Just over 30 years ago, a new farm equipment company arose, and over its history, it has pulled in other companies to create a diverse, ag-focused business that sells everything from grain bins to combines and sprayers to tillage tools. And for 2021, Agco Corp. has a new boss. Meet Eric Hansotia.
Hansotia (pronounced Han-SO-tia) is just the third CEO for Agco, and he's succeeding Martin Richenhagen, an outspoken industry leader who has doubled sales at the company and pushed the stock price up fourfold during his tenure.
Big shoes to fill, but Hansotia says he's "beyond excited" to take on the new role. And during the Fendt Global Media event in late 2020, Richenhagen gave Hansotia a rousing endorsement. Richenhagen, countering some worries that a non-German CEO might leave Fendt behind, answered that the idea was "as the Americans say, bullsh*t."
Hansotia, who recalls the comment with a smile, says, "It was done in the classic German style. Here's the problem and why the problem won't happen."
A new boss at a farm equipment company doesn't always immediately affect a farmer. If new, well-made equipment comes to market, the person at the top often means little.
But for a relatively new company like Agco, corporate culture is important, and for Hansotia, carrying on what has been started by his predecessors — Richenhagen and company founder, the late Bob Ratliff — will be important.
"I've been in the industry one way or another my whole life," says Hansotia, who grew up in central Wisconsin and as a youth worked on a crop and dairy operation. He was involved in 4-H and FFA, was a Wisconsin Junior Dairyman and is "all in on ag."
He earned his engineering degrees — a bachelor's and a master's — at the University of Wisconsin and later earned a MBA at the University of Iowa. Hansotia worked at John Deere from 1993 to 2013, when he left to join the Agco team where he went to work right away.
"I was involved in the acquisition of Precision Planting and worked on the development of the Ideal combine," he says. "We've had a two-year transition, and Martin was a tremendous help for me. He's brought Agco forward, and we want to build upon that work and continue. Every new leader has the chance to stand on the shoulders of those that came before."
Brands and the future
Agco, through its history, has acquired a wide range of companies from Hesston to Ag-Chem, from Massey Ferguson to Fendt. And over time, the company has worked to bring those brands together. How does the company make it work?
"We've done a lot of work on segmenting the market," Hansotia says. "There are certain customers that have certain types of equipment demands, then others have a completely different set of requirements."
Fendt fills one need with high-tech tools like its tractors, the new Ideal combine and the Momentum planter. A customer looking for more straightforward power might turn to Massey Ferguson instead. "It's like having different car brands," he says. "We go to market with the whole value proposition by brand — Fendt one way, Massey Ferguson another."
Hansotia uses a sports analogy for this. A team may head toward a goal but use different players. The wide receiver and the running back both move the ball, but in different ways. "They're all working together to be able to make the play," Hansotia says.
The early years of Agco involved a lot of those acquisitions, and while the company is on the lookout for purchase opportunities, the focus is changing.
"We don't have any obvious holes in our line," he says. "We have sprayers; we have tractors. We'll be looking at technology opportunities." And the startup field is rich with potential candidates that could bring value to the company.
As for the Challenger brand? Hansotia explains this brand has a solid place in the market for tracked machines and is an important part of the company. This is a targeted offering with key products for that customer segment.
Looking ahead with Hansotia
How dealers work with farmers is changing. The rising use of telemetry to help with service and changing data needs to enable enhanced management are important. As Hansotia looks ahead, he is focused on that technology.
"We have great examples of smart machines where the machine can sense its environment, make onboard calculations and then automate some of the most challenging tasks on the farm," he says. "Digital solutions are a big part of the next chapter [for Agco]."
But Hansotia goes one step further, noting that 2020 was a big year for agriculture. "All around the world, I think the consumer has started to realize the importance of the farmer, the importance of the global food supply and how fragile it can be," he says. "The value of the farmer rose this last year, which is fantastic."
But he has a warning. "Agriculture must be careful its practices are not painted with a negative paintbrush as contributing to challenges like global climate change,” he notes. "There is a role that agriculture needs to play in reducing its footprint, but at the same time, agriculture is one of the only industries that can help contribute to solving the problem, taking carbon out of the air, trapping it back in the soil."
The combination of smart machines, being farmer-centric and putting those innovations to work is a way Hansotia sees Agco helping farmers boost that sustainability story. "I see that as one of our [key] elements to help agriculture focus on the right things; help our farmers stay productive and sustainable." The company recently named Louisa Parker Smith as the new director for global sustainability.
Agco's investment in an agronomy team and creation of the Agco Crop Tours showing a range of insights on planter technology, fertilizer application, planting data and other crop production issues will be part of that future sustainability strategy.
Hansotia says that team will be part of an effort to look at the issue and explore the economics behind those practices. "And we'll work on how we can help the farmer make more money," he says.
Carving a digital future
Every major ag equipment company is involved in digital agriculture. Hansotia says Agco is set apart because it is taking an open architecture approach to the future. Working with AgIntegrated in the U.S. and DKE in Europe, Agco is developing a platform where a farmer's data can be housed securely in the cloud, but easily shared with trusted advisers as needed.
"Our approach has been to make data capture, movement, analytics, all of it easy and open," he says. "That's really our focus rather than come through our own proprietary network."
As Hansotia looks toward his opportunities for Agco, he sums it up succinctly: "Digital solutions are a big part of the next chapter."