undefined | Better HN

0 pointssnarf213y ago0 comments

Sure you can. They don't care about farmers because farmers are a smaller percentage of their business each year. When Private Equity buys all the mega-farms, they won't care about having to rent tractors from JD. Actually, they would prefer it because you can CapEx a maintenance contract instead of putting it on OpEx. It does mean that there will be an ever growing opportunity for a smaller tractor company that actually does care about farmers but JD knows where their bread is buttered and they don't care about the little guy.

0 comments

thrdbndndn3y ago

Why are we making a distinction between (indie) farmers and mega-farms?

They are all farmers, do the farmers' thing. And the latter is more efficient. It makes sense (and IMO is better) for a tractor company to cater for the latter.

adolph3y ago

That seems a kinda conspiratorial stretch for a phenomena that has a simpler possible explanation: they see maintenance as a growing revenue source.

salawat3y ago

It's not conspiratorial at all. After a certain size, and upon getting a CFO that'll actually pay attention to things like that, this is a 100% incentivized way of doing things.

It's not conspiratorial in the mustache twirling sense, but it is 100% an unambiguously desired outcome of how our tax laws and accounting principles are currently structured.

A system is perfectly tuned to generate the outcomes it does. If you don't like those outcomes, you have to change the system.

ask_b1233y ago

What are the benefits of a maintenance contract being CapEx rather than OpEx?

j / k navigate · click thread line to collapse