Ohio-based Redline Equipment, a Case IH farm equipment dealer with four locations in Indiana, says it will invest more than $7 million to construct a new dealership and service center in Logansport. The company acquired 17 acres in the Cass County Agribusiness Park for the larger facility. Redline entered the Indiana market in 2017, having acquired an existing dealership.
In an interview with Inside INdiana Business, Redline Equipment President and Chief Executive Officer Mike Pitts said the current facility is a “hodge podge” of pole barns, and an update was long overdue.
“As we looked around our system, [Logansport] was easily the one with the most need, but quite frankly, probably with the most opportunity as well,” said Pitts. “It’s an underserved market for us. When we got into it, we were very excited because of the amount of farmland over there, and the customer bases there that we really just weren’t serving properly.”
LISTEN: Pitts explains what helped drive the decision.
Redline, which operates 12 locations in Indiana, Michigan and Ohio, says the new facility will house more than 45,000 square feet of climate-controlled space, not only in the showroom but the service center. It will also allow for an expansion of 22,000-square feet.
“The new facility in Logansport will offer a very versatile and dynamic front-of-the-house while providing generous overhead space for an expanded service area. It will be striking, flexible, and filled with natural light. And this is just the opening act. We intend to use this model to spread throughout our geographic footprint in the coming years,” said Pitts.
The building will also include 12 service bays, more than doubling its existing workspaces. The expansion will also require Redline to double its staff once the new site is operational.
“Right now, we can only staff in our current facility probably five, at the most, technicians. We will have the ability to have 12, day one, when this gets opened up,” said Pitts.
At full capacity, the Logansport location will employ over 30 people, according to Pitts.
Paul Cave, Redline’s senior vice president of operations, said the growing adoption of technology in agriculture demands dealers to keep up.
“Our customers are embracing this technology. We’re dealing more and more with larger, bigger fleets,” said Cave. “It’s almost an evolution or revolution in the level of automation and the level of sophistication of the machines.”
LISTEN: Cave further explains the growing adoption of smart-technology in agriculture.
Like many auto dealerships that have open spots in the lots, as carmakers struggle with the microchip shortage, farm implement dealers are also placing fewer combines and tractors on their lots. Pitts says that signals a change in business models by farm equipment manufacturers and the dealers.
“Whether that’s permanent or not, you’re selling more of a catalog at the moment, because you can’t get inventory,” said Pitts, who adds equipment makers have adopted an allocation model, telling dealers how many pieces of equipment they can get. “We can’t order any more than that.”
Pitts says that model isn’t necessarily bad for dealers, as they won’t overbuy and have too many pieces of inventory sitting on the lots for an extended period.
“This allocation model takes that risk factor away from us,” said Pitts.
Sales are one thing, but delivery of the product creates uncertainty for the dealer and the customer. Cave says it’s conceivable the pre-sold orders, stemming from the most recent allocation, will not arrive until next September. Equipment makers are struggling with supply chain issues.
“It’s a much longer term thing, not only for us, but also for our customers,” said Cave. He says farmers are, ”really having to plan their business cycles, their capital purchases, much further out than maybe they ever had thought about before.”
Groundbreaking is scheduled to take place in early 2023, with a grand opening slated for the first quarter of 2024.