Massey Ferguson
sseyu
[pic]
Massey-Ferguson, 1980
Case Report
Executive Summary Massey-Ferguson has been in the farm machinery business since 1847. It grew into one of the largest multinational firms in the world, with operations in over thirty countries throughout the world. Unfortunately, Massey-Ferguson financed its expansion mainly by use of debt and short term credit. Mano-Will Consulting analyzed Massey-Ferguson’s financial statements and conclued that its history of ambitiouus acquisitions and expansion had brought it to financial distress by 1980. In the 1970’s, Massey-Ferguson financed much of its growth using short term debt. In contrast, its competitors maintained debt/capital and STD/capital percentages much lower than Massey-Ferguson. When the economic recession of 1980 depressed markets and reduced demand for farm machinery to depression levels, Massey-Ferguson found itself in the financially distressed condition it was in and unable to compete with its major rivals in the industry. Mano-Will consulting proposes that Massey-Ferguson implement a solution to its current condition in order to remain viable in the industry. Mano-Will proposes that Massey-Ferguson Consolidate smaller loans of the remaining lenders to a select few larger lenders. Furthermore, we recommend that Massey-Ferguson raise new cash. It must eliminate operations in less profitable markets, liquidate its financing subsidiaries (except in North America), and instead, work with governments to provide financing options for its customers. Lastly, it must shift the majority of its operations from the UK to Canada. We recommend Massey-Ferguson initiate these solutions by first forming a committee that will be in charge of its restructuring/refinancing. The committee will develop strategies to identify those markets that will retain operations and those parts of the business that will be eliminated. The committee will conduct a SWOT and Cost/Benefit
[pic]
Massey-Ferguson, 1980
Case Report
Executive Summary Massey-Ferguson has been in the farm machinery business since 1847. It grew into one of the largest multinational firms in the world, with operations in over thirty countries throughout the world. Unfortunately, Massey-Ferguson financed its expansion mainly by use of debt and short term credit. Mano-Will Consulting analyzed Massey-Ferguson’s financial statements and conclued that its history of ambitiouus acquisitions and expansion had brought it to financial distress by 1980. In the 1970’s, Massey-Ferguson financed much of its growth using short term debt. In contrast, its competitors maintained debt/capital and STD/capital percentages much lower than Massey-Ferguson. When the economic recession of 1980 depressed markets and reduced demand for farm machinery to depression levels, Massey-Ferguson found itself in the financially distressed condition it was in and unable to compete with its major rivals in the industry. Mano-Will consulting proposes that Massey-Ferguson implement a solution to its current condition in order to remain viable in the industry. Mano-Will proposes that Massey-Ferguson Consolidate smaller loans of the remaining lenders to a select few larger lenders. Furthermore, we recommend that Massey-Ferguson raise new cash. It must eliminate operations in less profitable markets, liquidate its financing subsidiaries (except in North America), and instead, work with governments to provide financing options for its customers. Lastly, it must shift the majority of its operations from the UK to Canada. We recommend Massey-Ferguson initiate these solutions by first forming a committee that will be in charge of its restructuring/refinancing. The committee will develop strategies to identify those markets that will retain operations and those parts of the business that will be eliminated. The committee will conduct a SWOT and Cost/Benefit
References: History of Massey-Ferguson. Retrieved February 19, 2011. http://www.masseyferguson.com/agco/MF/NA/AboutMF/History.htm