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I think it's a signal of changing market dynamics. Old John Deere just needed to sell the best tractors. They built a reputation and that was good enough. Toda

I think it's a signal of changing market dynamics. Old John Deere just needed to sell the best tractors. They built a reputation and that was good enough. Today's JD needs anti-repair policies, subscription pricing, and closed source code. It's easy to blame JD and maybe they do deserve blame but with so many companies pulled these shenanigans I think it's just a symptom of a wider economic pressures in the industry.

depressedpanda 3y ago
I would say it's more greed than pressure.
cptaj 3y ago
I see why you might think that but is there really data to back it up? Making good products and respecting your customers is a great way to stay in business. I don't see why china selling tractors would change that. If anything, it would matter more than ever.
- vlovich123 3y ago
  Because the vast majority of customers are fickle and estimating true long term cost is very difficult so many make purchasing decisions based on sticker price. Also most farms are corporate farms where I suspect they just deal with JD support contracts as the price of doing business based into their financial models vs having their own.
autoexec 3y ago
> I think it's a signal of changing market dynamics. Old John Deere just needed to sell the best tractors. They built a reputation and that was good enough. So is the changing market dynamic is that John Deere now sells shitty tractors which means they have to depend on DRM and forcing people to get repairs through them in order to be profitable? I suspect the reason so many companies resort to user-hostile anti-competitive practices is simply greed and a willingness to screw over anyone to make an extra buck at any cost. They want to have ever growing profits and growth which means they have to come up with more and more ways to take our money.
- Kon-Peki 3y ago
  Pretty much nobody at Deere thinks they're screwing anyone over. Farmers are still buying Deere equipment for a lot of reasons, including the fact that Deere has by far the best service network during planting and harvest seasons. You will have the least likelihood of disastrous downtime with Deere equipment. Forcing you to get service from the service network makes sure that the service network continues to exist. It's a complicated situation. (I support right to repair, btw)
  - GauntletWizard 3y ago
    A narcissist never means to make other people's lives hell. They are of course the best at everything they do, and if you can't keep up, that is your problem not theirs.
    - chongli 3y ago
      Calling it narcissism is uncharitable. This comment [1] goes a long way towards explaining the whole story. The comparison with electrical peak demand is apt. [1] https://news.ycombinator.com/item?id=38572228 https://news.ycombinator.com/item?id=38572228
      - GauntletWizard 3y ago
        Calling it uncharitable is narcissism. This has been theft and lawfare on a massive scale.
        chongli 3y ago
        I’m a big supporter of right to repair. But now that I’ve read that perspective I don’t think we can have our cake and eat it too. I think if JD loses then we end up in a situation where the service they provided (timely repairs during a crisis in the harvest season) is no longer available at any price. Then what? We probably see higher volatility due to an increase in crop failures, but maybe lower average food prices overall.
jjkeddo199 3y ago
Reform idea: Capital gains tax should be split into two categories: Medium term (1+ year) and very long term (7+ years). Very long term tax would be much lower than today's tax, while medium term would be higher. This reform would reduce MBA's plundering company goodwill and trust for short-term quarterly boosts and reward long-term thinking.
- AlphaOne1 3y ago
  Interesting idea. I have recently been reading John C. Bogle's work (of Vanguard fame) and he seems to be of the opinion, from my interpretation, that short term speculation will have disasterious consequences for the Stock Market and that we need a sort of Sin Tax to discourage such behavior. Your idea would track with that.
  - no_wizard 3y ago
    Not just the stock market. The short term thinking person induced by that has knock off issues all over the place, from environmental to healthcare to the physical harm of workers being pushed too hard in the name of short term profit.
- londons_explore 3y ago
  I think you can get around this by just keeping ownership for 7 years, but promising any profit/loss from 6 of those 7 years to someone else via a private contract-for-differnce.
- AnthonyMouse 3y ago
