Dixon Industries, Inc.

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Dixon Industries, Inc.

Airport Industrial Park
P.O. Box 1569
Coffeyville, Kansas 67337
U.S.A.
(316) 251-2000
(800) 264-6075
Fax: (316) 251-4117
Web site: http://www.dixon-ztr.com

Wholly Owned Subsidiary of Blount International, Inc.
Incorporated: 1973
Employees: 202
Sales: $45 million (1997 est.)
SICs: 3524 Lawn & Garden Equipment

A veteran in the outdoor power equipment industry, Dixon Industries, Inc. manufactures a full line of zero turning radius lawnmowers. Dixon’s line of ZTR riding mowers captured consumer interest in the 1970s as the first zero turning radius mowers affordable to most homeowners. In 1990 Blount International, Inc. acquired the company. All of Dixon’s operations were housed under one roof in Coffeyville, Kansas.

Origins

The Dixon family first established their business presence in Coffeyville, Kansas, in 1948 when W.O. Dixon expanded Dixon Manufacturing Company by establishing a production plant in the small, rural community. At the time of the expansion, W.O. Dixon operated a small machine shop in Wichita, Kansas, that did subcontract work primarily for Boeing, Beech, and Cessna. In 1951 Dixon sold his company to Continental Can Company and bought a cattle ranch near Grove, Oklahoma. Continental Can changed the name of the company to Olin-Dixon Inc. and for the next decade operated the enterprise, retaining Dixon’s original business focus. In 1962 Continental Can decided to shutter its operations and approached Dixon, who had spent the previous 11 years tending his cattle and operating a pipeline equipment and supply company in Tulsa, Oklahoma, about buying his company back. Dixon agreed to the proposal and several years later was joined by his son, K.O. Dixon.

After earning a degree in production management from the University of Oklahoma in 1960, K.O. Dixon had helped with the Dixon family ranch operations, but in 1967 he joined his father at Olin-Dixon as a plant manager. Father and son worked together until the aerospace industry dipped into one of its recessive cycles during the early 1970s, which prompted W.O. Dixon to seriously contemplate retirement. In 1972 the elder Dixon decided to complete the work for which he had contracted and then liquidate the company and retire. K.O. Dixon, after more than a decade of working in family-owned businesses, found himself without a job and without a clear idea of what he wanted to do, except for a vague desire to own his own business. His search for a job led to the formation of Dixon Industries and the affiliation of the Dixon family name to a novel breed of lawnmowers.

While sniffing about for job opportunities, K.O. Dixon heard about a company in Leavenworth, Kansas, that was willing to sell the patent for, and the assets to build, a zero turning radius riding lawnmower. During the early 1970s the concept of a zero turning radius lawnmower was not revolutionary. Several models were available commercially, made by manufacturers who used hydraulic transmissions to deliver power to the rear wheels, but all of the models available were very expensive and beyond the financial means of most homeowners. The concept Dixon heard about, however, could be made much more inexpensively than the zero turning radius mowers available at the time. The patents for the unique mechanical transmission for sale in Leavenworth allowed the steering to be controlled by the power wheels on the mower instead of the steering wheel. By delivering the power independently to each rear wheel, the operator could turn the mower around within its own dimension. Dixon was far from an expert in outdoor power equipment, but he was intrigued. “I didn’t know anything about the lawn mower business,” he recalled, “or even consumer products, but this unique concept seemed to have merits so I went to the auction.”

The company in Leavenworth, Kramer Machine and Engineering Company, offered the patent and manufacturing assets at an auction in July 1973. Dixon made the trip, but to his chagrin he realized he lacked the finances even to make the opening bid. He returned home and forgot about the entrepreneurial opportunity until a Leavenworth bank telephoned and asked if he was still interested in the lawnmower idea. Dixon returned to Leavenworth and came back with his hands full, having struck a deal for the patent rights, the inventory, and the tooling to produce a new type of zero turn radius mower. “I moved it all to Coffeyville and started from scratch,” Dixon explained. Dixon Industries, Coffeyville’s newest Dixon enterprise, went into production in 1974.

