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Published August 18, 2014, 09:41 AM

An inside look at the Worthington Ag Parts operation

Worthington Ag Parts in Worthington, Minn., is the original location of a global business and still one of its busiest stores.

By: Mikkel Pates, Agweek

WORTHINGTON, Minn. — Worthington Ag Parts in Worthington, Minn., is the original location of a global business and still one of its busiest stores.

Today, the Worthington store has 26 employees and is the largest of eight stores owned by Worthington Tractor Parts Inc., headquartered in Sioux Falls, S.D. About 60 percent of the Worthington Ag Parts products are shipped and the rest is over-the-counter sales.

“We ship all over the world, every day,”

says store manager Matt Helmers. “All states, everywhere.” Every year, the store gets visitors from more than 30 states who come to pick up parts.

The location recycles about 150 combines and 100 tractors every year, as well as some hay equipment and planters. Employees have specialized know-how and mechanical skills. Several store employees have more than 10 years of experience, some more than 30. They receive more than 300 calls a day, from all over the world.

Past the warranty

Worthington Ag Parts starts offering parts off machines about 12 years after production and when they are past their warranties, says Mike Winter, president of the Worthington Tractor Parts parent company. They acquire machines through dealers, insurance companies and some companies that specialize in recovering salvage.

When a machine comes in, an employee photographs it from several angles. The pictures are posted on a web page every evening and are available every morning at 5:30 a.m.

“That picture may show you the tire you’re looking for, the auger, the chopper,” Helmers says.

Starts in the yard

The process of disassembling tracts starts with unusual yard tractors. Specialists use the vehicles like rolling tool boxes — each decked with dozens of the yard man’s own tools.

Transmissions, motors, gear cases, final drives — anything with an internal bearing or pieces on the inside — is replaced, Helmers says.

Parts either go to an inside warehouse or are placed in an orderly row outside. Some parts are placed on a rack for easy access when the snow gets deep in the winter.

“We usually keep a combine for three years,” Helmers says. “Once it has its fourth birthday and everything’s gone off of it, we have a shear come in and replace it with the same model or the model newer, if they’re available. We usually have 300 to 350 combines standing in the yard at all times.”

All of the company’s used parts are quality checked and carry a one-year limited warranty, with a 30-day, no questions asked return policy.

Worthington Ag Parts also has a huge stock of new parts out-sourced and made for the company by its Parts Express sister company. Most are priced at 70 percent of the dealer price and provide quality that meets or exceeds the Original Equipment Manufacturer (O.E.M.) component.

A time for salvage?

Recent lower grain prices might indicate a more active fall at Worthington Ag Parts, Helmers acknowledges.

“When farmers are selling $3 corn, they tend to look for used or rebuilt or after-market new,” Helmers says. “But when we have $7 corn, they like to buy new O.E.M. Money seems to be a lot easier to spend with $7 corn and $16 beans.

“It’s nothing for these new combines, if they break a final drive, it could be a $15,000 new part from John Deere or Case-IH, where we might sell a rebuilt for $4,500,” Helmers says. “With that $2 or $3 (per bushel) corn, that makes a world of difference.”

Helmers estimates there are half as many machines in the country than there were 10 years ago.

“There’s half as many farmers,” he says. Farmers are working together and jointly operating big ticket items such as combines and planters.

The fall combine season is the heaviest season for Worthington Ag Parts, Helmers says.

“We’re dark-to-dark,” he says, adding that in the busiest conditions, the employees might work Saturdays and even a few Sundays.

Parts can be shuffled among the stores — sometimes by the truck-load. This year, the need for combine parts might be a little lighter to the north where some crops weren’t put in this year. Illinois, Indiana and southern Wisconsin have fabulous crops.

The past two or three falls have been beautiful in the Worthington store’s primary trade area — little rain or mud.

“You catch a year when you have a lot of rain and the beans are ready to be cut, they start playing in the mud, it becomes really busy here,” Helmers says. “That’s when parts wear faster.”In 1986, Dyke and partner Al Renstrom sold the business to Churchill Industries, a Minneapolis holding company headed by John J. Fauth IV. Fauth is a Long Island, N.Y., native and former Citicorp executive who founded Churchill Cos. in 1981.

Churchill renamed the business Worthington Ag Parts and hired Mike Dudley, a beverage company executive, to run it. In 1988, Dudley moved the company headquarters to St. Charles, Mo., to be centrally located.

Under Dudley, the company grew. In 1994, Churchill acquired Rempel Tractor Parts of Niverville, Manitoba, near Winnipeg. In 1995, the company acquired Neil’s Parts — the largest after-market and used ag machinery parts distributer in Australia. The company had four stores and had been a customer of Worthington Ag Parts. Neil’s had built an expansive marketing network of 1,500 dealers, many machinery repair shops.

Dudley left the company in 1998, and in 1999 Churchill moved the headquarters to Maple Grove, Minn., closer to Fauth and its owners. After two other presidents, Winter was named president in 2002.

World footprint

Winter, 48, has been at the helm for more than a decade and has been with the company for 25 years.

Winter graduated high school in Worthington in 1983. The son of a bricklayer and a production line worker at Campbell Soup Co., Winter obtained an accounting degree at Southwest Minnesota State University in Marshall and started his accounting career as an auditor for cooperative elevators.

His wife, Karen, is the Worthington Ag Parts human resources manager.

Under Winter’s leadership, Worthington Tractor Parts sold the Canadian subsidiary. It added two locations in Australia, started Parts Express Co. and Capello Implements and added a bonded warehouse in Germany. Capello Implements distributes Italian-made Capello corn heads in the U.S.

Parts Express is an after-market wholesale distribution company that works in domestic, international and export markets.

“We get after-market new parts manufactured all over the world,” Winter says. “We are in the process of developing a dealer network in the U.S.”

Winter also led the building of a 45,000-square-foot world headquarters in Sioux Falls. The location made sense from many standpoints, Winter says.

“It had good interstate highway connections,” he says. “It was close to our largest facility at Worthington and Watertown, S.D. The Sioux Falls Development Foundation was instrumental. We bought land from them at a very competitive price and they were very conducive to welcoming us to Sioux Falls.”

The city also had an economic environment favorable for recruiting ag-related staff.

Capello and corn

The development of Capello Implements made a big difference for Worthington Tractor Parts.

“Capello brought us into a whole new market, a new price point and customers for us,” Winter says. “It adds new customers to grow our business, but we can support them with our core business, which is parts replacement.”

After three years in the corn head business, Winter says the company is “still the new kid on the block,” but notes that volume numbers have doubled annually.

Capello is the Original Equipment Manufacturer (O.E.M.) for Claas, the German ag equipment powerhouse manufacturer, and for Lexion brand corn heads for Claas of America.

Capello heads are known for a patented chopping system that processes an entire plant with the action of its knife rollers. This leads to faster biodegradation of the stalk, helping release nitrogen stuck in the corn stalks.

“Once Capello met Worthington Ag Parts and saw our distribution network, it was a match made in heaven,” Winter recalls. “We sell all makes, all models, and have an excellent distribution network throughout North America. At the same time, it brought us to a market that we weren’t in — serving a high-end producer who may have equipment that’s under warranty, but may be to a dealer that we don’t sell parts to. We offer that user a corn head with Italian craftsmanship, and — we like to say — American grit.”

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