“The history of Howse Implement Co. Inc. is best told after meeting the man who started the company. C.J. Howse was an entrepreneur from the school of ‘hard work and learn as you go….’” That’s from a document shared by Ben Howse, son of the founder, C.J. Howse, who started the company in 1964. The document ends with words like “liquidate” and “scrap,” referencing the company’s recent unsuccessful attempts to crawl out of financial distress and the online auctions of its machines, tooling, inventory, parts and intellectual property (IP).
Part of the Howse legacy remains, however, now in the hands of Doug Addis, owner of Southern Farm Supply, who has carried the Howse line for nearly 35 years.
Howse, based in Laurel, Miss., manufactured over 300 product lines and 2,300 models of equipment, including rotary cutters, disc harrows, grader blades, box blades and post-hole diggers. Southern Farm Supply of Union Grove, N.C., is a Case IH dealership, serving central and western North Carolina as well as a full-service service shop and a shortline distributor to many manufacturers.
Addis bought the IP and some parts inventory at the online auction held this past spring by Yellow Tag Auctions. “I absolutely could not believe they could go out of business. I just kept thinking Ben would find a way to keep it going. I had not given the intellectual property much thought until about 2 weeks before the auction. I have always been the type of owner who is committed to serving my customers and I wanted to be there for them for repair parts for years down the road,” says Addis.
Building a Company
C.J. Howse started his career as a mechanic and began gaining notoriety in the 1950s among area farmers when he fixed the knotting issues of the first Massey Ferguson Model 10 hay balers. In the early 1960s, he began to distribute and represent farm equipment manufacturers throughout the southeast. That relationship ended after several years, and C.J. found a way to maintain connections with his long-time customers. Ben Howse describes what happened next:
Howse Manufacturing’s assets including its intellectual property, equipment, tools and parts were sold through an online auction hosted by Yellow Tag Auctions in late March.
Photo Courtesy of: Yellow Tag Auctions
“With his broad knowledge of mechanics and manufacturing knowledge gained by visiting equipment manufacturers, C. J. drafted rough prints of the equipment he needed to fill orders and went to see R. A. Irby, an old friend at Laurel Machine & Foundry. In January of 1964, C. J. started Howse Implement Co.
“With a small loan from First National Bank of Laurel, he bought a welding machine, drill press, mechanical hacksaw, other tools and raw material for his first orders. Laurel Machine & Foundry helped C. J. fabricate and finish the first orders. C. J. painted, assembled, loaded and delivered the orders and also collected payment as he delivered the products and took orders for more products. The sell-manufacture-deliver cycle had begun. Buildings were constructed; new and used machines were purchased; and new products were developed. By 1970, Howse was a major shortline manufacturer.”
A series of acquisitions in the 1970s led to the manufacturing of gearboxes and driveshafts in house. (See “Major Milestones for Howse Implement Co.”)
1964 C.J. Howse founds the company in Laurel, Miss.
1964-1970 Solid customer base established a foundation for future growth.
1970 Purchase of Perfection American led to manufacturing all gearboxes in house.
1972 Purchase of the agricultural driveshaft assets of Mechanics Universal led to manufacturing of all drive shafts in house.
1972–1980 Expansion of facilities to manufacture rotary cutter blades, disc harrow blades, blade bolts, disc axles, forged gears, segmented tires, wheels, etc. Heat treat and carburizing equipment were also installed.
1980 Automation of gearbox and driveshaft manufacturing process with robotic-fed computer numerical controlled lathes and processing centers.
1984 Automation of welding processes with welding robots.
Late 1980s-early 1990s Installation of machinery to make nuts, bolts, washers and all fasteners, as well as plastic molding equipment.
Mid 1990s Purchased second foundry; began to make all gear box castings from ductile iron and disc harrow parts from class 30 gray iron. At this time, Howse was totally integrated with about 500 employees making everything from raw materials.
2003 First powder coat line for small equipment and parts. Market shift from lowest price product to better quality at good price.
2006 Providing 6 color options to match major tractor manufacturers.
2008 Expansion with new automated powder coat system.
Ben and his brother Barry spent their teenage years learning welding, painting and fabrication skills, as well as the farm equipment business in general. Ben became production manager in 1970 after the manager in place quit without notice. Barry became a supervisor in 1972. Between 1972 and the early 1980s, there were a series of facility expansions including a new forge shop, heat treat facilities and a robotic welding system.
Expanding the Legacy
Ben was appointed president in 1986 and he and Barry secured a $1.5 million loan to build a new facility and machinery. “Dad’s goals were to build everything in house. Barry and my goals were to increase sales and maintain or improve margins,” Ben says.
