[syntaxing]

Not OP but I went through some data and John Deere makes 5B NET profit for the worse years. 10B for their best (only looking back 10 years). I wouldn’t be surprised these anticompetitive (as in anti “consumer”) has netted them north of 10B.

[SideQuark]

Last year was 5b net profit on 44b revenue. Attributing more than a tiny fraction of profit to the right to repair stuff is wild dreams, given the amount of physical goods they sell.

Nothing in their SEC filings shows anything mentionable about such claims. It does break out actual profit by company sectors.

[syntaxing]

Admittedly I have never worked in the agriculture industry, but I have been a mechanical engineer for multiple industries before I became a software engineer (a good 5 years I was in a position where I quoted customers). You really cannot imagine that out of the 44B gross revenue and 5B net, that a "non tiny fraction" was not related to right the repair? Collections of receivables + Proceeds from sales of equipment on operating leases is north of half of the 44B gross. How much of that gross would have not existed should there been a third party market to repair and service exist products? I honestly can't give a number but I doubt its "tiny". Look at the car industry, about 20% of the global revenue is aftermarket. You simply cannot naively think that "right to repair" only effects the service contracts. Theres aftermarket parts and 3rd party repair shops that COULD have been a bigger market without John Deere's anticompetive practices.

[cogman10]

Yup. The two things John Deere did was make it impossible to diagnose problems with software lockouts and they did software locks for common parts. Imagine, for example, needing to pay $1000 to replace an oil filter because you needed to buy the official John Deere oil filter and have the John Deere technician drive out to install it and flash the tractor to start up with the new filter.

That's what John Deere was up to.

Also, I'd point out that tractors are, by and large, actually pretty simple machines. At their core they are an engine and a hydraulics system. Not much more. The most fancy tractors will obviously have a lot of creature comforts in the cab. GPS, auto steering, AC, etc. But the actual things that do the thing are effectively just solid metal parts that plow through the field or cut down the crop.

Tractors, because they are so simple, but also because they all operate at lower speeds than other vehicles, are almost immoral machines. My family literally has a John Deere from the 40s that starts up just fine. We also have a Massie from the the 70s that still operates just fine. And our newest Massie from the 00s is still doing farm work. The only reason we got the Massie in the 70s was because it had more horsepower than the John Deere from the 40s. And the only reason for the 00s tractor was because it had a closed cab with AC and more horsepower.

It would not shock me to learn John Deere was also integrating some planned obsolescence to speed up the turn over of their tractors.

[parineum]

> Imagine, for example, needing to pay $1000 to replace an oil filter because you needed to buy the official John Deere oil filter and have the John Deere technician drive out to install it and flash the tractor to start up with the new filter.

>That's what John Deere was up to.

Is that an actual price and the actual process?

[VorpalWay]

Even in other industries it is common that spare parts and consumables have a very high margin (while the initial purchase has a much smaller margin or in some cases is even subsidised).

The most well known example is probably printer ink/toner. (Razors is another often quoted example.) But this applies to car parts too. I needed a new small plastic clip to my Dacia. I was quoted 100 SEK (about 10 USD) for that. I 3D printed a sturdier version that will last longer for less than 5 SEK in materials (less than 0.5 USD).

From that you can estimate the approximate margins many companies have for spare parts. Of course being able to prevent cheaper third party parts will seem enticing if they want to maximise shareholder value. And this is why we need regulation.

[izacus]

It's also absolutely no secret that fattest margins and profits for automobile industry is also made with "aftermarket service" - which include upsales and inflated prices for service intervals.

There's a reason they all now need digital service books which are locked to their partnerships.

[cogman10]

Price no, process yes.

John Deere hasn't been insane enough to soft lock their oil filters. But they do soft lock about everything else they can.

https://www.npr.org/sections/alltechconsidered/2015/08/17/43...

[parineum]

That price is absurdly exaggerated and the part is also misleading (an oil filter).

> "The tech came out and it took him a couple hours to diagnose that there was one small sensor out. And that one small sensor, I think it was a $120 part."

Two hours of labor to diagnose and then however long the replacement took + the cost of the part. $120 doesn't seem overpriced for that.

