Lehman Brothers Collection - Contemporary Business Archives

Harvard Business School Baker Library Historical Collections

Lehman Brothers Collection

Twentieth-Century Business Archives

Massey-Ferguson Credit Corporation - Lehman Brothers Collection

Massey-Ferguson Credit Corporation

List of Deals

A variety of farm machine manufacturers merged over the course of 150 years to create the tractor giant Massey-Ferguson. By the 1970s the company was multinational in scope, with a continued focus on agricultural equipment.

Daniel Massey opened the Massey Manufacturing Company, a mechanical repair shop and manufactory for farm equipment, outside Newcastle, Ontario, in 1847. By the 1850s Massey was both a foundry and a manufacturer of mowers and reapers built according to American patent designs. Alanson Harris founded a rival factory, the Harris Company, in Beamsville, Ontario, in 1857. Harris manufactured the Kirby mower, an American patent design. In the succeeding decades, both companies developed their own designs for agricultural machinery for sale to Canada, the United States, and Europe. In the 1870s Massey used extensive advertising to boost sales. Massey relocated to Toronto in 1879.

In 1891 Massey and Harris were the two largest farm machinery companies in Canada. In that year the companies agreed to a merger. At about the same time, Massey-Harris acquired several rival companies: the Wisner Company, the Patterson Company, and the Verity Plough Company. The mergers allowed Massey-Harris to sell advanced harvesting machinery and other general farm equipment to an international market. The firm had $3.3 million in sales in 1893. The Massey family remained central to the management of the merged company. Especially in the 1890s, the family gave large philanthropic gifts to religious and charitable causes, including building a concert hall and mission in Toronto. The Massey family became less involved in the company's operation in the 1920s. Massey-Harris went public in 1927.

Massey-Harris opened plants in France, Germany, Australia, and the United States in the 1920s. Canadian sales reached $13.5 million in 1929, with U.S. sales at $14.8 million and $5 million in French sales; world sales were nearly $44 million. The onset of the Depression pushed grain prices to ruinous lows, however, and machine sales sank. Sales in 1932 were a paltry $9 million, and 1936 sales revived slightly to $16 million. During the Second World War, Massey-Harris manufactured anti-aircraft shells. War production made up half of sales from 1939 until 1945. In the last year of the war, sales hit $116 million.

Massey-Harris merged with another farm machine company, Ferguson Inc., in 1953. Harry Ferguson was a self-taught engineer and an immigrant from Northern Ireland. Ferguson had designed cars and motorcycles, but his innovation was in tractor manufacturing. The so-called Ferguson System created a single-unit tractor with the plough already attached. He developed the system during the First World War, and it was an immediate success. In 1939 Ferguson agreed on a handshake deal with Henry Ford to produce tractors. Under the deal, Ferguson Inc.'s sales rose from $5 million in 1939 to $80 million in 1946. Ferguson retained the patent rights to his designs. When Ford ousted Ferguson's unit in 1944 yet continued to manufacture his designs, Ferguson responded with an anti-trust lawsuit. Eight years later, he received a settlement of $9.25 million from Ford. Ferguson's own company continued to operate, with U.S. sales of $65 million in 1951 and a strong foothold in Europe. Ferguson sold his company to Massey-Harris for $16 million in 1953, though the sale was portrayed as a merger. The new company was named Massey-Harris-Ferguson, shortened to Massey-Ferguson in 1957.

The merger initially resulted in a dual-system sales structure and in bureaucratic confusion. But by the late 1950s Massey and Ferguson were better integrated and more focused on streamlined sales. Massey-Ferguson had sales of $412 million with a net loss of $4.7 million in 1957; by 1959, it made $21 million in profits from $491 million in sales, despite reduced sales outlets. American marketing and executive techniques were introduced, as well. By purchasing Standard-Hotchkiss's European tractor plants and by acquiring Perkins Limited (both in 1959), Massey-Ferguson solidified its hold on world tractor sales.

By the 1960s, the company had a reputation as a major American-style multinational corporation. The company continued to struggle to compete with International Harvester, John Deere, and Ford. During this period, Massey-Ferguson was heavily influenced by the Argus Corporation, a powerful Canadian investment company worth $125 million in 1960. In the 1960s, Massey Ferguson sold its products in 165 countries, with 36 plants in 10 countries. Its stock was listed on the NYSE in 1966, in a deal brokered by Lehman Brothers, Lazard Frères, and Wood, Gundy.

By the mid-1970s, Massey-Ferguson had large-scale operations but a shrinking market and large debt. In the 1980s the company required a government bail-out and was reorganized as the Varity Corporation. The AGCO Corporation bought Varity in 1994.

Note: Two histories of Massey-Ferguson may be of interest: Peter Cook's Massey at the Brink (Toronto: Collins, 1981) and E. P. Neufeld's A Global Corporation: A History of the International Development of Massey-Ferguson Limited (Toronto: University of Toronto Press, 1969).

Harvard Business School Harvard Business School Baker Library Histrorical Collections