The new 67,500-square-foot manufacturing facility was completed on Feb. 27, 1987 and the next day, a tornado demolished the building. “A new building was ordered and was delivered and constructed in 45 days. The employees helped clean up and continued production under extreme conditions. Even with this terrible setback, sales and production grew 51% in 1987 and 57% in 1988,” says Ben.
The company continued to expand and adapt under Ben’s leadership, purchasing a second foundry and adding its first powder coat line. At one point, they made every component that went into its products, and later purchasing component parts from China, India, Germany and other countries. All of these changes meant a marked shift from Howse being known for producing the lowest price product to a company that produced a better quality product at a good price, Ben says.
Ben describes the following boom years. “In 2005, a new 15-foot flex wing rotary cutter was developed. We also developed an ATV line of equipment for the hunting and recreational group. Over 70 new models of products were introduced in 2006, along with the option of 6 different paint colors to match the major tractor manufacturers. These products and options boosted sales over the next 5-10 years, opening up new markets with new customer groups. A much needed $6 million expansion began in 2006 and was completed in early 2008. Business was booming and we could not keep up with demand,” Ben says.
That expansion was completed as drought was starting in several states, becoming nationwide in 2012, hurting equipment sales. There was more bad news on the economy front as the housing market hit bottom. However, there were also opportunities during the next few years.
“Buying the intellectual property would be instrumental in being able to supply parts to our customers …”
— Doug addis, Southern Farm Supply
“Dealers carrying the major lines were having trouble competing with the big box stores. Their products could not win over the box store customers. Our product was priced between the majors’ products and the box stores and we were offering better quality products than other shortliners. It was a sale that dealers wouldn’t get otherwise,” Ben says.
In 2013, Howse secured dealer floorplan financing for its products through GE Capital, Commercial Distribution Finance. “We had established 6-month and 12-month floorplans. This allowed us to broaden our dealer base substantially in 2013 through 2016,” Ben says. The floorplan arrangement also helped them transition from a distributor model to a dealer-direct model as the company was coping with manufacturer demands for dealer purity.
Southern Farm Supply SouthernFarmSupply.com
Founded: 1994. Recently purchased the intellectual property of Howse Implement.
Locations: Union Grove, N.C
Lines: Case IH; Titan Implement, Grasshopper, Bush Hog, Woods and trailers made by Delta, Homesteader, Hudson and Hurst. Southern Farm Supply manufactures a full line of tractor-mounted sprayers and has relationships with other fabricating shops to build several other products. Various products are imported from overseas to complement its inventory.
“The major tractor line dealer purification demands and deals with shortline manufacturers added to sales problems. ‘Mom and pop’ used tractor and shortline-only dealers were dying off and farm equipment auction attendance fell. The weekend farmers had less farm and mechanical skills and turned to main line dealers who could work on their equipment since they could not. This drove down sales in the remaining shortline-only dealers,” Ben says.
The company made changes to adjust to weather, economic and market challenges. “We cut back production, bulk purchasing, number of employees and inventory of finished product to match sales. We increased the number of models of equipment we were offering to try to create a one-stop shop for ag equipment dealers. And we made changes to models, such as upgrades and aesthetics, to improve marketing of products.
“In order to offer this many products to be delivered quickly, inventory was increased to hold stock on all parts needed to supply to customers in a timely manner. The continued need to increase inventory required more working capital. Due to its major bank cutting back on the line of credit, Howse began to ‘ride’ vendors, trying to get ahead enough to pay back the bank. The drought and economic downturn kept going until Howse had reached bottom on financial resources and had to file Chapter 11 bankruptcy on Aug. 25, 2014,” Ben says.
Negotiating a Deal
Howse continued efforts to rescue the company. “In November 2014, I fully expected to get my plan approved and expected to get back running in January 2015, but the banks continued to reject everything we sent them. It was a one-way street. They never gave me something to work with. They wanted all of their money right then, and there was no option of paying back over time,” Ben says.
Southern Farm Supply of Union Grove, N.C., is a Case IH dealership serving central and western North Carolina as well as a full-service shop. They are also a shortline distributor for many manufacturers. Southern Farm Supply now owns Howse Implement’s intellectual property.
Photo Courtesy of: Southern Farm Supply
He did finally get a plan approved in December 2015, but by February 2016, the banks increased the payments and didn’t allow skip payments during the down months of November-February, an arrangement the company had previously operated under. Another blow during that timeframe was Wells Fargo’s purchase of GE Capital and the discontinuing of the floorplanning arrangements for dealers.
