The Screaming Jimmy meets the Leaping Deere-almost
If you are 40 years old or older at some point while sitting at the coffee shop, outside church or just leaning against a pickup you may have heard a conversation back in the 1980s that went something like this.
“So, I guess John Deere is going to start building engines for semis.”
“Yeah, so when you go order a new Kenworth or Peterbilt besides having your choice of a Cat, Cummings or Dee-troit engine you can also order a John Deere.”
“Well with the farm economy the way it is I suppose they think they need to branch out.”
So was there any fire beneath this smoke? Yes, yes there was. Read this excerpt from an associated press article that appeared in newspapers on July 21, 1986.
General Motors Corp. and Deere & Co. announced plans Monday to merge the bulk of their diesel engine operations.
Pending government approval under antitrust laws, they intend to form a 50-50 joint venture company from elements of GM’s Detroit Diesel Allison division and Deere.
The company, which hasn’t been named, will design, manufacture and distribute diesel engines worldwide.
The automaker and the manufacturer of John Deere farm equipment have been moving in this direction for two years because of increasing competition and lagging diesel sales generally. GM has been marketing Deere diesels and the two companies have been engineering new products jointly.
The new company will make and market engines ranging from 50 horsepower to 2,000 horsepower. They are of the type used in medium- and heavy-duty trucks, agricultural machinery, construction equipment and stationary equipment such as electrical generating stations and oil-drilling rigs.
That almost looks like it’s a done deal doesn’t? So what happened?
In the early 1980s Detroit Diesel, then still a division of General Motors had a 3.2 % market share and was hemorrhaging money. The two stroke engines they were then building which were technologically similar to the engines Deere used in the 435 and 8020 tractors were unlikely to ever meet the new emissions standards that were coming. So the company approached Deere and Company who was having its own struggles due to the 1980s farm economy, about merging engine building operations. Plans and negotiations soon began. 4000 to 5000 GM workers would be assigned to the new company along with another 2000 from Deere. Company headquarters would be in Detroit and the Redford Township engine plant and Romulus parts distribution and engineering center would also be used. All of the other Detroit Diesel operations such as those building engines and Allison transmissions for light trucks as well as locomotive engine operations would not be affected. Deere plants affected would be the engine facilities in Waterloo, Dubuque and Saran, France.
Things progressed to enough of a degree that in March of 1987, a few brochures and ads were printed that included the new company’s name, Detroit Deere Corporation. However fortune seems to favor the swift and before anything could be finalized Roger Penske who a few years earlier had purchased Hertz Truck Leasing and was Detroit Diesel’s largest customer sent a team who along with GM’s John Farmer put together a 700 million dollar deal in a matter of weeks with General Motors holding 20% of the note for 10 to 15 years. The Romulus site was sold off and Allison Transmission was kept by GM, at least for awhile. Penske’s group also hammered out a new contract with the UAW that markedly decreased absenteeism and grievances. The new Detroit Diesel then went full speed ahead with production of the Tech 80 engine developed by Arn Vanderbock. That engine was later named the 60 series and market share soon climbed from 3% to 35%.
In 2000 Penske who was the largest Mercedes car dealer in the U.S., learned that the company wanted to get into the heavy-duty engine market and so he sold Detroit Diesel to Mercedes’ parent group Daimler AG which also happens to own Freightliner, Western Star and Sterling. Can we say “built in market”?
So where did that leave Deere and Company? Seems like Detroit Diesel lived happily ever after while Deere was left at the altar, though in fact Deere may have been getting cold feet anyway. Several who were employees of Deere at the time stated that the Detroit facilities were far below what Deere considered acceptable and considerable updating and repair would have had to have been done.
When the new 60 series four wheel drives were introduced in 1989 to the surprise of many they were powered by Cummins engines. Was this a result of not developing new larger engines because they assumed they’d be using a new Detroit –Deere power plant? We do know that Rich Windsor who was an engineer at Detroit Diesel left the company to be chief engineer on the development of Deere’s 12.5 liter Powertech engines or as some have called them “the DDC 60 series clones.”
Just like Deere’s talks with Massey in the 1950s, Caterpillar in the 1930s and probably some other near deals we’ve never heard of, we will never know what might have happened had Detroit-Deere Corporation come to fruition.
Special thanks to Chris Maloney for help with this article.