Equipment dealers cope with change
Uncertainty sows seeds of diversification

by Christopher Key

 

 

Agriculture has always been part of the soil in which Whatcom County has grown. In recent years, however, it has become an increasingly risky way to make a living. The local dairy industry is a mere ghost of its formerly robust self. Berry farmers are in better shape, but that’s not saying much. For the businesses that rely on agriculture for sales, the situation is requiring some fast footwork.

Dan Brim’s father founded Brim Tractor in 1964 and it has remained in the family. The business even spawned a high-tech offshoot, DIS Corporation, which is run by Dan’s brother Bob. You can read more about that business in this month’s cover story. Brim Tractor has remained at the same location on the Guide throughout its existence and was originally a Ford dealer. New Holland bought the Ford tractor division in the early 1990s.

“I like to characterize us as a highly ethical company,” Dan Brim said. “Customers see us as a company that does the right and fair thing. Yes, we have to make a profit, but that doesn’t mean treating people unfairly.”

The business is quite sensitive to the weather.

“We get two dry days in a row and things get crazy,” Brim said. “You’ve got to be able to run and keep up.”

Brim Tractor keeps 26 employees running.

“We have good employees here,” Brim said, “and I feel deeply that they are our number one asset. We try to make sure that we develop leadership in our staff. With our ups and downs, it’s not always easy to stay on track, keep focused and maintain high levels of energy.”

Finding and keeping those good people is something of a challenge.

“We’ve got a good crew right now,” Brim said. “Some of them have been with us for 25 years. I try to be fair and compassionate with them. Give them more responsibility as the grow and they will rise to the occasion.”

Brim doesn’t believe agriculture in Whatcom County is dying so much as it is changing.

“There’s been a long period of transition from a more rural to a more urban environment,” he said. “But this will remain a major agricultural county for at least my lifetime. Dairy is the worst I’ve ever seen it right now. Berries are not where they were six years ago, but are better than two years ago. As much as we love the agriculture business and working with those good people, we still have to diversify. Agriculture is just too cyclical.”

Brim has taken on a line of golf carts and lawn and garden tractors.

“We call them gentleman farmer tractors,” Brim said. “Everybody buys lawn and garden equipment. We’ve also started selling the Polaris line of industrial and recreational utility vehicles. We’ve looked at power sports (snowmobiles, personal watercraft), but haven’t made that move yet.”

They have moved into some other markets.

“We opened a branch in Mt. Vernon in 2000 and we’re now in Issaquah,” Brim said. “That’s where the consumer and recreational market is. As we continue to grow, more and more of our focus will be on the metropolitan areas.”

Brim is determined not to compromise quality.

“You can’t expand until you have the top quality people to back you up,” Brim said. “We want to be a regional force and control the New Holland market in Western Washington.”

What about all those other equipment dealers in Lynden?

“It’s honestly a pleasure competing with the other dealers,” Brim said. “They play strong, but fair. That is part of what makes this a fun job. We’re all a part of the community and do our best for our respective manufacturers. If one of us needed help, all the others would be there.”

Just up the Guide from Brim is North Washington Implement Company, which has been doing business under that name since 1917. Jim Hale bought half of the company 23 years ago and the other half about 13 years ago. He’s the fourth owner in the company’s long history.

“You have to have an interest in taking care of people before taking care of numbers,” Hale said. “I’m fortunate to have a lot of long-term employees who really know the customers. Of course, having the best product lines, John Deere, Honda, Stihl, doesn’t hurt.”

The company moved to its present location five years ago in order to accommodate growth.

“We have 28 employees right now,” Hale said, “but it’s getting tough to find good people. There doesn’t seem to be much of a work ethic any more. Some of our best employees grew up on dairy farms and there was no doubt they knew how to work. There’s a real family feeling here. We even shut the place down when one of our employees died because we had lost one of our own.”

Hale tries to let employees develop in their own direction, but acknowledges that it doesn’t always work.

“Naturally enough, I try to hire people who think like I do,” Hale said. “The customer is the most important thing. I want people with both technical and people skills. Attitude is extremely important. Customer expectations are higher than they used to be and they keep raising the bar.”

Like the other dealers, Hale has to perform a constant balancing act.

“We basically have two shops here,” he said, “agriculture and lawn and garden. You have to stay busy and we’re getting closer to that goal each year. Not so long ago, agriculture made up 95 percent of our business. Now it’s down to about 60 percent. If this year doesn’t see some improvement in dairy, it will be down to half. We’re fortunate in that John Deere is the only major implement manufacturer that also does lawn and garden equipment. After all the consolidations in the industry, John Deere is still solid, stable and intact.”

According to Hale, dairy is enduring its worst streak in 30 years.

“It’s all tied to the price of milk,” Hale said. “It’s a struggle for everybody right now, but the dairy industry will come back. This is still the best place in Washington to produce milk. All the support systems, like bankers and veterinarians, are in place.”

Dairy still accounts for 50 percent of the business on the agriculture side of the shop, while berries and potatoes come in at 25 percent and 20 percent, respectively.

“Agriculture may be threatened by its own popularity,” Hale said. “More and more people want to live in farm country. It’s a good thing we have protections in place.”

Farmers Equipment Company started life in 1935 with a bin full of miscellaneous parts and some catalogues. Co-founder Simon Stremler put a high premium on customer service. His son Ken continues that philosophy.

