Farmers Union Oil Places a Premium on Service
In the small town of Garrison, N.D., Farmers Union Oil, a tire dealership and farm cooperative based about 75 miles north of Bismarck, has been helping both customers and the community in which it operates for nearly 100 years - all the while surviving The Great Depression, two world wars, an oil crisis, several recessions, a national housing collapse and market plunge, and most recently, a global pandemic.
“The co-op was generated by a bunch of people who desired a fair price for their products,” says Paul Schlichting, the general manager of Farmers Union Oil.
“They invested into it as a way to get merchandise and other goods at a fair price, so they wouldn’t have to go from North Dakota to Minnesota to market their grain.”
As the crow flies, the western border of Minnesota is about 265 miles due east from Garrison. That was quite a journey 90 years ago, but the view really hasn’t changed too much.
All around Farmers Union Oil, the land is mostly flat as far as the eye can see and the long midwestern days offer ample time for Schlichting to take care of his community - and their tire and service needs - in all directions.
“Here, we do it with gas, tire and oil,” he says. “In the late ‘80’s, we went from strictly a shop selling gas, batteries, etc., to moving down the highway and establishing the convenience store, bait and tackle shop, gas, retail and more. And we’re still here. Many other co-ops in the area have closed their shops down over the years.”
Ag tire sales and service - including both in-shop and in-the-field repairs - generate a significant percentage of the operation’s overall revenue.
Farmers Union Oil also offers “all the normal (services) - the oil changes, shocks and brakes you’d expect from a tire store."
The busy co-op sells “the whole gamut” of ag tires - fronts, rears and implement tires - and sends ag tire service trucks to farmers who need help while in the field.
“On average, we do five calls a day,” says Schlichting. “Some days, we can do as many as six or seven.”
Saturday and Sunday service is available, too. “We’ll charge a weekend rate,” he says, adding that on top of paying agreed-upon rates, some farmers will provide service technicians with cash tips.
Schlichting says that some of the problems his technicians face while working in the field stem from the sheer size and volume of contemporary farm equipment and implements.
“Agricultural equipment has gotten so big that it’s getting harder to work on because everything is so massive. The tires are twice as tall as we are and four times as wide.
“The combine tires I used to fix are now on the back of the combine and the ones on the front are three times as large,” he adds. “How do we better prepare our people to do a good job and a safe job? Safety and efficiency are always a concern.”
For Schlichting, trust in his team’s ability to do the job, do it right and do it well is paramount.
“Everything is going to get bigger because that’s the way the technology is going. It concerns me a little bit. How do you manhandle some of these implements and how do you service them? There’s going to be more investment for our shop to continue to keep up and do the work.”
Schlichting believes that the experience and expertise of Farmers Union Oil’s service technicians help give the co-op an advantage over other operations.
“I have a guy who has been with me since 1994. I have another guy who has been with me since 2008. And I have a guy who has been with me since 2009.
“We just have to continue to grow with the industry,” he says. “We keep getting better at it and we keep going.”
On the truck tire side of the business, Schlichting says Farmers Union Oil sells a variety of brands, with Cooper Tire & Rubber Co.'s Roadmaster line being its number one seller.
"We find they hold up really well and they give the guys traction when they need it."
Schlichting cites the support that Farmers Union Oil receives from K&M Tire Inc., its tire supplier, as a big factor in the co-op’s success.
“We buy 99% of our tires from K&M,” he says, “and we have tires delivered here every day from a warehouse in Bismarck. K&M has done a fantastic job. Long before the pandemic and certainly through it, we haven’t had inventory problems - not one.”
The same sort of longevity that employees enjoy at Farmers Union Oil can be seen at K&M, as well. Schlichting has been working with Tim Schroeder, his K&M representative, for nearly 25 years.
“Tim keeps me up to date on all the K&M offerings and news, and he lets me know what’s happening, from program and training opportunities to tire price increases. Our relationship exemplifies their service and our mutual commitment to the customer and they’ve done a fantastic job handling it all."
Jimmy Hutto Jr., commercial tire sales manager at K&M, says that striving for continuous improvement is the answer for everything.
“We’ll continue to do that and I’m sure Paul will, too,” he says.
Working with K&M, Schlichting is pleased to have a web link that offers maximum transparency on the cost of doing business, no matter who does the selling.
“You know what the price is going to be no matter who you speak to and for long-term customers, that works well,” he says.
K&M has been such a solid partner for Farmers Union Oil that Schlichting is 100% committed to the partnership.
