Stihl will be 'preferred supplier' for John Deere dealers
Posted to: Business Virginia Beach
By Philip Walzer
The Virginian-Pilot
© July 30, 2008
VIRGINIA BEACH
Stihl Inc.'s chain saws and weed whackers will be getting lots more exposure.
John Deere, the manufacturer of tractors and other agricultural equipment, announced Tuesday that Stihl will be the "preferred supplier" of hand-held power tools for Deere's dealers in the United States and Canada.
That gives the company's dealers the seal of approval to stock Stihl products instead of those from other manufacturers.
Stihl, a German power-tool manufacturer, has its U.S. headquarters in Virginia Beach, off Lynnhaven Parkway. It is the city's largest manufacturer. The agreement covers all of Stihl's products and takes effect immediately, said Stihl's president, Fred Whyte.
"From a prestige standpoint for us, I think it's really a marketing coup," he said. "It's an opportunity, quite obviously, to co-brand with one of the leading companies in the world, not only in outdoor power equipment, but also in construction and the agriculture business."
Stihl employs about 1,950 people in Virginia Beach. Whyte said the local production facility has already expanded shifts and will probably hire more people next year, though he said he did not know how many.
The agreement doesn't ensure that every John Deere dealer will carry Stihl products, said Bob Barbour, group director for marketing operations and customer support for John Deere in Cary, N.C.
"It's not a mandatory requirement," Barbour said. But he predicted that "this relationship will be highly supported by John Deere dealers."
John Deere's Web site lists more than a handful of local dealers, in cities including Chesapeake, Virginia Beach and Williamsburg.
At John Deere locations that carry them, they will be identified as Stihl products and will feature Stihl's trademark orange color, Whyte said.
The Stihl tools, Barbour said, will replace "John Deere-branded tools" made by other manufacturers.
"We're aligning ourselves with another leader in the outdoor power equipment industry," Barbour said. "This will allow us to take our resources to support other growth strategies."
Stihl products often cost more than those of its competitors. The company says consumers are paying for top-of-the-line quality and scrupulous service. Stihl products can be bought only at the company's 8,000 independent dealers nationwide. They are not available online or in big-box outlets.
The agreement with John Deere doesn't change that philosophy, Whyte said.
"Is this going to lead to big boxes? Absolutely not," he said. "The Deere dealers have to meet all of the same terms and conditions that we have in place for our current Stihl dealers. There were no special deals cut."
About 500 John Deere dealers already have been carrying Stihl tools, Whyte said. Barbour declined to identify the total number of John Deere dealers in North America.
Stihl, a privately held company, does not release sales totals, but officials have said sales have grown for at least the past 15 consecutive years.
"Business is very, very good," Whyte said Tuesday. "Despite the economic times that we're all reading about, this month will be the largest sales month in the history of the company."
Stihl was founded in 1926 in Germany. It launched its operation in Virginia Beach in 1974.
John Deere, founded in 1837 and based in Moline, Ill., sells agricultural, construction, forestry, golf and lawn equipment. In fiscal 2007, it reported net sales and revenues exceeding $22 billion.
Philip Walzer, (757) 222-3864,
[email protected]