QUINCY, Ill.—When Jerry Zubke, who farms 6,000 acres of corn and soybeans near remote Milbank, S.D., was thinking about buying some new tires over the summer for one of his tractors, he was startled to get a phone call from Maurice Taylor, chairman and CEO of Titan International Inc., the leading supplier of wheels and tires to the farming industry.
"Morrie said he was nearby in Fargo and that he was coming out to see me. So I went over to meet him an hour later when his corporate plane landed at our little Milbank airport, and we talked equipment for a while," says Zubke, who ended up spending $15,000 on two tires and rims that day. "He's a very personable salesman who really knows how to take care of his farmer customers."
Those customers have been few and far between the past couple of years as crop prices have nose-dived and farmers have chopped their equipment budgets. Sales of big four-wheel-drive tractors—the bread and butter for Titan, which gets 70 percent of its sales in the agriculture sector—have fallen by a third this year on top of big declines last year, according to the Association of Equipment Manufacturers. First-half revenue for Titan, headquartered in downstate Quincy, fell 16 percent to $652 million. Losses over the period totaled $18.2 million, or 34 cents per diluted share. Wall Street analysts don't see a return to profitability anytime soon.
Taylor acknowledges a sense of urgency, compounded by his mortality. At 72, Taylor—an engineer who worked at General Motors before acquiring bankrupt Electric Wheel in Quincy in 1983 and building it into an industry powerhouse through a string of acquisitions—says he plans to give up the CEO title next year while staying on as chairman. His successor is almost certainly going to be Titan President Paul Reitz, 44, who joined the company as chief financial officer in 2010 from Carmike Cinemas.