  You're trying to exacerbate an existing problem with the tax code. If you invest in a company that goes on to become a conglomerate, nearly all of the value is now a capital gain. You can't invest it in something else without inducing a taxable event. Which means that investors prefer to keep their money in existing conglomerates than move it into prospective competitors. It's a huge tax preference to keep money invested in megacorps rather than new challengers. It may even be the cause rather than the solution here. Because selling shares of a company that had previously been growing has a major tax disadvantage, investors then want those companies to keep growing even though they've saturated their market, so they demand abusive practices which are long-term detrimental to the company in order to keep the short-term growth rate competitive. Meanwhile this deprives potential challengers of capital which makes abusive practices more effective by making markets less competitive. It could even make it worse. If you've invested in a company 5 years ago, you're stuck holding it for another two years and now you want to goose the stock price so it peaks when you hit the lower tax rate. We may be better off with the opposite -- allow basis transfers without a taxable event when you're only changing what you're investing in rather than divesting in order to spend the money. Remove the tax preference for abusive conglomerates.
joe_the_user 3y ago
Today's JD needs anti-repair policies, subscription pricing, and closed source code Is JD being evil or are they just bowing to competitive pressure? At a certain point the question becomes hard to answer. When certain behaviors we'd consider awful have been normalized throughout a sector of society (management in this case), there's always an argument about whether someone can be blamed for "just following orders" or "just implementing standard procedures" etc.
- JohnFen 3y ago
  > Is JD being evil or are they just bowing to competitive pressure? That's not an either-or kind of thing.
- Tangurena2 3y ago
  Part of their reasoning why the software needs to be locked down is that tractors are priced based on horsepower and they use software to limit the horsepower of different tractors (which use the same actual engine). Otherwise, one could pay for (numbers made up) a 100 horsepower tractor and then unlock it so that they now have 150 hp. Unfortunately for farmers, everything is controlled by software, so every repair now needs a service call and JD has been cutting back on service techs so that during peak activity times (planting/harvest - where working 24 hrs isn't uncommon) it can be either (a) put your tractor on a flat bed and have it trucked hundreds of miles, or (b) wait a couple weeks. It comes across as evil to me.
lotsofpulp 3y ago
The proof that it is not wider economic pressures is their profit margin trend: https://www.macrotrends.net/stocks/charts/DE/deere/profit-margins https://www.macrotrends.net/stocks/charts/DE/deere/profit-ma... Due to advances in software, they saw an opportunity to increase their profit margins. The question is, are there insufficient businesses that can sell what Deere sells without the restricting software at a lower price? Based on Deere’s success in increasing its profit margins, it seems like the answer is no. So then the question is why are there insufficient businesses? Is selling what Deere sells so high barrier to entry that a new seller will not try? Is it possible to lower those barriers to entry?
- wongarsu 3y ago
  Maybe it just takes longer for the market to react. Selling farming equipment has a local component to it: you need local dealers and a robust service network. Countries also tend have protectionist policies about the market, since farming is of strategic importance. All of this slows down the expansion of competitors. Add to that that the average lifetime of farming equipment is very high. The ~10 years that John Deere has shown this behavior might just be too little for the market to adjust.
- xenadu02 3y ago
  JD does the hard stuff that others aren't as willing to invest in: a large service network with spare parts and spare machines. Harvest time can be make-or-break for farmers. Stuff you don't expect like a large storm at the end of summer can blow over corn stalks. That makes it a lot slower to run the combine at harvest time. If early fall storms are forecast you might literally need to get everyone available out in the field to harvest the corn in the next 3-4 days or you can expect the value of your crop to drop dramatically - everything will be wet and it's no longer warm or sunny enough for it to dry out. The field turns to mud and the grain elevator ain't gonna pay full price for water-soaked corn. Everyone else is in the same boat so every available truck+driver is booked. Every mechanic is already 5 tractors backlogged from all the other farmers with emergencies. Then your harvester/combine dies. If you're with JD... they have a crews of engineers/mechanics and semi trailers loaded with parts driving around the country following the harvest. They will get you going again in a day or two, not 1-4 weeks later when some other dealer can fit you in or when the spare part you need arrives. From JD's perspective that service network and parts stock costs a lot of money to maintain so it is available during harvest. They don't want customers going the cheap aftermarket route 11 months of the year because one month of sales can't sustain harvest support teams long-term. It's similar to peak electric generation capacity. Generator plants aren't economic if they only run 5% of the year at regular prices. In this analogy peak pricing has a limit: it would very quickly make harvesting the crop unprofitable. FWIW I do think it's mostly a money grab by JD. Same reason Chamberlain closed their garage door opener API and has locked down myIQ: they want to force platforms, automakers, etc to pay for access to "their" customers and turn garage door openers into MRR. It's basically free money that you couldn't even imagine prior to the internet.