The time it must take to get a limited pool of technicians to drive out (40 miles) and do that work is probably the real issue. The price seems completely reasonable.

I agree that right-to-repair should be a thing but you're grossly exaggerating the situation.

[LeifCarrotson]

Tractors are immortal (my Dad's 80-year-old Ford 9N can attest to that), John Deere is immoral.

[SideQuark]

I looked over their financials. You conjectured out of feelings and ignorance. Calling my evidence naive, when you are simply making things up, is ludicrous.

Go do some legwork, get some actual data, not make believe feel good fairy dust.

The fed suit had exact numbers, which they blacked out for public. The fed suit settled for a dollar amount. If they thought they’d get a better amount, they’d go to trial. So likely the proceeds are on order of the settlement, else they’d likely win more by trial. The feds are not idiots.

But some people are.

[sandworm101]

Repair is everything with such equipment. Be it an airliner, fighter jet, TBM, those big trucks in mines, factory robots ... any industrial machine that moves will, over its lifetime, cost more in repair and maintenance than its sticker price.

I talked to a hobby farmer once about a tractor. It wasnt cheap, but he spent more to biuld it a proper shed than he spent on the (used) machine. Leave it out in the rain/snow/mud all winter and it wont be there for you in spring. Maintenance and support is everything.

[Dylan16807]

Why would it be a "tiny fraction" of profit in particular? If they broke even, would we say they couldn't have made any money off of these practices?

Even a tiny fraction of revenue, on the other hand, could easily reach $10B. 4% of ~40B times 12 years = $19B.

[SideQuark]

Go pull their financials, stop pulling nonsense out of thin air.

[Dylan16807]

...nonsense?

Their average revenue for the last dozen years is reasonably close to 40 billion.

4% is a tiny fraction.

Those are the only numbers I used.

[SideQuark]

And then you summarized

> 4% of ~40B times 12 years = $19B.

as if this might be close to reasonable estimate of the profit off these farm repair contracts.

But you pulled that reasoning right out of nowhere. It's simply ignorant.

Multiplying 4% times revenue? Why pick revenue? Why not profit before taxes? Why not profit after taxes? Why not any of a ton of more relevant variables?

Because you have a belief in search of some numbers to make it sound smart.

Their net profit is around 10% of revenue, not at all out of line for companies in this sector. If you're going to magically claim that 40% of this profit is from farm contracts, that is massively ignorant of what they sell.

Since you seem unable to look at their financials, there's no need for me to show you how little of their overall revenue is farm equipment (which if course makes your number voodoo even more out of touch).

[Dylan16807]

> as if this might be close to reasonable estimate of the profit off these farm repair contracts.

I took the math you proposed but I used revenue instead of profit. "Last year was 5b net profit on 44b revenue. Attributing more than a tiny fraction of profit to the right to repair stuff is wild dreams"

If the general idea of that calculation is wrong, it's your fault.

And obviously not all of that extra revenue can be profit, but most of it can. It's enough to make "tiny fraction" still work out well.

> Why pick revenue? Why not profit before taxes? Why not profit after taxes? Why not any of a ton of more relevant variables?

Because forcing people to use your parts/services brings in extra business. Revenue.

I already explained why not profit. If the company broke even, using profit would declare they could not have possibly made money on the program. If they lost money overall, calculating a percent of profit would declare that this behavior must have lost them money. It makes absolutely no sense to use profit in this calculation.

> Their net profit is around 10% of revenue, not at all out of line for companies in this sector. If you're going to magically claim that 40% of this profit is from farm contracts, that is massively ignorant of what they sell.

Why couldn't it be?

Let's consider a hypothetical. Red Moose sells $30B in tractors and the cost of doing that is $31B. But they have an anti-competitive program that brings in $4B on $1B in cost. Their overall profit is $2B, but the profit from that specific program is $3B. Despite being only 12% of their company, it brings in all of their overall profit (arguably 150% of their overall profit).

It's very easy for one piece of a company to make most of the profit. It's not magic.

