Gehl Company History

Address:

143 Water Street
West Bend, Wisconsin 53095-0179
U.S.A.

Telephone: (414) 334-9461
Fax: (414) 334-1565

Public Company
Incorporated: 1904 as Gehl Brothers Manufacturing Company
Employees: 842
Sales: $159.6 million (1996)
Stock Exchange: NASDAQ
SICs: 3523 Farm Machinery and Equipment; 3531 Construction Machinery

Company Perspectives:

"Gehl Company will manufacture and distribute quality equipment to selective segments of the construction and agricultural markets at a fair return to our shareholders."

Company History:

The Gehl Company is one of the oldest manufacturing firms in the midwestern United States. The company makes a wide range of construction equipment, including such products as skid loaders, rough-terrain telescopic forklifts, and paving equipment distributed through independent dealers for the construction industry. In addition, Gehl Company manufactures agricultural equipment used in day-to-day livestock farming and is widely recognized as the leader in the non-tractor manufacturing industry, with a comprehensive product line of hay-makers, forage harvesters, feed makers, manure handlers, and materials handlers. The company has been on the cutting edge of recent technological developments in the construction and agricultural equipment industry, and has introduced highly innovative and durable machinery, including the 35 Series Skid Loaders, the 1300 Series Scavenger Manure Spreader, and the 2345 and 2365 Disc Mower Conditioner models, both with 12-foot wide swing frame disc mowers. Headquartered in West Bend, Wisconsin, the company has distributed its products overseas to Latin America, Asia, and Europe for nearly 50 years.

Early History

The roots of Gehl Company go back to 1859, when Louis Lucas opened an iron foundry in central Wisconsin. Lucas established his business in order to manufacture plows and cultivators, and for the repair of farm implements. As more and more immigrants from Europe swept into the Midwest, settled down, and started farms of their own, they came to rely heavily on the services provided by men like Lucas.

By 1880, Lucas was joined by M. Silberzahn, a German immigrant with experience as a blacksmith. The two partners soon came up with one of the most important innovations in agricultural machinery during the late 19th century, the Hexelbank, a feed cutter which replaced the need to chop livestock feed by hand, usually with a beet knife. The popularity of the hand-cranked Hexelbank grew so rapidly that is was soon used not only for sugar beet crops but for other root crops as well.

In 1902, John W. Gehl acquired part interest in the firm of Lucas and Silberzahn. One year later Gehl, who had been raised on a homestead in central Wisconsin, asked his brothers Mike, Henry, and Nick to join him and purchase all the assets of Lucas and Silberzahn. By 1904, the Gehl Brothers Manufacturing Company was producing a wide range of basic farm tools and, of course, the extremely lucrative Hexelbank. During the next two years, the company prospered and the four brothers began to consider the manufacture of more innovative farm equipment.

Unfortunately, in 1906 the company plant and its entire inventory was destroyed in a fire. But the Gehl brothers were undaunted, and rebuilt the company factory through the sale of stock, and by reaching deep into their own pockets. Two years later, the Gehl brothers introduced a larger feed cutter, an elevator, and began producing stone and wood-stave silos. Two additional innovations during this time included an advanced-design, engine powered recutter for malt grain, corn cobs and stalks, and a new silo filler, which quickly developed into the standard for the farm equipment industry.

As Gehl Company continued to grow during the early part of the 20th century, the firm developed a reputation as one of the most innovative and reliable farm equipment operations in the Midwest. By the 1920s, the company was one of the undisputed leaders in the region. With the growth of the dairy industry during the decade, farmers were looking for a more convenient way to grind homegrown grains. The company responded to this need by developing the Gehl hammer mill, which would dominate the market for the next 30 years. At the same time, in addition to the stationary hammer mill, the company developed a portable truck-mounted mill. One of the most common sights during the late 1920s throughout central Wisconsin was the portable truck-mounted mill, stationed in the back of a Chevy truck, traveling from farm to farm grinding feed. In 1927, Gehl initiated the manufacture of manure spreaders, which rapidly become one of the company's most popular products. The Gehl manure spreader was developed with a number of new features, including an auto-style steering mechanism rather than the normally-produced wagon style. The new style of steering allowed the operator to position the spreader much more precisely under a manure carrier or in a small space such as a barnyard, and also made it more convenient and easier to steer through the narrow gates and lanes so common to farmland terrain.