depressedpanda 3y ago

I would say it's more greed than pressure.

cptaj 3y ago

I see why you might think that but is there really data to back it up? Making good products and respecting your customers is a great way to stay in business. I don't see why china selling tractors would change that. If anything, it would matter more than ever.

vlovich123 3y ago
Because the vast majority of customers are fickle and estimating true long term cost is very difficult so many make purchasing decisions based on sticker price. Also most farms are corporate farms where I suspect they just deal with JD support contracts as the price of doing business based into their financial models vs having their own.

autoexec 3y ago

> I think it's a signal of changing market dynamics. Old John Deere just needed to sell the best tractors. They built a reputation and that was good enough. So is the changing market dynamic is that John Deere now sells shitty tractors which means they have to depend on DRM and forcing people to get repairs through them in order to be profitable? I suspect the reason so many companies resort to user-hostile anti-competitive practices is simply greed and a willingness to screw over anyone to make an extra buck at any cost. They want to have ever growing profits and growth which means they have to come up with more and more ways to take our money.

Kon-Peki 3y ago
Pretty much nobody at Deere thinks they're screwing anyone over. Farmers are still buying Deere equipment for a lot of reasons, including the fact that Deere has by far the best service network during planting and harvest seasons. You will have the least likelihood of disastrous downtime with Deere equipment. Forcing you to get service from the service network makes sure that the service network continues to exist. It's a complicated situation. (I support right to repair, btw)
- GauntletWizard 3y ago
  A narcissist never means to make other people's lives hell. They are of course the best at everything they do, and if you can't keep up, that is your problem not theirs.
  - chongli 3y ago
    Calling it narcissism is uncharitable. This comment [1] goes a long way towards explaining the whole story. The comparison with electrical peak demand is apt. [1] https://news.ycombinator.com/item?id=38572228 https://news.ycombinator.com/item?id=38572228
    - GauntletWizard 3y ago
      Calling it uncharitable is narcissism. This has been theft and lawfare on a massive scale.
      - chongli 3y ago
        I’m a big supporter of right to repair. But now that I’ve read that perspective I don’t think we can have our cake and eat it too. I think if JD loses then we end up in a situation where the service they provided (timely repairs during a crisis in the harvest season) is no longer available at any price. Then what? We probably see higher volatility due to an increase in crop failures, but maybe lower average food prices overall.

jjkeddo199 3y ago

Reform idea: Capital gains tax should be split into two categories: Medium term (1+ year) and very long term (7+ years). Very long term tax would be much lower than today's tax, while medium term would be higher. This reform would reduce MBA's plundering company goodwill and trust for short-term quarterly boosts and reward long-term thinking.

AlphaOne1 3y ago
Interesting idea. I have recently been reading John C. Bogle's work (of Vanguard fame) and he seems to be of the opinion, from my interpretation, that short term speculation will have disasterious consequences for the Stock Market and that we need a sort of Sin Tax to discourage such behavior. Your idea would track with that.
- no_wizard 3y ago
  Not just the stock market. The short term thinking person induced by that has knock off issues all over the place, from environmental to healthcare to the physical harm of workers being pushed too hard in the name of short term profit.
londons_explore 3y ago
I think you can get around this by just keeping ownership for 7 years, but promising any profit/loss from 6 of those 7 years to someone else via a private contract-for-differnce.
AnthonyMouse 3y ago
You're trying to exacerbate an existing problem with the tax code. If you invest in a company that goes on to become a conglomerate, nearly all of the value is now a capital gain. You can't invest it in something else without inducing a taxable event. Which means that investors prefer to keep their money in existing conglomerates than move it into prospective competitors. It's a huge tax preference to keep money invested in megacorps rather than new challengers. It may even be the cause rather than the solution here. Because selling shares of a company that had previously been growing has a major tax disadvantage, investors then want those companies to keep growing even though they've saturated their market, so they demand abusive practices which are long-term detrimental to the company in order to keep the short-term growth rate competitive. Meanwhile this deprives potential challengers of capital which makes abusive practices more effective by making markets less competitive. It could even make it worse. If you've invested in a company 5 years ago, you're stuck holding it for another two years and now you want to goose the stock price so it peaks when you hit the lower tax rate. We may be better off with the opposite -- allow basis transfers without a taxable event when you're only changing what you're investing in rather than divesting in order to spend the money. Remove the tax preference for abusive conglomerates.

