Hinton's Red Power

Ambition helps, Good employees are even better

Never try to beat a man at his own game was the advice of Jim Hinton, father of Randy Hinton, General Manager of the 'Red Power' Case/IH Team of northern Iowa. That was back in 1971 when Randy and his Dad were just trying to get a toehold in the farm equipment business with their 'start up' store in Bancroft, IA.

Today that Red-Power Team has expanded to five more Case/IH stores in Corwith, Manson, Humboldt, New Hampton, and Mason City, a 370-mile round-trip journey. Randy Hinton now takes a slightly different twist to his Dad's advice. His business mantra today: If you're going to survive in today's world, you'd better be ready to expand.

Because he likes challenges, he talks about further expansion. Any particular direction? He chuckled, "Oh, probably East and West or North and South." Though only 20-25 miles from Minnesota, he's not yet into Minnesota but his team is selling iron into the Gopher State.

From experience Hinton knows the farm equipment business is cyclical. "We've been on a good ride for some time now but it won't be this way forever. The world itself spins on a vicious cycle. We've just got to be smart enough to recognize the cycles," he relates.

He talks about the difficult earlier times of the 1980s when 'hanging on' was the challenge. Tenneco, which already owned Case, bought the International Harvester business in 1985. The new Case/IH company also struggled for awhile. The tag line on his business card reads: We're here to serve; yesterday, today, tomorrow.

"But today we're doing good. We've got an excellent line of products. You name it, our new planters are super, our tillage tools work great, our tractors can't be beat and our combines are phenomenal. We introduced the rotary combine way back in 1977. Sure, I'm prejudiced but a lot of farmers are telling much the same story about the Big Red lineup these days."

And GPS technology is now pretty much 'factory equipped' on Case/IH tractors, combines, even their bigger self-propelled row crop sprayers. Auto steering too is now 'a given' in Hinton's trade territory. "I'd say at least 70% of the farmers around here don't drive their tractors. The tractors drive themselves. Even older tractors have been hitched to various auto steer mechanisms. Variable rate planters will be coming on strong too," predicts Hinton

"Five years from now, even sooner, most guys will be 100% into these technologies because it makes every field operation easier and also more cost effective. There'll be no wasting of seed, or pesticides, or fertilizers. And they'll get more done in less time using less fuel. These guys will be efficiently farming every square inch out there. That's the kind of excitement driving agriculture these days."

Hinton will lease a piece of equipment if that's the only way to make the deal. But at best their lease business is only 5% of total sales. "Our customers like to own the equipment they use; their money just works better that way." He acknowledges his customer base continues to decline because farmers get older and replacements aren't always coming along. Farm numbers keep decreasing.

"Our customer average age is very likely 55+ today. We have some father/son operations also so there's a good age mix out there. Just a few years back 2,000 acres was a big farmer. Today we're talking 5,000 to 6,000 acres, and a few even larger. Lots of 24 row planters sold the last years and now the 36-row is getting hot.

"We roll combines every year. Case/IH has an interest-free program on new combines. So the farmer runs his rig each fall, we roll him into a new machine for the next season and we've got buyers right on down the line for the 1-2-3-4 etc/ year old machines just traded in. I'm proud of my Team on this program. Last year at this time (mid-April) we had $4.3 million of used combines but by harvest that inventory was down to only $400,000 of used machines."

Financial people in the Ag World speak of 2007 & 2008 as the 'golden years' of agriculture. Two successive years of record net farm income. So a 2009 slow down was almost inevitable, thanks to crashing commodity prices and a livestock industry still in the doldrums, especially the pork and dairy producers.

Yet 2009 was a record year for Hinton's team having their biggest year ever. "And I really don't know why. I didn't think we could beat 2008 but we did. I've talked with several other dealers who had the same good things happen, 09 was better than 08. And so far things haven't slowed for 2010. It's incredible and I really take my hat off to our good farmers who want to upgrade their equipment. Yes, it will change again. But I don't know when."

Hinton has about 100 employees, the oldest dating back to that very first year back in 1971. Darryl Vaske, employed since 1974 became his business partner and Service Manager in 1980. Darryl was also his 'team partner' in that crazy tractor-pulling year of 1992 when Hinton earned enough points in various major NTPA Sanctioned Events to earn the coveted Grand National Puller of the Year honor which would be likened to winning NASCAR.

"We pulled at events as far away as St-Hyacinthe, Quebec, Canada. Everyone spoke French. At the restaurant we had to point to what we wanted since neither Randy nor I spoke a word of French," laughs Vaske.

