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The following feature story appeared in the campus publication MOSAIC in April, 1996.
Hans Becherer '57
Guiding the revival of an American giant
For most of the 1970s and 1980s, American manufacturing suffered a long decline in the world's marketplaces. The rise of formidable competitors in Asia and Europe, the high cost of American labor and perceptions of slipping quality all undercut American competitiveness. But in recent years American manufacturing has come roaring back-leaner, more aggressive, far more productive and more profitable than at any time in the recent past.
Deere & Company, the agricultural machinery giant based in Moline, Illinois, felt the chilly winds of international competition that eventually claimed rival International Harvester. But under the leadership of Hans Becherer '57, chairman and chief executive officer, Deere has bounced back so strongly that the Wall Street Journal recently called the company "the model American multi-national corporation."
"A lot of change at Deere has occurred in the last 15 years, a period of more travail and triumph than any in our history, as a major shakeout and restructuring occurred in the farm equipment industry," said Becherer, who joined Deere in 1962.
"Hans has been presiding over a period of important changes at Deere," said Ward Curran '57, George M. Ferris Professor of Economics and a classmate of Becherer's. "Most of what you can say about his career involves the use of superlatives. Deere has avoided the kinds of problems that have dogged other American corporations and it is expanding rapidly."
"Agricultural, industrial, and grounds equipment still make up the heart of our lineup and account for 80 percent of our total revenues," Becherer told an audience of students, faculty, and Hartford business leaders when he returned to campus last fall to deliver the annual George M. Ferris Lecture. But five other divisions now contribute strongly to Deere's bottom line, including parts manufacturing, and credit and insurance operations. Perhaps most unusually, the company now operates a health maintenance organization that delivers care to 300,000 people in five states.
Starting an HMO
The Heritage National Healthplan HMO was originally established to provide care to Deere personnel, but it now provides Deere with some insulation from the cyclical swings that impact agricultural companies.
An economics major at Trinity, Becherer went to work for Deere after serving in the Air Force in Germany and earning an M.B.A. from Harvard. As the son of German immigrants to Detroit, Becherer already had strong international orientation and an interest in manufacturing. "Even in the early 1960s, many of my classmates were interested in financial services and consulting, but I wanted to help make things."
For Becherer manufacturing is a powerfully tangible pursuit, and one deeply rooted in the nation's history. "Trinity was only 14 years old when a blacksmith named John Deere started his own company making steel plows," he said. "Deere & Company does something more significant than selling tractors. By helping customers be more productive, we contribute to a higher quality of life for a good number of those on this planet."
Becherer's early positions at Deere involved primarily international marketing, and he and his family lived in Europe for much of the 1960s and 1970s. His alumni file contains a Christmas card reporting that during 1969 his job as general manager of John Deere Export took him from his base in Heidelberg "to Africa, Scandinavia, Eastern Europe and Russia, the Middle East and India." By the mid-1980s, Becherer was running Deere's worldwide farm equipment and consumer products manufacturing and marketing.
In 1987, in the wake of the worst financial quarter in the company's history, Becherer was appointed president and chief operating officer. In 1989 he was elected chief executive officer and in 1990 elevated to chairman and chief operating officer of Deere.
Becherer said Deere turned around because it kept its sense of its historic identity and its commitment to achieving the best overall return for the company's stakeholders. Deere pays a great deal of attention to the interests of shareholders but also keeps the long-term perspective in mind. "When we list important constituencies, we always mention Wall Street, but we don't stop there. That's because in over 100 years as a public company we've learned that Deere shareholders are best served by a value system that stresses being mindful of employees, customers, and neighbors, too."
Improving continuously
As Becherer looks ahead, he foresees good times for both Deere and American agriculture. The company's future will rest on its capacity to improve continuously and to grow outside North America, perhaps especially in China and Latin America. As China modernizes economically, so will its agricultural industry, which is a very low technology sector at the moment. "We're not merely sitting back and waiting for the market in China to come our way. We're actively pursing joint-venture arrangements there for engines, combines, and industrial equipment.
"The fact is, great companies-and I put John Deere in that class-have a sense of purpose that goes deeper than the bottom line. Yet they still manage to outperform their less inspired competitors," he said.
- Andrew Walsh '79