> Since you seem unable to look at their financials, there's no need for me to show you how little of their overall revenue is farm equipment

They break out everything by equipment market and I couldn't find anything granular enough to figure out how much is servicing. I looked the first time I posted. If you have something better feel free to quote it. But talking about how much is farm equipment seems pointless to me. We should be looking at how much the company could plausibly make by spiting right to repair on all equipment, farm and construction and everything.

> (which if course makes your number voodoo even more out of touch)

Again, all I did was take the math you suggested except I used "revenue" instead of "profit" for a good reason.

[kelnos]

The net profit figure isn't all that relevant. But I would be completely unsurprised if they made significantly more than $1M via their anti-right-to-repair practices.

[nicce]

Do they mention about how much revenue comes from selling parts and maintenance? That is what is directly impacted.

[izacus]

John Deere itself went far to prevent repairs and fought tooth and nail against it in the court - why would they spend so much effort on something that's not profitable?

The corporation you're defending is disproving your point by their own actions.

[tjohns]

While I suspect this is actually profitable for them, you can't attribute 100% of their profit to anti-repair activities.

At a minimum, you'd have to break out profit from equipment sales vs service contracts.

[Grombobulous]

This concept of percent of profits shouldn't be considered in the context of fines. For regulations to have teeth, punishments shouldn't just slap you on the wrist just because harmful practices weren't responsible for a lot of profit.

In that scenario, a lot of growth companies or just poorly performing companies could just say "sorry, we don't make any profit, so our maximum fine is $10," and obviously that wouldn't be fair at all.

Fines should really be about "what size fine will be a deterrent for this company?"

[koolba]

> Fines should really be about "what size fine will be a deterrent for this company?"

To a degree. But it also has to be commensurate to the actual market size and impact. If an Amazon releases a defective dog toy that is bought by 10 people, it’d be unreasonable to fine them $100 billion dollars just because they’re a huge company.

[true_religion]

Fines are strictly punitive. The only goal of the fine is to change behavior, not to be 'fair'.

It's true that the fines differ per the act, but that's only because the act itself determines how much people would desire to continue it despite a deterrent.

The fine for jaywalking is less than the fine for speeding because (a) society doesn't want to stop jaywalking as desperately and (b) even a small fine of $25 will cause people in cities to follow the rules and not cross the road willy-nilly but with speeding even with the fine you may want to still speed hence why almost all states also give you only a few chances to break that law in a year before they take away your license.

---

You're supposed to collect damages on top of the fine.

Which is why John Deer is paying our almost $100 million[1].

An additional $50 million plus FTC oversight for 10 years is to ensure John Deer comply, and to set a standard for further fines if they do not comply. If they continue to willfully not comply, like some people continue to jaywalk or speed, the fines will drain billions or reach a point that the company will be dismantled.

[1] https://www.wired.com/story/john-deere-is-paying-farmers-99-...).

[Grombobulous]

So with punitive damages it’s still only 2% of John Deere’s 2025 profit.

Not revenue, profit.

[timschmidt]

Depends entirely on whether or not you think Amazon actually caring about the fine and bothering to do anything to prevent it recurring is part of the goal.

If it is, the fine must be large enough to matter against the backdrop of corporate P&L. Courts have an entire category for this type of fine: punitive damages.

[kelnos]

Maybe $100B is too much for that particular infraction, but the idea of punitive damages has nothing to do with "fairness" or charging the real cost of the bad thing they did.

It's a deterrent. It says: "you did a really bad thing and I'm going to slap a huge fine on you so you think twice about doing it again". And "huge" has to scale with the entity paying the fine. It has to be an actual wound, not a papercut.

[Grombobulous]

In this example Amazon could get around culpability for significant fines by making slight variations on the same product.

“We only sold 10 dog toy model A00001, any owners of dog toy model A00002 were not impacted”

[hekkle]

Well 500 million alone would come from "software". Which is "required" to be up to date for diagnostics, to fix anything else. https://www.thedailyupside.com/industries/tractor-giant-john...

[syntaxing]

Posted in another comment but you cannot just think about John Deere's balance sheet. A whole other industry would have existed without John Deere's intervention but they were able to capture a lot of the GROSS revenue due to it. You can look at other non high litigation capture industries like automotive.