Martin Richenhagen heads Duluth-based AGCO Corp., the world’s third-largest maker of agricultural equipment, including Massey Ferguson and Challenger tractors.
But the German-born executive didn’t arrive in the CEO’s office by the typical route.
Richenhagen, who speaks several languages, studied Catholic theology and Romance literature at the University of Bonn. He was a college instructor for the first five years of his professional career.
But Richenhagen also loved riding horses, and ran a horse stable to help pay for his continuing studies.
And there, he not only discovered that running a business “is a very interesting thing to do,” he said, but he also made the contacts that helped him launch his corporate career.
One of his equestrian business clients offered him a job at a German steel mill. That began his climb through various manufacturing firms that eventually landed him in the top post at AGCO in 2004.
“My intention was never to become the chairman and CEO of a big company,” he said. “I was always interested in doing new things, in learning.”
Q: These days, there’s a lot of turnover among CEOs and they don’t inspire love from much of the public.
A: Yeah, that’s a little American disease. ... Turnover is high. I think [average CEO tenure] is 2 1/2 years or something like that. So, I’ve made it already in a way, with eight years [on the job]. ... I try to avoid things that I never liked being done by my bosses. When you do that, people start to like you, I think.
Q: Despite a strong financial performance, AGCO’s stock recently dropped to a 52-week low and wasn’t much higher than five years ago. What’s going on?
A: It’s not related to what we are doing. We are going down pretty much with our industry and the market. It’s a little scary because we will have a record year. ... Some politicians deliver a speech and your stock goes down 10 percent.
Q: How’s the financial crisis in Europe likely to affect AGCO?
A: Not at all. Demand for farm product is very high. Commodity prices are very high, and that means the farm incomes are pretty good.
Q: So you’re not worried about the European issue blowing up?
A: No. First, I’m a little bit more optimistic. The media sometimes get a little too excited too fast. ... Second, the countries which suffer right now [Greece, Ireland, Spain, Portugal, etc.] are not really the engine of economic growth in Europe.
Q: The economic picture isn’t much cheerier in North America. Are you worried about farmers’ buying mood?
A: No. [But in general] what business needs to grow is, first of all, consistency. If you change the regulation all the time, that’s very bad. Second, we need tax reform very desperately. ... If you repatriate profits from overseas, you are taxed again. And that’s the reason why American companies invest the money they make [overseas] outside America instead of inside America.
You’ve heard about Herman Cain? [The Georgia presidential candidate is advocating a major overhaul of the federal tax system.] He was on my board for many years. He had to retire when he decided to run.
Q: A common grumble these days is that corporations are sitting on large cash reserves and aren’t hiring or expanding, despite good profits. How does that fit into the picture?
A: This year we’ll hire ... around 1,000 people globally. We are building a tractor factory in Jackson, Minn., for products which so far have been imported to the U.S. from France. ... Also, I don’t think this is a fair statement. If you ... own a company, you wouldn’t just hire people just for charity. You hire them when you need them. We invest a lot. This year we will invest about $320 million [in] capital investment, mainly in capacity, new factories.
Q: The drop in the stock market may imply that many people expect a recession. Are you expecting another recession?
A: I’m not. ...We are not in a double-dip recession. I think there is a certain danger that we [will] talk ourselves into a recession.
Q: AGCO faced a kickback scandal a few years ago in the United Nations Oil for Food Program. [Without admitting or denying guilt, AGCO in 2009 paid more than $20 million to settle allegations that it sent $5.9 million in kickbacks to Iraqi government officials in 2000-2003.] How did that affect AGCO?
A: Not at all. This happened before I joined the company, but I have to say basically everybody in the industry did it [by paying typical dealer’s commissions to the Iraqi secretary of agriculture.] This was all declared in the paperwork. It wasn’t hidden, so I found it a little strange that the [U.S. Securities and Exchange Commission] investigated.
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Meet Martin Richenhagen
Job: Chairman and chief executive officer, AGCO Corp.
Age: 59
Family: Married; three adult children
Residence: Duluth
Currently reading: “Schweigeminute” (“Moment of Silence”), a novella by German author Siegfried Lenz
Favorite toy: A black 1958 Porsche speedster convertible
About the Author
