International

International History

The roots of International Harvester run to the 1830s, when Cyrus Hall McCormick, an inventor from Virginia, finalized his version of a horse-drawn reaper, which he field-demonstrated throughout 1831, and for which he received a patent in 1834. Together with his brother Leander J. McCormick (1819–1900), McCormick moved to Chicago in 1847 and started the McCormick Harvesting Machine Company. The McCormick reaper sold well, partially as a result of savvy and innovative business practices. Their products came onto the market just as the development of railroads offered wide distribution to distant market areas. He developed marketing and sales techniques, developing a vast network of trained salesmen able to demonstrate operation of the machines in the field.

McCormick died in 1885, with his company passing to his son, Cyrus McCormick, Jr. In 1902 the McCormick Harvesting Machine Company and Deering Harvester Company, along with three smaller agricultural equipment firms (Milwaukee; Plano; andWarder, Bushnell, and Glessner—manufacturers of Champion brand) merged to create the International Harvester Company. In 1919, the Parlin and Orendorff factory in Canton, Illinois was a leader in the plow manufacturing industry. International Harvester purchased the factory calling it the Canton Works; it continued production for many decades.
 

The golden years of IH
 

In 1926 IH's Farmall Works began production in a new plant in Rock Island, Illinois, built solely to produce the new Farmall tractor. By 1930, the 100,000th Farmall was produced. IH next set their sights on introducing a true 'general-purpose' tractor designed to satisfy the needs of the average US family farmer. The resulting 'letter' series of Raymond Loewy-designed Farmall tractors in 1939 proved a huge success, and IH enjoyed a sales lead in tractors and related equipment that continued through much of the 1940s and 1950s, despite stiff competition from Ford, John Deere and other tractor manufacturers.

IH ranked 33rd among United States corporations in the value of World War II production contracts. In 1946 IH acquired a defense plant in Louisville, Kentucky, which was enlarged, expanded, and re-equipped for production of the Farmall A, B, and the new 340 tractors. Then in 1948 IH acquired the Metropolitan Body Company of Bridgeport, CT. This was the manufacturing facility for the bodies of the commercially successful Metro line of forward control vans and trucks from 1938 until roughly 1964.

In 1974, the 5 millionth IHC tractor was produced at the Rock Island Farmall plant.Throughout the 1960s and 1970s, despite good sales, IH's profit margins remained slim. The continual addition of unrelated business lines created a somewhat unwieldy corporate organization, and the company found it difficult to focus on a primary business, be it agricultural equipment, construction equipment, or truck production. An overly conservative management, combined with a rigid policy of in-house promotions tended to stifle new management strategies as well as technical innovation. Products with increasingly ancient technology continued in production despite their marginal addition to sales. Worse, IH not only faced a threat of strong competition in each of its main businesses, but also had to contend with increased production costs, primarily due to labor and government-imposed environmental and safety regulations.
 

Downfall
 

In 1979 IH named a new CEO, who was determined to improve profit margins and drastically cut ballooning costs. Unprofitable model lines were terminated, and factory production curtailed. By the end of the year, IH profits were at their highest in 10 years, but cash reserves were still too low. Union members became increasingly irate over production cutbacks and other cost-cutting measures. In the spring and summer of 1979, IH began short-term planning for a strike that seemed inevitable. Then on November 1, IH announced figures showing that president and chairman Archie McCardell received a $1.8 million (in 1979 values) bonus. McCardell sought overtime, work rule, and other changes from the UAW, which led to a strike on November 2, 1979.

Soon after, the economy turned unfavorable, and IH faced a financial crisis. The strike lasted approximately six months. When it ended, IH had lost almost $600 million (in 1979 value; over $2 billion today).

By 1981 the company's finances were at their lowest point ever. The strike, accompanied by the economy and internal corporate problems, had placed IH in a hole that had only a slim way out. Things only got worse until 1984, when the bitter end came.

International Harvester, following long negotiations, agreed to sell selected assets of its agricultural products division to Tenneco, Inc. on November 26, 1984. Tenneco had a subsidiary, J.I. Case, that manufactured tractors, but lacked the full line of farm implements that IH produced (combines, cotton pickers, tillage equipment etc.)

Following the merger, tractor production at Harvester's Rock Island, Illinois Farmall Works ceased in May 1985. Production of the new Case IH tractors moved to the J.I. Case Tractor Works in Racine, Wisconsin. Production of IH Axial-Flow combines continued at the East Moline, Illinois combine factory. Harvester's Memphis Works in Memphis, Tennessee was closed and cotton picker production was moved.

The truck and engine divisions remained, and in 1986 Harvester changed the corporate name to Navistar International Corporation (Harvester had sold the International Harvester name and the IH symbol to Tenneco Inc. as part of the sale of its agricultural products division). Navistar International Corporation continues to manufacture medium- and heavy-duty trucks, school buses, and engines under the International brand name.