The Great Depression and World War II

Gehl Company weathered the volatile economic climate of the Great Depression as well as, and perhaps better, than any other firm in the United States. When Franklin Delano Roosevelt issued his Bank Holiday proclamation after his inauguration in 1933, the country was beset with bankruptcies, foreclosures, and lack of public confidence in the banking system. Yet farm foreclosures didn't seem to be as common in Wisconsin as in other parts of the country, like the Plains states, and farmers continued to order and purchase new farm equipment from Gehl. The company was able to retain most of its employees, albeit on a somewhat reduced work week.

As the country began to recover from the Depression, Gehl Company benefitted from the economic activity. During the late 1930s, there was a dramatic expansion of dairy herds and farm feedlots which continued into the early 1940s. With America's entry into World War II on December 8, 1941, the day after the Japanese surprise attack on the U.S. Naval Base at Pearl Harbor, a farm labor shortage began to hold back any further expansion of dairy herds and farm feedlots. One of the most obvious needs, therefore, was a labor-saving method of putting up hay and putting corn into a silo. In order to respond to the requests of the U.S. government for labor-saving farm machinery, not to mention the needs of farmers throughout the Midwest, the Gehl Company designed and developed a silo filler that was placed on wheels and pulled across the fields with a wagon-box behind it. This innovative corn chopper was welcomed by farmers everywhere in the United States, since it was far easier and less time-consuming to unload chopper corn into a blower than it was to throw corn stalk bundles with a pitchfork into a silo filler. It was also just as easy and convenient to make hay with a Gehl chopper. A man pulling a Gehl chopper and wagon into a field of hay could blow two acres of hay into a wagon in no time at all.

One of the most important changes that occurred within the Gehl Company during the late 1930s and early 1940s was the change in management and leadership at the firm. As the original Gehl brothers grew older and either retired or passed away, each of them was replaced by a second-generation Gehl family member. By the mid-1940s, the second generation of four Gehl brothers was supervising the operations of the company. Mark Gehl supervised engineering and manufacturing, Al Gehl was head of all the company's business and financial affairs, Carl Gehl was responsible for developing the firm's export market, while at the same time supervising the personnel, labor relations and legal affairs departments, and Dick Gehl assumed the responsibility for selling and marketing all the Gehl products. Interestingly, the four Gehl brothers managed the company as a committee by mutual consent, and without any formal titles.

The Postwar Era and Agricultural Changes

By the end of World War II, Gehl Company was ready for the expansion that came with America's role as the "breadbasket" of the world. Although there wasn't much technological innovation and change during the immediate postwar years, the four Gehl brothers had positioned themselves carefully to take advantage of the agricultural changes that were on the horizon. By the early 1950s, however, the farmland of the American Midwest and Plains states began to experience dramatic and far-reaching changes. Due to the American public's demand for more livestock and dairy produce, livestock numbers began to rapidly increase, along with the size of the average farm. This expansion of farming activities led to the need for labor-saving machinery, and resulted in such items as the homemade, rear-loading forage box as inadequate to meet the task at hand.

Gehl invented a front-unloading forage box that placed chopped forage into a blower which then enabled a farmer to put forage into a 100-foot silo more quickly than any homemade box could unload it. The high capacity blowers and innovative unloading boxes soon became standards in the farm machinery industry. At the same time, Gehl introduced a self-propelled forage harvester. The first such machine in the industry, the harvester was powered by a Continental engine that soon set new records in chopping capacity. The self-propelled harvester also became one of the most popular products of the company, and could be seen filling the large silos on farms throughout the Midwest and Plains states.

