AGCO To Close Its Coldwater, Ohio Facility Lockney, Texas Plant to Cease Production by Second Quarter

Duluth, Ga. (PROTEXT) - AGCO Corporation (NYSE: AG), a majorworldwide designer, manufacturer and distributor of agriculturalequipment, today announced that it would close its manufacturingfacilities in Coldwater, Ohio and Lockney, Texas. This decisioncomes at a time when reduced demand for agricultural equipmentcontinues to negatively impact the industry with lower productionlevels, reduced price realization and unfavorable currencyexchange. In order to remain competitive, AGCO has determinedthat it is necessary to rationalize production facilities forgreater efficiency and lower product cost. The Coldwater factory, which has been closed since October 1,1999, will not resume production and will be closed permanently.Details of the plan to close the operation were outlined today toapproximately 100 remaining employees during a group meeting atthe Coldwater facility. The Company anticipates that the facilitywill be completely vacated by April 1, 2000. The Company will incur nonrecurring expenses of $25 to $30million related to the closure of the Coldwater and Lockneyfacilities. These nonrecurring expenses are primarily foremployee termination payments, write down of certain assets andcosts related to closing and exiting the facilities. Of thisamount, approximately $20 to $25 million will be recorded in thefourth quarter of 1999 with the remainder of the nonrecurringexpenses being recorded as they are incurred during 2000. Inaddition, the Company will also incur a one-time charge ofapproximately $5 million in the fourth quarter of 1999 associatedwith the write down of certain inventory values for discontinuedproducts directly related to the facility closures. The Companyanticipates annual cost savings of approximately $10 to $15million as a result of the facility closures and expects torealize all of these savings in 2000. Products currently produced at the Coldwater facility will berelocated to AGCO facilities in North America and Europe.Specifically, planters, hay tools and spreaders will be relocatedto the HFI (Hay and Forage Industries) operation in Hesston,Kansas. Also, in an effort to further reduce costs, AGCO's MasseyFerguson(R), AGCO(R)Allis and White brands of high horsepowertractors will be integrated with common platform tractorproduction currently in place at its Beauvais, France facility.In addition, AGCO's Farmhand(R) brand of loaders will be producedfor AGCO by the Soo Tractor Company located in Sioux City, Iowa.Additional product relocations from Coldwater will be announcedin the first quarter. The Company also announced that it would cease production atits Lockney, Texas plant. The facility has been closedperiodically during 1999. Current production of AGCO's Tye(R)brand of seed drills and cultivation products will be relocatedto the HFI facility in Hesston, Kansas. This process is expectedto be finalized by the second quarter. "The current global decline in industry demand foragricultural equipment, continued consolidation of manufacturingentities and increasing production costs, make it necessary forAGCO to seek solutions that will allow the Company to improve itsviability during the industry downturn," stated Robert J.Ratliff, Executive Chairman of AGCO Corporation. He furtherstated, "Current inventory levels make it possible to consolidateproduction during the first quarter of 2000 without the loss ofsales, and we expect that production of the effected products attheir new source locations will be ready in time for seasonaldemands." "This decision was not taken lightly. Regardless of thebusiness conditions that necessitated this unfortunate decision,we deeply regret the impact this action will have on ourassociates and their families. The employees at Coldwater andLockney have always been known for delivering high-quality work.The plants and its employees have made a significant contributionto AGCO's success," Mr. Ratliff continued. AGCO expects that the closing of the Coldwater and Lockneyfactories and the relocation of various manufacturingresponsibilities will maintain production capacity and reduceproduction costs. In addition, the efficiency generated by theincreased utilization of AGCO's other facilities will aid theCompany in avoiding higher product costs during the prolongedindustry downturn and provide measures to achieve lower productcosts, which will position the Company well when the industryrecovers. "The resulting benefits of this action will reward theCompany with a more competitive group of products and thereassurance of AGCO's long-term commitment to its brands. Theseoperating cost savings, together with the Company's horizontalproduction strategy will enable AGCO to remain profitable inadverse market conditions," concluded Mr. Ratliff. The Company currently owns the Coldwater facility. Once theclosing is complete, AGCO intends to actively market theavailable space of 1,490,000 square feet in an effort to ensureits productive use in the community. The Coldwater operation wasacquired in December 1993 as part of the White-New Ideaacquisition to produce hay tools and implements. Prior toshutdown the Company employed approximately 450 employees. The Lockney facility, currently leased by AGCO, was obtainedin March 1995 as part of the AgEquipment acquisition, whichincluded the Farmhand(R), Glencoe(R) and Tye(R) brands. TheLockney facility staffed approximately 55 employees prior toshutdown. AGCO Corporation, headquartered in Duluth, Georgia, is aglobal designer, manufacturer and distributor of agriculturalequipment and related replacement parts. AGCO products aredistributed in 140 countries. AGCO offers a full product lineincluding tractors, combines, hay tools, sprayers, forageequipment and implements through more than 8,500 independentdealers and distributors around the world. AGCO's products aredistributed under the brand names AGCO(R)Allis, MasseyFerguson(R), Hesston(R), White, GLEANER(R), New Idea(R),AGCOSTAR(R), Black Machine, Landini, Tye(R), Farmhand(R),Glencoe(R), Deutz (South America), IDEAL, Fendt(TM), Spra-Coupe(R) and Willmar(R). AGCO provides retail financing worldwidethrough its Agricredit joint venture. In 1998 AGCO had sales of$2.9 billion. ots Original Text Service: AGCO CorporationInternet: http://www.newsaktuell.de Contact: Lorna Thompson,Manager, Corporate Communications (USA) 770-813-6111, or MicheleHoward, Director, Corporate Finance (USA) 770-813-6082, of AGCOCorporation Company News On-Call:http://www.prnewswire.com/comp/017850.html or fax, (USA) 800-758-5804, ext. 017850 Web site: http://www.agcocorp.com

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