Dixon started with 25 employees who set to work in 1974 to introduce the first Dixon ZTR (zero turning radius) line of lawnmowers. During the first year production output reached 760 mowers, all powered by eight-horsepower engines and fitted with 42-inch blades. There was more to starting the company than simply gearing up production to feed demand, however. Dixon explained: “We had a new company, a new product, and a new concept of mowing grass. That concept was we had a riding mower that had no steering wheel and could turn on a dime. It was a new idea that was unfamiliar to people. We had to do a lot of hands-on demonstration. It was a pioneering effort.” To educate consumers and stimulate demand, the company started with the slogan, “Cut your mowing in half,” and relied heavily on the efforts of a small network of distributors and dealers to inform Midwest consumers about the benefits of a Dixon zero turning radius mower. Dixon’s relationship with distributors and dealers was an important one, crucial to the company’s success during its inaugural year of business, and no less so 25 years later. The distributors and dealers were the individuals who could use Dixon’s marketing tools to the company’s best advantage, serving as a network of salespeople able to communicate the novelty and efficacy of Dixon’s unique riding mowers directly to the consumers.

Developing the optimum distribution and marketing system did not occur overnight. The process took time; it was at least three years before Dixon could consider itself an established company with a sophisticated distribution system. By the company’s second year of business, after it had moved into larger quarters, 820 mowers rolled off the production line, but the distribution of these mowers was fundamentally flawed. By this point, Dixon had nine distributors who covered a ten-state territory and placed the new line of ZTR mowers with local dealers, but the company used distributors who sold multiple lines of outdoor power equipment instead of selling Dixon products exclusively. As one of numerous product lines, Dixon ZTRs did not receive the undivided attention of either the distributor or the dealer, which meant consumers were not being persuaded as strongly as they could be to purchase ZTR mowers. Primarily, the reliance on such a system was a function of Dixon’s relative anonymity in its industry during the company’s early years. As awareness of the brand name and product increased, the company could then expect to cultivate distributors whose business could survive solely on the Dixon line.

The company’s efforts at major industry trade shows helped accelerate the awareness of the ZTR line, providing wellattended venues where Dixon could showcase its marketing talents. In 1976, one example of the company’s efforts to court dealers was its “Mowdeo” demonstrations, which dealers could use as a marketing tool to attract customers. The company also launched an aggressive direct mail program in an effort to broaden ZTR awareness, but perhaps nothing was more effective at extending the recognition of ZTR to a broad range of consumers than the introduction of a 30-inch model in 1977. With both a 42-inch and 30-inch model to market, Dixon was able to widen its geographic area of operation as its distributor network fanned out and led the way. Remarkably, the company extended distribution into Europe in 1977, three short years after the first ZTR was produced.

By the end of 1977 K.O. Dixon and his management team could rightly claim that they had established Dixon as a lasting player in the outdoor power equipment industry, having shouldered past the numerous difficulties that frequently hamper a start-up’s maturation into an established company. Evidence of the company’s success could be found in the steady rise in demand for its mowers, the growth of its distribution network, and in the interest other industry participants had in the burgeoning operations at Coffeyville. Dixon received several offers to produce private brand mowers for mass merchandisers, but despite the lure of the tremendous growth such an agreement could yield, K.O. Dixon refused to steer his company in a new direction. It was more important, he claimed, not to damage the company’s relationship with its dealers and distributors, whose allegiance to Dixon was intrinsic to the company’s future success. It was, he noted years later, “a key decision, one we’ve never regretted and never changed.”

Company Perspectives:

From the time Dixon ZTR mowers were introduced 25 years ago, they have changed the industry. Zero Turning Radius mowers maneuver precisely around trees, bushes and obstacles. They have become known for cutting corners squarely, tracking contours cleanly and easy handling.

Both Dixon’s patented “Z” Drive Transaxle and our Hydrostatic Drive deliver power to the drive wheels independently. A Dixon can turn in its own dimensions. So instead of making wide turns over cut sections and backing up, your time is spent productively, mowing uncut sections on every pass. You have control of speed and direction for efficiency that greatly reduces or even eliminates hand-trimming.

Over the years we have made many improvements and innovations in the ZTR line. For a residential mower, a larger estate mower or a commercial mower, your needs have been anticipated. And one thing remains constant: If you want a better mower, turn to Dixon!

By the end of the 1978 selling season, unit sales were up to 3,200, a more than fourfold increase in a four-year span. The company’s production payroll had tripled and its number of distributors had increased to 19, extending Dixon’s operating territory to embrace a 24-state area. Dixon ZTRs were, by this point, the fastest-growing line of riding mowers in the United States, giving the company the confidence to project a growth rate that exceeded the growth of its industry as it entered the 1980s. Aside from steady growth of the company during the

1980s, the decade’s most significant event occurred in 1986, when Dixon traded its independence for the greater resources and capital of a parent company.