“Our hours are as long as it takes to serve the customer,” Stremler said. “We were established on strength of service. We fix things, no matter where they bought them.”

Company controller Kevin Pawlowski echoes the sentiment.

“When a dairy farmer gets into a breakdown situation,” he said, “timing is critical. Those cows won’t wait. We have to be there for them.”

One of the challenges faced by the company involves loyalty.

“People used to be more loyal to both businesses and brands,” Stremler said. “Now, it’s wide open; there is no brand loyalty. It’s both a challenge and an opportunity.”

Farmers Equipment has a location in Burlington along with the one in Lynden. There are a total of 65 employees, 47 of which are at the Lynden location. Pawlowski agrees with the other dealers that it’s not easy to find good people.

“Some technical skills are obviously vital,” he said. “We’ll train customer service and personal skills later, if necessary.”

Pawlowski also agrees with Jim Hale about farm kids.

“When we could depend on hiring farm kids,” Pawlowski said, “we could depend on them knowing how to work and knowing farm equipment. Kids today rarely plan to stay on the farm, so it’s more difficult to grow that kind of talent.”

While the company pays a competitive wage and offers a good benefit package, Pawlowski says that’s not the most important factor in keeping good employees.

“Positive reinforcement is more important than money,” he said. “Conversion to computers changes all the processes and procedures. Long-term employees suddenly felt like they were new again and it caused some frustration. That had to be addressed. As an employer, you have to be a student of people. Some people do well with routines and details while others prefer flexibility and creativity. You need both.”

Evening out the business and seasonal cycles is always a challenge.

“Farming is not so much declining as it is centralizing,” Pawlowski said. “You’ve got the same land, but fewer farmers. There used to be ten dairy farms along Hannegan Road and each of them needed a tractor. Now there are two diary farms and the same number of dealers competing for the business. I’m surprised all the dealers are still here.”

Their solution was to diversify into construction and material handling equipment, such as excavators and forklifts.

“We decided that going to larger commercial equipment rather than lawn and garden was a better fit for us,” Pawlowski said. “Sixty-five percent of our business is still agriculture with twenty-five percent construction equipment and five percent material handling.”

Pawlowski is president of Whatcom Farm Friends.

“There will always be farming here,” he said. “There is great political will to keep farming. Nobody here wants to go the way of Fife and Renton. Everybody involved in agribusiness knows that it means a great deal to Whatcom County. We’ll lose a big part of our quality of life if we lose agriculture. There’s now a legal imperative to preserve salmon habitat and you just can’t do that in an urban area. They tried in West Seattle, but there’s just too much road runoff. Agriculture is the best solution, both economically and environmentally.”

Korvan Industries is a manufacturer of agricultural equipment and faces somewhat different challenges than the dealers. The company was founded in 1985 by Dan Korthuis and Will Vanderhage, hence the name Korvan. By 1988, they had built 50 raspberry harvesters and needed to diversify. Korvan moved into coffee and blueberry harvesting equipment in 1992 and later that decade started building machines to harvest grapes and raisins. In 2000, they moved on to build harvesters for oranges and olives. The company is now owned by Dan Korthuis and seven other partners, all local.

“Our aim has always been to solve farmers’ harvesting problems in a cost effective manner,” said Scott Korthuis, who is Dan’s brother and product team manager. “We look for crops that are hand harvested and need mechanization.”

Korvan’s creative and innovative solutions to those problems resulted in a long row of patents and trademarks displayed along the office wall.

“There are two or three other companies now making raspberry and blueberry equipment,” Korthuis said. “Sixty percent of our business is now involved with grape harvesting since there so many more acres of that crop. We like to key in on large markets that are not quite big enough to attract the big boys.”

Korvan now does business in 15 countries around the world.

“Our first challenge in designing a harvester is fruit removal,” Korthuis said. “How do you devise a system that removes only the ripe ones? With grapes, how do you get them all in one pass without damaging the plant? It involves shaking technology so that the ripe fruit falls. Then you have to catch it without damaging the fruit. The fruit has to be conveyed and put into containers, again without damaging it. The goal is to produce fruit of the highest grade, Individual Quick Frozen.”

Designing this sort of machine is a synthesis and can take years.

“We’re continually improving our product so that it does more of what the farmer wants,” Korthuis said. “The window for harvest is very short and we have to do all of our research and development in that time. So agriculture is both seasonal and cyclical for us, as well. Times are tough. We had to lay off some people last year and that resulted in some hard feelings. At the same time, it’s not easy to find new employees. We need welders and machinists, but our product is so specialized that we have to have a skilled crew, even in assembly. If you take care of people, they will stay. We do our best to provide a secure working environment. Good, honest feedback is vital.”

While smaller farms are getting swallowed up by bigger ones, it isn’t as likely with raspberries. That’s because harvesting more than forty acres of the fruit is not practical.

“We’re at the bottom of the economic food chain as a manufacturer,” Korthuis said. “Manufacturers start wealth generation by making something from raw material. There aren’t a lot of companies left creating jobs at this end of the food chain.”

The agriculture equipment businesses face even more cyclical challenges than most, but they are approaching it in a time-honored fashion: diversify. If agriculture is to remain as a vital part of Whatcom County’s economy and its appeal, support industries like these may have to find still further ways of remaining viable.