joe_the_user 3y ago

Today's JD needs anti-repair policies, subscription pricing, and closed source code Is JD being evil or are they just bowing to competitive pressure? At a certain point the question becomes hard to answer. When certain behaviors we'd consider awful have been normalized throughout a sector of society (management in this case), there's always an argument about whether someone can be blamed for "just following orders" or "just implementing standard procedures" etc.

JohnFen 3y ago
> Is JD being evil or are they just bowing to competitive pressure? That's not an either-or kind of thing.
Tangurena2 3y ago
Part of their reasoning why the software needs to be locked down is that tractors are priced based on horsepower and they use software to limit the horsepower of different tractors (which use the same actual engine). Otherwise, one could pay for (numbers made up) a 100 horsepower tractor and then unlock it so that they now have 150 hp. Unfortunately for farmers, everything is controlled by software, so every repair now needs a service call and JD has been cutting back on service techs so that during peak activity times (planting/harvest - where working 24 hrs isn't uncommon) it can be either (a) put your tractor on a flat bed and have it trucked hundreds of miles, or (b) wait a couple weeks. It comes across as evil to me.

lotsofpulp 3y ago

The proof that it is not wider economic pressures is their profit margin trend: https://www.macrotrends.net/stocks/charts/DE/deere/profit-margins https://www.macrotrends.net/stocks/charts/DE/deere/profit-ma... Due to advances in software, they saw an opportunity to increase their profit margins. The question is, are there insufficient businesses that can sell what Deere sells without the restricting software at a lower price? Based on Deere’s success in increasing its profit margins, it seems like the answer is no. So then the question is why are there insufficient businesses? Is selling what Deere sells so high barrier to entry that a new seller will not try? Is it possible to lower those barriers to entry?

wongarsu 3y ago
Maybe it just takes longer for the market to react. Selling farming equipment has a local component to it: you need local dealers and a robust service network. Countries also tend have protectionist policies about the market, since farming is of strategic importance. All of this slows down the expansion of competitors. Add to that that the average lifetime of farming equipment is very high. The ~10 years that John Deere has shown this behavior might just be too little for the market to adjust.
xenadu02 3y ago
JD does the hard stuff that others aren't as willing to invest in: a large service network with spare parts and spare machines. Harvest time can be make-or-break for farmers. Stuff you don't expect like a large storm at the end of summer can blow over corn stalks. That makes it a lot slower to run the combine at harvest time. If early fall storms are forecast you might literally need to get everyone available out in the field to harvest the corn in the next 3-4 days or you can expect the value of your crop to drop dramatically - everything will be wet and it's no longer warm or sunny enough for it to dry out. The field turns to mud and the grain elevator ain't gonna pay full price for water-soaked corn. Everyone else is in the same boat so every available truck+driver is booked. Every mechanic is already 5 tractors backlogged from all the other farmers with emergencies. Then your harvester/combine dies. If you're with JD... they have a crews of engineers/mechanics and semi trailers loaded with parts driving around the country following the harvest. They will get you going again in a day or two, not 1-4 weeks later when some other dealer can fit you in or when the spare part you need arrives. From JD's perspective that service network and parts stock costs a lot of money to maintain so it is available during harvest. They don't want customers going the cheap aftermarket route 11 months of the year because one month of sales can't sustain harvest support teams long-term. It's similar to peak electric generation capacity. Generator plants aren't economic if they only run 5% of the year at regular prices. In this analogy peak pricing has a limit: it would very quickly make harvesting the crop unprofitable. FWIW I do think it's mostly a money grab by JD. Same reason Chamberlain closed their garage door opener API and has locked down myIQ: they want to force platforms, automakers, etc to pay for access to "their" customers and turn garage door openers into MRR. It's basically free money that you couldn't even imagine prior to the internet.