In addition to the design and development of new farm machinery, such as the self-propelled forage harvester and the front unloading forage box, the company was instrumental in developing better ensiled ear corn. Working closely with major universities in the Midwest and drawing on the company's long experience with recutters, Gehl came up with a faster, more convenient, and economical way to ensile high-moisture ear corn. By designing and manufacturing a silo-based recutter that could process just over 400 bushels of ear corn an hour, the cut feed when mixed with alfalfa haylage could supply enough food for thousands of dairy herd cows. The collaboration between Gehl Company and research facilities in the Midwest provided the firm with a growing reputation as one of the most innovative and experienced farm machinery manufacturers in the United States.

Growth and Expansion During 1960s, 1970s and 1980s

In 1960, Gehl manufactured what has been regarded as the very first efficient green chop machine. Replacing the traditional hammer-type flail shredder, the more efficient curved flail knives machine, with a 72-inch cut and a blower, provided farmers with a reliable machine they could use day after day. In fact, the design of this model was so good that it was still in use during the mid-1980s. In 1968, the company introduced newly designed cylinder-cut forage harvesters. This model quickly led Gehl to manufacture the largest capacity choppers ever designed. During the same year, the company also introduced the pull-type mower conditioner. Especially designed and introduced for farmers who refused to invest in a self-propelled machine, the pull-type mower provided the best alternative method to cut alfalfa.

In 1970, Gehl Company management decided to enter the construction machinery industry and introduced its very own skid steer loader. The Gehl loader had unique controls that enabled the driver to control all the machine's functions with his hands and, as a result, became very popular within the construction industry. By 1973, the company had created a marketing subsidiary in West Germany, Gehl Gmbh, to sell its skid loaders in Europe, the Middle East, and Africa markets. Gehl also designed another first within the construction machinery industry--a totally hydraulic grinding mixer.

The decade of the 1980s was the best ever for the company. Gehl experienced explosive growth in all of its construction and agricultural equipment product lines. Six years of increasing sales and expansion-oriented acquisitions policies pushed revenues up by 220 percent; net sales skyrocketed from $38.5 million in 1985 to $174.9 million by 1990. The company owned four manufacturing facilities, located in West Bend, Wisconsin; Lebanon, Pennsylvania; Madison, South Dakota; and Yankton, South Dakota. With its marketing subsidiary in West Germany, Gehl Company was planning a strategic move into worldwide markets for construction and agricultural equipment. And management, more confident than ever, was ready to assume its place along side of the industry giants--Case, Deere, and Caterpillar.

The 1990s and Beyond

During the early 1990s, however, everything began to change. A slower economy and higher interest rates placed Gehl, still in its expansionist mode, in trouble. By 1992, management was forced to scale back its strategic acquisitions policy and re-evaluate its future policies. A new management team, more conservative and more than willing to eliminate unprofitable product lines, was brought in to reorganize and revitalize the company. Although sales had fallen to $153.5 million in 1995, the company's products began to sell more briskly in 1996.

The company continued to emphasize its construction equipment product line, with newly designed skid loaders, rough terrain telescopic forklifts, Power Box asphalt pavers, and an improved line of material handlers. At the same time, Gehl relied heavily on its agricultural equipment product line, which included machinery for hay making, forage harvesting, feed making, manure handling and materials handling. Many of the company's agricultural products, such as the disc mower conditioner and its line of forage harvesters, have become standard equipment in the industry.

After its expansion and acquisition activities during the 1980s, Gehl Company rediscovered its niche. The company concentrated on designing and manufacturing high-quality, dependable, and economical construction and agricultural equipment for discerning customers. Perhaps one reason behind this resurgence was that the new management team formed during the early 1990s included William D. Gehl, one of the descendants of the founders, as president and chief executive officer.

Principal Subsidiaries: Gehl GmbH; Gehl International

Gehl Company History

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