Great Employees Are The Key
"'My employees are really important to me. They have made me what I am today," acknowledges Randy Hinton. "I believe they know how much I really appreciate them.

"We have a big Christmas Dinner event, usually at the K.C. Hall in Algona, with good food and lots of games for employees and guests. Three years ago, Janeen Fischer, inventory person, got on the Internet and came up with a big package of various 'games of chance' with cash payouts of $1,000; $750; $500; $200; $100; and $25. Believe we did about six of those games. So everyone has a good time and many go home with some Christmas cash. But it' s their year-round support that makes this organization and I can't say enough good things about my people."

Janeen is 8 1/2 years with the Red Power Team and says working for the Hinton team is fun, and always a bit challenging. "Each store functions separately but we all work together so it's a bunch of 'small stores' put together that makes us big. But we're small enough to care and customer satisfaction comes first," she relates.

She's inventory control manager of 'whole goods' (not parts) for all six stores, which keeps her in contact with all the salesmen, the service managers and the bookkeepers. And if a farmer stops at the Bancroft store for example looking for a planter, or tractor, or combine but none are available at the Bancroft store, Fischer is likely to say, "Hang on, we've got 5 more stores so we'll find one for you." Each day she summarizes total sales of whole goods for all six stores including unit numbers of each particular piece of equipment.

Explains Hinton, "This lets me track every retail order of each day, be it every tractor, every combine, every skid loader, or whatever it is." Why this day-by-day sales analyses? "I want to know if we're making money," is his straightforward answer.

With growth comes building expansions. Added to the Bancroft store last year was a big 100' x 140' shop addition, which included a 30' x 55' washroom big enough to handle a combine. Plus three Schweiss hydraulic doors were part of this addition; a 30' x 18' tall door for the washroom, and 35' and 45' Schweiss hydraulics for either end of the big shop addition.

To date a total of 10 Schweiss hydraulic doors, including four, 45' wide by 18' tall units, are now in place at Hinton's six store locations. "My general contractor and I both went up to Schweiss Manufacturing (a country location near Fairfax, MN), to talk with Mike Schweiss, the boss man. I liked his operation. We walked through to see exactly how these doors are built. Schweiss is a down-to-earth guy; used to be a farmer I'm told so maybe that's why we connected so well.

"I just had the feeling he would take care of exactly what we needed in doors for my various locations. And he did. Delivery of each door exactly when we needed. And the service has just been phenomenal. The door looks like absolutely minimal maintenance. Overhead doors have been a pain for years, but not so with these hydraulics. And when those big 18' tall hydraulics are open, you've got lots of extra 'out door' shade which is nice during our Iowa summer days.

"Each door is insulated for about an R30 factor. Plus Schweiss designed two windows for each door for added visibility and safety. You've got to remember when opening a hydraulic door you need to clear the outside deck before you push the button," noted Hinton.

Farm equipment dealers, even farmers, can't say enough good things about a super-wide door. "A 16-row planter, or a 16-row corn head still has 5' extra through that 45' wide door. And man, is that handy to be able to drive that big a unit directly into your shop.

"I don't even know the warranty on these Schweiss doors and I'm not concerned. I know that I'm going to be taken care of and that's what counts," says Hinton.

How does he assess his future, and the future of farm iron? "When we were broke during that early 1980s crises we certainly didn't know our future. And with certainty I couldn't predict it today. This farm economy can turn real fast. Twenty years ago the value of the iron in our store lot dropped in half in just one year. I can only hope that we have the vision to see troubles before they hit. Get rid of the iron before it takes you down is how we have to position ourselves," sums up Hinton.

Today much of his sales are financed through the Case/IH program or the Ag Direct Financial Package. Each offers low-rate and interest-free combination packages tailored to what best fits a particular buyer. "And fortunately a good many farmers still prefer to pay cash."

So what drives Randy Hinton? "Challenges," was his 1-word response. "Buying a new business gets me going, otherwise I end up getting bored. And right now I'm bored," wrapped up this 58-year-old entrepreneur who says snowmobiling in the winter and loafing at his Clear Lake, IA lake home in the summer is what fills his idle time.

His five children include Angie (35), secretary at the Corwith store, Jamie (32), secretary at the Mason City store, Bob (29) in sales at the Manson store, Abbie (28), a hair dresser at Bancroft, and Joe (26), at the Humboldt store. Plus 6 grandchildren who like to keep Grandpa Hinton busy too.

When it's time to hang it up, can Randy Hinton go quietly to the sidelines? His eyes moisten just a bit as he quietly says, "I hope I can." or more go: www.redpowerteam.com

See More Photos of Red Hinton's Doors