Ownership Changes in 1986 and 1990

The 1986 acquisition of Dixon by Wichita-based Coleman Company testified to the strength of K.O. Dixon’s company, but the transaction was most notable for its lack of effect on the operations in Coffeyville. Coleman sold a bevy of outdoor-related products, everything from campstoves to recreational powerboats to spas. K.O. Dixon’s concern about the acquisition stemmed from the concern felt by his dealers and distributors, who looked at the way Coleman conducted its business and arrived at a logical conclusion. Coleman sold numerous products, including lanterns, campstoves, and coolers, through mass merchandisers, a business approach that would sound the death knell for Dixon’s distributors and dealers if Coleman decided to operate its new acquisition in a similar fashion. But Coleman did operate several divisions that sold through dealer organizations, such as camping trailers, Skeeter and Mastercraft boats, and its line of spas, which assuaged some of the fears felt by Dixon’s distributors and dealers, many of whom relied solely on Dixon products to survive. In the end, all concerns were swept aside, as the potentially divisive acquisition turned out to be a smooth, almost imperceptible, transition. K.O. Dixon remained in charge of the company, and business proceeded as it had prior to the change in ownership, without any changes made to the company’s operation or its marketing channels.

Although brief, Dixon’s relationship with Coleman proved to be a beneficial one. During the first three years of Coleman ownership, Dixon nearly doubled in size, but in 1989 Cole-man’s tenure of ownership came to a sudden end. The company was acquired by Me Andrews and Forbes Co. in a leveraged buyout, and, as often happens after a takeover, several Coleman divisions were put up for sale. One of those divisions was Dixon, which now found itself thrust into an anxiety-ridden state of limbo. Unlike the deal that led to Coleman’s acquisition of Dixon, K.O. Dixon had no control over whom the company’s new owners might be, and without such control he could do little to assure Dixon distributors and dealers that they had a guaranteed future with the company. The concerns of 1986 arose again, but this time the situation was much more serious. For a year, the most difficult year in Dixon’s history, the company remained on the auction block, scrutinized by competitors and investors, while K.O. Dixon and all those tied to the operations in Coffeyville awaited their fate. In early 1990 news of an interested buyer was announced and, to the relief of K.O. Dixon and all Dixon distributors and dealers, the news was good.

In April 1990 Dixon was acquired by Blount International, Inc., a Montgomery, Alabama-based construction and manufacturing conglomerate. Fortunately for Dixon, history repeated itself during the company’s second ownership change in four years. Operation of the company remained the same as it had during Coleman’s ownership, K.O. Dixon remained in charge, and the company’s marketing channels remained intact, with the same network of Dixon distributors and dealers selling the company’s products. Dixon was organized into Blount’s Outdoor Products Group, where it operated alongside three other companies (Oregon Cutting Systems, ICS, and Frederick Manufacturing Corporation).

Dixon in the 1990s

During the first half of the 1990s Blount exited the construction industry—its original business—and focused all of its efforts on its manufacturing companies, which were represented by three business segments: Outdoor Products Group, Industrial & Power Equipment Group, and Outdoor Sports Group. Operating within this multilayered structure, Dixon recorded one of the greatest growth surges in its history, doubling in size during the first half of the decade to eclipse $40 million in sales by 1995. Dixon’s distribution methods had been well honed by this point in its history, having evolved away from reliance on distributors who carried multiple lines of outdoor power equipment and toward the preferred method of using direct dealers. Distributors who sold multiple lines of products were still used in sparsely populated areas where they could not survive on Dixon products alone, but 80 percent of Dixon mowers were distributed to direct dealers, who numbered more than 1,000 during the late 1990s. In addition, the company used three distributors who dealt with more than 200 dealers in the United States and Canada. Export distributors handled Dixon products in Europe, Australia, South Africa, New Zealand, and Israel.

On the heels of its rapid growth, Dixon expanded its operations by 39,000 square feet in 1995, giving the company a total of 161,000 square feet of space during the late 1990s. In March 1996 K.O. Dixon retired, but his departure and replacement occurred without disruption, eased by the promotion of a longtime employee named John P. Mowder, who joined Dixon in 1976. By the late 1990s Dixon was selling 15,500 mowers a year, ranging between 30-inch cut models and 60-inch cut models. The Dixon ZTR line was priced between $2,425 and $8,645 in 1998. Although the company’s mainstay business was in residential mowers, it was achieving rapid progress during the latter half of the 1990s with mowers intended for commercial use. Nearly half of the company’s product line in 1998 consisted of commercial mowers. Looking ahead, the company expected the 200,000th Dixon mower to roll off the production line in March 1999, and sales were projected to approach $80 million by 2002.