“I probably should have ‘thrown in the towel’ then, but I was still looking for a way to keep it going. When Wells Fargo bought GE and cut the floorplans, that pretty much was the end of it,” Ben says.
Arrangements were being made to sell the company or liquidate the assets. “A deal was near to closing and Howse closed its doors on Dec. 22, 2016, thinking we would reopen under new ownership in January 2017. The deal fell through due to the bank who held the real estate loan refusing to sell or lease the main facility to the new owner,” Ben says.
Selling at Auction
Howse never did re-open, the negotiations were over and auction was the next step — a “tragedy of an auction,” Ben says. In February, Plainfield Equipment South, a salvage contractor based in Hickory, N.C., bought the majority of the machines and tools. “It was a shame to see all that tooling, fixtures and machinery loaded on scrap trucks and hauled to the scrap yards,” Ben says.
Scott Mortimer, owner of Plainfield Equipment South, says when they went on site to pick up the equipment, he noticed a large amount of assets still remaining. “We purchased 75% of the machinery in the first auction. When I arrived at the facility, I saw the plant was full of stock and parts. I started speaking with Ben about the possibility of another auction,” Mortimer says. He then contacted the bank that held the assets and purchased all that remained, including the intellectual property.
“I’m not a manufacturer. A lot of times when we buy at an auction, we’re buying scrap,” Mortimer says. For other equipment that doesn’t go for scrap, he often ‘parts’ it out and works with Yellow Tag Auctions, Spartanburg, S.C., so Mortimer approached them regarding an auction of the Howse assets.
Howse Starts Over
The Howse story takes another turn — this time during the 20-hour round-trip road trip from Union Grove, N.C. to Laurel, Miss., that Doug Addis and his son Gale took in February, a month before the online auction, to view the assets. Since his dealership, Southern Farm Supply, had carried the line for decades, he was looking for a way to continue serving his customers.
Ben Howse, Howse Implement Co.
“I fully expected to get my plan approved…”
“I had been in communications with the entire Howse team for all those years and that built up a friendship, not just a business friendship, but a friendship. Ben kept me aware of what was going on with the company,” Addis says.
“During the 20-hour drive, we were sitting there talking about thefuture for our customer needs. We were only going to be able to buy a certain degree of parts. The more we thought about it, the more we thought that buying the intellectual property would be the instrumental piece in being able to supply parts to our customers,” he says.
On auction day in late March, Addis placed the second bid on the IP. “I placed my bid about 30 minutes after the auction started and it moved rapidly from there. There was about 6-8 bidders for the first hour. It boiled down to two of us and we fought until the end. I have never felt as much stress in a day’s work as I did that day. It was a relief to win the bid and I was very happy, but I didn’t like the amount of money that we had to pay. It went for almost double of what we had expected, but I still think it was a good investment for the future,” he says. Along with the intellectual property, there were about 40 pallets’ worth of parts purchased.
Addis describes the days since then as “a pleasant and stressful eye-opening set of events” as they’ve taken over the company and started handling calls — requests that have been backed up since the company closed its doors in December.
“We have 20 employees and we are taking an extra 100 calls a day and handling an extra 40-50 emails and you have to call those customers as well to make sure they truly are ordering what they want to be ordering. When you add all of that to your existing employee base, it’s a struggle.
Southern Farm Supply carries Case IH, Titan Implement, Grasshopper, Bush Hog, and Woods as well as trailers from Delta, Homesteader, Hudson and Hurst.
Photo Courtesy of: Southern Farm Supply
“The influx of orders from the online shopping cart, www.HowseImplement.com, has also added a new direction for us to serve our customers’ needs. We are having to adjust our stocking levels in order to be able to have product for the orders,” Addis says.
He says that struggle has only been internal and customer orders are being filled and questions answered. “I think we’re having such positive results because of the knowledge our staff has with Howse parts,” Addis says.
In terms of what happens next with the line, Addis says, “I have relationships with most of Howse’s vendors, even some of the overseas vendors, and I’m going to be building on those relationships.”
And what’s next for Ben Howse? “I’m not sure yet, whatever God leads me to do next. I need to get past the closing of the Chapter 11. I’m not sure I want to start over and build a new farm equipment manufacturing company this late in life — I’m 65. I have talked to several friends about working for them in sales and marketing and I have experience as an auctioneer and used to enjoy doing that on the side. I will have to do something because I can’t just sit around.”