As a K&M council member, his voice is one of many. But it is heard and respected.
“We talk about supply. We talk about inventory. We talk about what could be happening in our area.”
Some co-ops may not be able to offer the same sort of incentives and benefits a larger corporation may be able to. Simply keeping the lights on at night may be enough for some owners. Not for Schlichting.
“First, our incentive programs through tire manufacturers have phenomenal programs for training,” he says.
“And as a co-op, we pay our employees a fair price for working here and give them great health insurance. Most of my staff are long-term employees and once they get here they never leave. The work atmosphere here is very comfortable.”
Like many shops, those who roll up their sleeves and walk through the doors of Farmers Union Oil every morning are more than just names on a payroll spreadsheet. They’re essential to what makes the co-op successful - and they’ve valued as such.
“I always consider my employees as family,” Schlichting says. “We spend more time with each other than with our own families, after all. We see them five-and-a-half days out of the week.
“We had a trainer come in who said he’d never heard that before. I kept referring to ‘the family, the family,’ and he said he’s never seen as many people - even various boards of directors - refer to their business as a family.
“‘Whatever you’re doing,’ he said, ‘you’re doing it right.’”
But family takes time and time is exactly what Schlichting has committed to during his tenure at Farmers Union Oil.
In 1984, Schlichting was a young man just looking for a job. He had been laid off from a construction gig, winter was fast approaching and he needed something to see him through the frigid months of the year. He was also a newlywed, which added to the pressure to find something fast.
He started with Farmers Union Oil as a tire salesman at 20 years old. “The goal was to simply work through the winter and find another job.”
Winter came and went, and to his surprise, he enjoyed the customers and the work so much that he never really thought about leaving once the chill left the air. In 1996, he became general manager of Farmers Union Oil.
“How I treated customers at the beginning of my career is how I expect my employees to treat them today."
A trusted partner
Schlichting has formed many lasting friendships and partnerships over the course of his career.
K&M’s Hutto - who calls Schlichting “Tall Paul” - has been in the tire business for a long time and has been with K&M in his current position for six years.
On the commercial side, he says many of his customers are some of the best professionals he’s ever met. “They really know what they’re doing,” he says, “and they expect you to know, as well."
Hutto first met Schlichting in 2014 at one of K&M’s dealer council meetings, where two dozen shop owners got together to discuss the industry, market trends and more.
“They give us input and that’s where I met Paul,” says Hutto. “Over the years, we’ve had some great one-on-ones. I figured out right away that he’s a straight shooter. If he wants us to fix something, he’ll tell us. If he likes what we’re doing, he’ll tell us that, too. If I need something, he’s the kind of guy who can point it out. I’m always going to learn something from Paul. I think everyone does.”
One thing that made Farmers Union Oil stand out to K&M is the sheer ambition Schlichting brought to the role of general manager.
Hutto says that Schlichting started talking about making some changes at his business a few years ago, including the addition of a car wash, a coffee shop and a few other on-site amenities.
“And he did it all,” Hutto says. “He remodeled the shop and the timing was good.”
In addition to delivering exceptional service, another thing that makes Farmers Union Oil a fixture in Garrison is its aforementioned commitment to the people and places around it.
“Farmers Union Oil is about fitting into the community,” Hutto says, “and that’s one of [Schlichting’s] primary goals — to be a big part of that community. His expansions were meant to make the place a one-stop shop. They do tires and they have a convenience store, but more than that, they take care of people, and to me, the secret of their success is Paul.”
A lot yet to do
“Until we have everyone convinced they need to buy our tires and service from here, I have a lot of work to do yet,” says Schlichting. “I know that’s impossible, but I’ve thought that way for the last 35 years.
“As our employees continue to grow - as we continue to grow - I think people see the benefit of buying here.
"My assistant manager started in March 1985 and he just retired April 1 at 68 years old. He could take a rancher who already had all the manure he needed and sell him even more. If he told them they needed six tires instead of four, he’d sell six tires. I haven’t hired anyone to replace him yet because I haven’t found anyone who could do that as well.
That’s what the long-term experience at Farmers Union Oil under Schlichting is like.
He inspires confidence and devotion in his employees and the same in his clients and community.
“When I first started working here, it was a $1 million business,” he says. “Now it’s an $11 million-plus business. We grew from four employees to 40.”
For Schlichting, that's still not enough and it probably never will be.
"He has a lot of people depending on him," say Hutto.