netrashetty
Netra Shetty
AGCO Corporation (NYSE: AGCO) is an agricultural equipment manufacturer based in Duluth, Georgia, USA. As a leading global manufacturer of agricultural equipment, AGCO offers a full line of tractors, combines, hay tools, sprayers, forage and tillage equipment, which are distributed through more than 2,700 independent dealers and distributors in more than 140 countries worldwide.
Teacher-turned-CEO Martin Richenhagen is shaping the future of agriculture. He also likes to drive his own tractor.
Even though he works for an American corporation, Martin Richenhagen sometimes acts very German, such as his lack of trust in his own success. When he took over as CEO of AGCO Corporation three years ago, he set a strategic goal of $7 billion in revenue. "Now we have the problem that we have reached six and a half billion already this year," Richenhagen said wryly. "I guess we have to define a new goal."
Richenhagen, 55, born in Cologne and a former horse riding instructor and high school teacher, now finds himself among America's most influential business executives. As CEO and president since 2004 of the world's third largest manufacturer of agricultural equipment, he is the only German lead a Fortune 500 company. "Conservative, patient, philosophical," is how the business magazine "Forbes" described him.
He is the master of the art of strategic understatement. Even though AGCO has 12,000 employees worldwide, 15 production plants across the globe and operations in 140 countries, the company didn't build its headquarters in the middle of Manhattan but instead, settled in Duluth, Georgia, a quiet suburb of Atlanta.
There are several reasons why he, of all 16 candidates and as the only non-American, was chosen for the top job at AGCO. AGCO is a global corporation with a strong European market presence: About 50 percent of AGCO's revenue is earned in Europe, 20 percent in South America and only 10 percent in the U.S. Eight of its 15 production plants are located in Europe.
Martin Richenhagen's unorthodox professional history may have played a role as well. He originally wanted to become a journalist but the journalism school he applied to after studying philosophy, theology and languages turned him down, a fact he is still bitter about to this day. Still, he freely admits that with his current job and an annual salary of $1 million plus performance benefits that could total $4 million, he made the better choice.
Richenhagen started out as a teacher. After five years, though, he became bored. An enthusiastic equestrian, he also owned a riding school. One of the stable's sponsors was Jürgen Thumann, entrepreneur and now president of the Federation of German Industries (BDI). It was Thumann who advised Richenhagen to give up teaching and enter the world of business.
So a career was born. At first, Richenhagen worked for a mid-sized steel company in Germany's Ruhr industrial area, later for Schindler Holding, a leading producer of elevators. He moved on to Forbo Corporation, a flooring company headquartered in Zurich, and then to Claas, a large family-owned manufacturer of agricultural equipment based in Harsewinkel, a little town in the eastern Westphalia region of Germany.
At a trade show, he met the CEO of AGCO, Robert Ratliff. The two men hit it off instantly, and when Ratliff was looking for a successor in 2004, he contacted his German friend. His interesting résumé "didn't hurt my chances" as Richenhagen puts it, and neither did the fact that, besides German, he speaks English, French and Italian fluently.
AGCO was founded in 1990 from the remnants of ailing Deutz Allis Corporation, a U.S. subsidiary of German engine manufacturer Klöckner-Humboldt-Deutz. While during AGCO's early days it was all about acquisitions, Richenhagen now wants to focus more on organic growth. Of AGCO's 20 different brands, only four are supposed to survive: U.S. industry icons Massey Ferguson and Challenger, Finnish tractor manufacturer Valtra and Fendt from Germany.
Richenhagen is passionate about his job. For every question, he not only has an answer but also offers a list of facts and figures. Whether he talks about sugarcane harvesters, satellite-controlled planters, self-guided crop choppers or unmanned combines, it always sounds as if he had just landed the scoop of the year on Wall Street, his eyes gleaming with excitement.
He simply enjoys driving a tractor. He prefers to test out new products himself. On the weekends when he isn't traveling, he takes care of the barn and the grazing area for his horses on his property north of Atlanta. Here, he lives with his wife and two of his children while his oldest son works for a management consultancy in Switzerland. Richenhagen has several vintage tractors among them a model of the legendary German "Linde" brand, which he keeps at his estate in Westphalia, Germany. He takes pride in owning a Fendt tractor dating back to 1952, "with the original wooden bar the old fashioned harvesters used to have."
Richenhagen is what Americans call a "big picture person" who doesn't get lost in detail. For that reason, AGCO's results last year, which were stagnant to weak, don't upset him too much. Sales remained flat at $5.4 billion and earnings dropped $100 million from the previous year. However, second quarter figures for 2007 already reflect an upward trend with net sales growing by $1.7 million, an increase of 18 percent over the same period last year.
Instead of dwelling on figures, Richenhagen sketches a compelling calculus of agriculture in the future: As the world's population rises and demand for agricultural products increases, cultivatable land will become scarce. "As a result, agriculture needs to be more professional," he said.
His American employees and colleagues appreciate his no-nonsense optimism and his direct yet personable leadership style. This might be a heritage from his upbringing in cheerful Cologne, he says with a smile. At times though, he is still amazed at how business is conducted in the U.S.: how powerful, for example, the CEO's position is compared to that of German executives, how much more corporate America prefers hierarchies or simply the fact that the good old check is still a common means of payment in business.
