proceeding down the line. "No product leaves a quality gate until it tests 100%," says Travis Van Genderen, materials manager for the Jackson facility.
The completed tractors then move to the test track. "Our goal," concludes Crain, "is to be perceived as being No. 1 in product quality in the industry."
For additional information, visit www.agcocorp.com.