LITTLE ROCK — Montana Tractors said it will finalize a joint venture with a small tractor manufacturer from Korea over the course of the coming year, in anticipation of expanding the Montana brand.
The Springdale-based company currently receives unassembled tractors from another Korean company, LS Tractors of Jeollabuk, Korea. Montana performs final assembly on the tractors and acts as distributor of the products.
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Montana’s pending new partner is Dongkuk Steel Mill Co. Ltd. of Seoul. That company already sells small tractors in the United States under the brand name Branson Tractors.
A Montana representative in Springdale on Thursday declined to comment on whether the pending partnership with Dongkuk will result in the folding of its Branson Tractors brand in favor of the Montana name.
But an expansion of the Montana brand name is expected, Montana officials said.
Branson Tractors operates two assembly facilities in Georgia and California. It has an administrative facility in Rome, Ga. They manufacture tractors in the 21- to 65-horsepower range.
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If the pending deal with Dongkuk closes in the next six to 12 months, Montana officials said it will terminate its relationship with LS Tractors.
The pending joint venture comes as Montana Tractors nears the completion of relocating its sole assembly operation from Springdale to Tarboro, N.C.
Montana Tractors purchased an 80-acre tract in Tarboro in December that will allow assembling and implement manufacturing to be done in the same location. It will complete the move of 30 assembly-related positions to North Carolina by the end of the month. Administrative operations will continue in Springdale on North Thompson Street, where about 18 jobs remain.
Montana began assembling under-100-horsepower engine tractors in Springdale when the company was founded in 2004. One of its founders was the late J.B. Hunt, who also founded the large Lowell-based trucking company that bears his name.
Lower cost was the reason given in April when Montana announced the move of assembly operations to North Carolina. The new location is closer to the seaport where tractor parts arrive from Korea.
The pending partnership with Dongkuk also holds promise to consolidate costs. Savings would be achieved by merging distribution and manufacturing operations, Montana said in a news release.
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Ted Wade, co-owner of Montana, said in the release that the potential merger is timely since the company is facing pricing pressure on the retail and wholesale fronts.
The under-100-horsepower tractor market has taken a dip along with the national economy, said Charlie O’Brien, a spokesman with the Milwaukee-based Association of Equipment Manufacturing. The under-100-horsepower market is down an average 33 percent for the year. Last year, the same market was down an average 20 percent.
Montana isn’t the only brand suffering.
“Sales aren’t what they used to be,” said Billy Grigg, a salesman with Gaston Melon Sales in Springdale, which sells competing tractors.
Grigg blamed the slowdown in construction and deflated prices for cattle.
Korean manufacturers represent only about 4 percent of theU.S. market, but that’s up from 1 percent in 2004, O’Brien said.
Aside from Wade, Montana Tractors’ other current owners are Johnelle Hunt, the widow of J.B. Hunt; Charlie Goforth, who’s also the owner of Bargo Engineering Co. in Fayetteville; and Dan Downing, also owner of accounting firm Downing and Associates in Springdale.
Source: https://t-tees.com
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