Besides that, he greatly enjoys living in the U.S., and he hopes that the shareholders, analysts and his co-workers at AGCO want him to stay until he is ready for retirement, in about 10 years. The average time in office for an American CEO is two and a half years. He pauses then grins and says nothing. Sometimes Richenhagen is very German.
Teacher-turned-CEO Martin Richenhagen is shaping the future of agriculture. He also likes to drive his own tractor.
Even though he works for an American corporation, Martin Richenhagen sometimes acts very German, such as his lack of trust in his own success. When he took over as CEO of AGCO Corporation three years ago, he set a strategic goal of $7 billion in revenue. "Now we have the problem that we have reached six and a half billion already this year," Richenhagen said wryly. "I guess we have to define a new goal."
Richenhagen, 55, born in Cologne and a former horse riding instructor and high school teacher, now finds himself among America's most influential business executives. As CEO and president since 2004 of the world's third largest manufacturer of agricultural equipment, he is the only German lead a Fortune 500 company. "Conservative, patient, philosophical," is how the business magazine "Forbes" described him.
He is the master of the art of strategic understatement. Even though AGCO has 12,000 employees worldwide, 15 production plants across the globe and operations in 140 countries, the company didn't build its headquarters in the middle of Manhattan but instead, settled in Duluth, Georgia, a quiet suburb of Atlanta.
There are several reasons why he, of all 16 candidates and as the only non-American, was chosen for the top job at AGCO. AGCO is a global corporation with a strong European market presence: About 50 percent of AGCO's revenue is earned in Europe, 20 percent in South America and only 10 percent in the U.S. Eight of its 15 production plants are located in Europe.
Martin Richenhagen's unorthodox professional history may have played a role as well. He originally wanted to become a journalist but the journalism school he applied to after studying philosophy, theology and languages turned him down, a fact he is still bitter about to this day. Still, he freely admits that with his current job and an annual salary of $1 million plus performance benefits that could total $4 million, he made the better choice.
Richenhagen started out as a teacher. After five years, though, he became bored. An enthusiastic equestrian, he also owned a riding school. One of the stable's sponsors was Jürgen Thumann, entrepreneur and now president of the Federation of German Industries (BDI). It was Thumann who advised Richenhagen to give up teaching and enter the world of business.
So a career was born. At first, Richenhagen worked for a mid-sized steel company in Germany's Ruhr industrial area, later for Schindler Holding, a leading producer of elevators. He moved on to Forbo Corporation, a flooring company headquartered in Zurich, and then to Claas, a large family-owned manufacturer of agricultural equipment based in Harsewinkel, a little town in the eastern Westphalia region of Germany.
At a trade show, he met the CEO of AGCO, Robert Ratliff. The two men hit it off instantly, and when Ratliff was looking for a successor in 2004, he contacted his German friend. His interesting résumé "didn't hurt my chances" as Richenhagen puts it, and neither did the fact that, besides German, he speaks English, French and Italian fluently.
AGCO was founded in 1990 from the remnants of ailing Deutz Allis Corporation, a U.S. subsidiary of German engine manufacturer Klöckner-Humboldt-Deutz. While during AGCO's early days it was all about acquisitions, Richenhagen now wants to focus more on organic growth. Of AGCO's 20 different brands, only four are supposed to survive: U.S. industry icons Massey Ferguson and Challenger, Finnish tractor manufacturer Valtra and Fendt from Germany.
Richenhagen is passionate about his job. For every question, he not only has an answer but also offers a list of facts and figures. Whether he talks about sugarcane harvesters, satellite-controlled planters, self-guided crop choppers or unmanned combines, it always sounds as if he had just landed the scoop of the year on Wall Street, his eyes gleaming with excitement.
He simply enjoys driving a tractor. He prefers to test out new products himself. On the weekends when he isn't traveling, he takes care of the barn and the grazing area for his horses on his property north of Atlanta. Here, he lives with his wife and two of his children while his oldest son works for a management consultancy in Switzerland. Richenhagen has several vintage tractors among them a model of the legendary German "Linde" brand, which he keeps at his estate in Westphalia, Germany. He takes pride in owning a Fendt tractor dating back to 1952, "with the original wooden bar the old fashioned harvesters used to have."
Richenhagen is what Americans call a "big picture person" who doesn't get lost in detail. For that reason, AGCO's results last year, which were stagnant to weak, don't upset him too much. Sales remained flat at $5.4 billion and earnings dropped $100 million from the previous year. However, second quarter figures for 2007 already reflect an upward trend with net sales growing by $1.7 million, an increase of 18 percent over the same period last year.
Instead of dwelling on figures, Richenhagen sketches a compelling calculus of agriculture in the future: As the world's population rises and demand for agricultural products increases, cultivatable land will become scarce. "As a result, agriculture needs to be more professional," he said.
His American employees and colleagues appreciate his no-nonsense optimism and his direct yet personable leadership style. This might be a heritage from his upbringing in cheerful Cologne, he says with a smile. At times though, he is still amazed at how business is conducted in the U.S.: how powerful, for example, the CEO's position is compared to that of German executives, how much more corporate America prefers hierarchies or simply the fact that the good old check is still a common means of payment in business.
Besides that, he greatly enjoys living in the U.S., and he hopes that the shareholders, analysts and his co-workers at AGCO want him to stay until he is ready for retirement, in about 10 years. The average time in office for an American CEO is two and a half years. He pauses then grins and says nothing. Sometimes Richenhagen is very German.