Farm implement maker AGCO is growing, but there aren’t enough workers in southwestern Minnesota. What’s a company to do?
JACKSON, MINN. – Amid the cornfields and winding river of tiny Jackson, Minn., hides a boomtown flush with housing tax credits, cheap land, interest-free loans for builders and robots. Yes, robots.
It all started a year ago when Georgia-based AGCO relocated its North American tractor line from France to its plant in Jackson. Since then, it has added a second shift, opened a mammoth visitors center and increased employment from 850 to 1,400.
With U.S. agriculture still soaring, AGCO is expanding again. This time it’s adding a $42 million wing to its facility and 75 more workers to build its custom tractors. But such rapid growth has created a problem for this southwest Minnesota town: Jackson’s jobless rate stands at 3.7 percent and the population hasn’t budged in 13 years, making it tough to staff the factory and find housing for those who want to work there.
“It is a deterrent,” said Mayor Wayne Walter. “AGCO loses good people because they can’t find workers nearby. I think people would move here, if we had the housing.” Some AGCO workers travel as far as 80 miles to get to the plant, sometimes from areas also scrambling for talent such as Windom, where Toro has a plant, or Spirit Lake, Iowa, where Polaris has expanded several times.
Jackson is dangling incentives to get skilled residents and builders to the town. The city is selling large residential lots at half-price, offering builders interest-free loans and seeking federal grants to fund apartment construction.
It’s a plan, but “it’s not a sure thing in a small area,” Walter said.
Part of it is the past recession. “We need a builder to take the risk of not making a profit until they sell,” he said.
AGCO officials aren’t waiting.
In recent years, demand has surged for AGCO’s Challenger and Massey Ferguson tractors and its line of fertilizer and insecticide trucks. Tractors average $250,000, and the 40,000- to 60,000-pound beasts are selling well amid strong crop prices and exports, aging machinery and the trend of larger farms wanting equipment with high horsepower.
To feed its growth, AGCO hired Doherty Staffing Solutions. The firm recruits from colleges in six states, has launched aggressive training and has brought in a small army of manufacturing robots just for the factory to keep pace.
Growing from 850 to 1,400 workers in one year has already fried AGCO’s human resources staff. The factory, which made five tractors a day in 2012, is up to 13 a day and heading toward 15. HR manager Jason Mueller still needs welders, programmers, machinists and engineers. “They are hard to find and they are definitely not wandering off the streets of Jackson, Minnesota,” he said.
Yet the clock is ticking. Stomping across the factory floor, business unit manager Micah Hall spied one electronic control board and noted the higher number of custom-made tractors on his factory floor.
“Going forward, we will need even higher-skilled workers. Few people do what we are doing here,” said project manager Scott Berglund. “It [is] tougher to get the trained people we need.”
Windom residents Sol Miller and Wade Wiens, who both finished their first year on the job, recently scrambled atop 3-ton engines to install hydraulic hoses. Down the line, Alpha resident Caleb Wilking spent his ninth week at the factory mounting fuel tanks the size of freezers. “I haven’t learned all the specs yet. But I am figuring out the job and inspecting it to make sure I didn’t miss anything.”
They ‘don’t complain’
As new employees endure learning curves, robots have no such concerns.
Six self-driving delivery carts scooted wires, washers and other parts to Miller, Wiens, Wilking and 185 other workers on this stretch of 16-acre factory.
“The robots save you two to three people that you would otherwise have walking the line,” said manager Micah Hall. “The robots are expensive. But they are starting to pay off. They are never sick. Never take a day off. Don’t complain and get no benefits.”
For Mueller, the human resource manager, the robots spell relief. He can’t imagine having to find even more workers to do all the robots do with exacting “precision, quality and speed.”
At the other end of the factory, blue sparks flew off a $2 million robot that soldered ribbons of molten metal on the chassis fabrication line. A dozen more robots are on their way.
One of them — a faster, two-armed welding wonder -- arrived July 8. Once installed, it will weld an entire axle frame onto a chassis in seconds. Another automated welder arrives next week, followed by several computerized lasers that can cut intricate tractor parts from thick steel like butter.
All the technology delighted customer Eric Watson. He zipped in from Renville this month to test drive and take home two Challenger tractors fresh from the factory floor.
“It’s amazing to see how the technology has advanced. … It’s a thrill for a farmer,” said Watson, who grows corn, sugar beets and soybeans.
AGCO’s custom-made tractors can be as decked out as any Cadillac. Options include GPS, automated steering and even precision-guided mapping so farmers like Watson can deposit perfect rows of seeds according to computer-generated patterns.
AGCO’s North American sales (from Jackson and two factories in Kansas) rose 10 percent to $624 million during the first quarter. Globally, quarterly sales grew 5 percent to $2.4 billion.
AGCO’s rapid growth in Minnesota doesn’t surprise Ernie Goss, director of Creighton University’s economic forecasting group. “Farm income really began to take off in January 2009,” he said. “But one of the keys they face … is labor and finding the talent they need.”
But if the city builds up, will the workers come?
Yes, insists Goss.
“There are a heck of a lot of people who would move there from Detroit or Cincinnati or even Minneapolis to take these jobs, especially if they can get housing or land at a cheap price.”