Wisconsin manufacturer diversified after century in city

Barry Adams
Wisconsin State Journal
Todd Lassanske, general manager of manufacturing at McFarlanes' in Sauk City, looks over one of the company's new Incite tillage machines, Sept. 27, 2017.

MADISON (AP) — The business plan for the McFarlane family was dramatically altered in 2013 when fire destroyed their hardware store and repair shop along the Wisconsin River.

Instead of rebuilding their 70,000-square-foot facility, John, Dick, Stan and Tom McFarlane chose a path that has led to rapid growth, diversification, more employees and ownership of a former Fiskars warehouse three times the size.

Space is not an issue here for 100-year-old McFarlanes'.

The Wisconsin State Journal reports the 210,000-square-foot facility is split roughly equally into three uses. It's home to a store that sells hardware, sporting goods, tractors, lawnmowers, chainsaws and other power tools.

In a Sept. 27, 2017 photo, Dick McFarlane, a vice president and co-owner of McFarlanes' in Sauk City, Wyo., shows off the 70,000-square-foot hardware store and implement dealership . A fire in 2013 destroyed the business, so the family moved to a 210,000-square-foot warehouse that had been used by Fiskars. The building also contains McFarlanes' warehouse, service center and corporate offices.

To the north is the company's warehouse. To the south is the new service center and parts facility, where technicians repair farm vehicles and home and garden machinery. The space is also used for the company's thriving tire business and where more recently the McFarlanes have expanded into full-service automotive work, something that had been limited in the past to tire and oil changes.

The massive operation is a few blocks west of the company's other main business division. In that 110,000-square-foot manufacturing facility, McFarlanes' builds its own line of farm tillage equipment and has a structural steel company that sells primarily to contractors who build commercial and office buildings, schools and medical facilities.

"It has been and continues to be a challenge with all the square footage, but it's going in the right direction," said Dick McFarlane, a company vice president and co-owner. "We're making better decisions and getting new customers, turning product and controlling inventory. We're somewhat unique for the whole country for the diversity we have in a small community."

And like most family businesses, the beginnings were small and narrowly focused.

Earl McFarlane built his first tractor in 1916 in Lodi. A year later, he founded the Wisconsin Tractor Co. and moved production to a 4-acre site in Sauk City. His company manufactured about 500 tractors, but the business folded in 1925 after customers in Western states were besieged with crop failures and could not make their payments.

McFarlane then switched to selling farm implements, but in the 1930s he became dissatisfied with the harrows he sold and built his own spike-tooth harrow — which is designed to help level the ground after it is tilled with a plow and disc. McFarlane's sons, Bob, Jim and Chuck, further diversified the company over the years, which included selling Oliver tractors beginning in 1949.

They also introduced tractor leasing for farmers and the canning industry, and in 1963 opened a 7,200-square-foot farm store. The structural steel division was created in 1987 after the family purchased the machinery from the Kupfer Iron Works in Madison, which had closed two years earlier. Kupfer was founded in 1892 and during World War II used its Waubesa Street facility to manufacture mounts for Navy machine guns and supports for the Fairbanks-Morse diesel engines used in submarines.

In a Sept. 27, 2017 photo, James Johnson builds a spike-tooth harrow, one of the most popular tillage items manufactured by McFarlanes' in Sauk City, Wis. The harrow was first built in the 1930s by founder Earl McFarlane, and in its 100 years the company has diversified into hardware and other retailing, structural steel and auto and power equipment repair.

The modern-day challenges for the McFarlanes include not only heating and cooling the enormous building but changing some of the ways in which decisions in the family business are made. With about 200 employees equally divided between the two locations, the family has realized it needs to be more intentional with its communication efforts and is sharing more financial information with managers who are not family members. The company is also seeking more feedback from its employees about operations.

"They're helping us take an honest look at things we've done for many years as sort of a good-old-boy kind of small family operation that's grown to be significant in terms of size and impact," said Dick McFarlane, Earl's grandson. "It's a huge team effort and we're still in process with that. They're giving a fresh set of eyes to all of the things we're doing and helping the four of us as owners to address big-picture issues."

The spike-tooth harrows that inspired the foundation of the implement manufacturing business remain its bread and butter, but other tillage products include reel discs, stalk choppers, seed bed conditioners and the newest product, the Incite 5100 Tillage Tool. The implement allows a farmer to do multiple till tasks at once instead of making several passes over a field with different pieces of equipment. The model ranges in size from 14 to 40 feet wide with the largest Incite costing more than $100,000.

To help create a more lean and efficient operation, implements are now manufactured as orders come in, instead of being made in bulk and on spec, only to wait for a buyer in the lot outside the plant. The move to a quick-response manufacturing mode has reduced the parts inventory, reduced overhead and prevented the outdoor lot from being jammed with finished machinery.

"We build things at a quantity of one. It can take a few days to 12 days. We're building it to order," said Todd Lassanske, McFarlane's general manager of manufacturing. "There's a lot of opportunity and a lot of room to grow with this company for everybody. We're definitely in a change mode."

Dave Buchanan joined the McFarlanes' steel division after years working as a contractor and in wind farm construction. As project development director, he's now in charge of selling steel to contractors but was amazed at the diversity of McFarlanes', a company he had dealt with in the past but about which he knew little.

"It's a good family-oriented company and there's a lot of good people," Buchanan said. "I was really shocked what happens behind these walls. The degree of product and the operations is mind-boggling."

Back at the retail, warehouse and service center, recent additions have included a rental business offering power equipment, tools, tables and tents, and sales and servicing of bicycles.

The conversion of the gigantic building after the fire from a warehouse to a multifaceted business included adding two 36-foot-wide, 20-foot-high overhead doors to accommodate large farm vehicles and removing loading docks and adding a main entrance and parking lot.

"We had to do some soul-searching and make a decision and talk to our suppliers and our employees, but we came to the conclusion that the best decision was to move forward and stay in business rather than shut down the retail aspect of the business. We knew we wanted to grow but we would have never, ever built a building this big," Dick McFarlane said.

"We put on some miles. That's why I went to hiking shoes."