OrangeTractorTalks

Actor Bill Lippincott does his impression of Kubota's lead legal counsel laughing at a funny joke.

We continue our series that explains why there are so many orange tractors labeled as ZEN-NOH to be found in the United States and places outside of Japan. If you have not read Part 1 or Part 2 that reading is recommended to bring a reader up to speed.

We last left off where Wallace International Trading had established a supplier network for the importation of used compact Kubotas from Japan. Wallace brought in container loads of compact tractors and disbursed them among his distribution network. The idea caught on and demand was up – these used units were low-hour, high quality and in some cases less than half the price of new Kubota equipment!

The sudden arrival of competitive units from Japan attracted the attention of local brick and motor Kubota dealerships who found themselves in a tough spot to compete. In 1996 they banded together and pushed Kubota corporate to act… and act they did with three legal mechanisms:

1. a trademark infringement case
2. a general exclusion order by the United States International Trade Commission
3. a cease and desist order

Trademark Infringement
This case was known as Kubota Tractor Corp V. Wallace International Trading and was a landmark legal case. Kubota claimed that as owners of the trademarks, namely the KUBOTA block letter stylized design font, the stylized letter K, and their classic Gear and Pipe logo had their intellectual property rights infringed upon.

Some of Kubota's trademarks. (top) The classic gear and pipe logo used for many years (middle) the stylized K (bottom) their new logo.

Kubota asserted that they had not consented to the use of the trademark blazoned across the hoods of all those used imported tractors, and furthermore, these imported tractors were materially different that the models sold by their authorized dealers in the US.

General Exclusion Order
Kubota and Wallace argued back and forth on the merits of the trademarks, but by February 1997 Kubota handily won the infringement case. On the heels of that victory they asked for and were granted a General Exclusion Order by the United States International Trade Commission (UCITC). We have saved a copy of the full general exclusion order labeled “Certain Agricultural Tractors Under 50 Power Take-Off Horsepower” for your reading pleasure here.

There is a lot of legalese in the commission’s order but the portion that would eventually lead to the blockade of further importation of the kind Wallace International was performing would be in this excerpt:

The commission had excluded any Kubota-manufactured tractors, under 50 PTO horsepower, from ever entering the United States without Kubota’s express permission or under license agreement. This big hammer legal move would not only prevent Wallace International Trading from importing any used Kubota tractors with their trademark name on it, but any future entity from ever importing a Kubota trademark branded tractor.

The United States Customs and Border Services were notified and advised that if a shipping manifest contained the words USED KUBOTA TRACTORS anywhere on the documents the shipment was blacklisted and quarantined. Shipments held in this manner by Border Services would either be turned around at the port or seized and destroyed.

Cease and Desist Order
Kubota’s legal team was not through with Mike Wallace. They asked for and received a Cease and Desist Order against Wallace and his loose knit band of dealers preventing them from selling any unsold Kubota trademark-branded tractors still in their inventories. The distributors in Wallace’s network were not allowed to sell the equipment they had imported and had sitting on their lots! Under the terms of the cease and desist order these tractors had to be either destroyed, exported, dismantled for parts or sold as scrap metal.

It was a three-pack of legal resolve that included a trademark infringement case and subsequent general exclusion and cease and desist orders. Kubota’s legal team had effectively put the brakes on Wallace International Trading and their days of importing used Kubota tractors. Or so they thought.

A Loophole is Found
Some will say nothing ruins a friendship faster than dragging everyone into a court room! 10 days in legal hell put the strain on the once profitable and successful Wallace/Gamut business relationship, splitting them up at least for a while. You will remember Gamut Trading as one of the original distributors in the distribution network Wallace organized.

Returning to Apple Valley California, the then directors of Gamut had to comply with a section of the cease and desist order by listing and indicating any unsold Kubota tractors still in their yard. It can be speculated that at this time they took renewed interest in a few orange tractors bearing the ZEN-NOH name on the sides of the hoods instead of the usual Kubota trademark name.

They had seen that ZEN-NOH name plenty of times before as they had taken delivery of many ZEN-NOH labeled Yanmar and Kubota tractors in the past. Noticing this detail would take on a life of its own.

The ZEN-NOH name was not part of the trademark infringement suit Kubota had brought and won against them. ZEN-NOH trademark name was not mentioned in either the general expulsion or cease and desist orders! Gamut Trading had stumbled upon a loop hole in Kubota’s trademark infringement suit – they could not distribute Kubota equipment but, ZEN-NOH tractors were fair game! If they could continue to get their hands on ZEN-NOH equipment maybe it would be business as usual…

Up Next, Back in Business!
Up next we look at how Gamut Trading, one of the original distributors of imported Kubota equipment, discovered and used a legal loophole to revive its importation business with… interesting results. Click here to read part 4.

Service Department Vic

Related Articles
ZEN-NOH and Kubota Part 1: A Partnership
ZEN-NOH and Kubota Part 2: Importation
ZEN-NOH and Kubota Part 4: Loopholes
ZEN-NOH and Kubota Part 5: Fallout

A chalky and coarse steering wheel - commonly found on older B and L series Kubotas.

If you own an older L or B Series Kubota tractor chances are pretty good that the steering wheel on it looks like it has seen better days. It is probably chalky, scratchy, white and coarse. Seems like most Kubota steering wheels end up like this after a couple of years in the sun.

Why the Steering Wheel Degrades
The steering wheel on your Kubota tractor is made from a vinyl chloride polymer resin that degrades as it is exposed to the elements and ultraviolet light from the sun. This gradual chemical breakdown in the material of your steering wheel shows up as a chalky white residue, almost like the wheel is flaking apart.

Some creative owners, dissatisfied with the appearance of their Kubota’s steering wheel have:

• wrapped the wheel in electrical tape
• installed an aftermarket steering wheel cover
• gone to the expense of replacing the wheel with a new one – average cost for a new wheel is around $150+

Quick Restoration Tip
Before doing any three of the above, try this tip: using a propane torch, on a relatively low setting, work the flame over the wheel inch by inch. You will be able to see the old resin melting and the wheel returning to its former black state. Keep the flame moving slowly, watching the resin turn black and move on before you burn it. If you do burn it a little, wait a few minutes and go back over the area, remelting it.

Set your torch to a low setting and work the flame over the wheel to melt the resin.

Take your time and keep going over all black parts of the wheel and center cap. The process takes about 20 minutes but afterward you have a wheel that looks almost new! Worth a try before you experiment with electrical tape or order a new wheel.

Service Department Vic

The procedure for loading gray market Kubota, Iseki and Yanmar tractors into shipping containers. Thousands of containers like these made their way from Japan to Canada, the United States, Australia, Europe and beyond, flooding local domestic markets with low-cost alternatives to the new tractors at dealerships.

In ZEN-NOH and Kubota Part 1 we learned that ZEN-NOH (or Zennoh as it is sometimes written), is not a tractor brand. It is the name of the largest agricultural cooperative in the world and in the past, they have partnered with Kubota to have equipment built for them. In this article we begin to explore how these tractors made their way across the ocean and what consequences it had for those involved and, for Kubota.

2 Reasons for ZEN-NOH Labeling
You may be asking yourself that if ZEN-NOH is not a tractor brand, make or model, then why does it say that on the sides of the hood of your tractor? You may even notice a plastic name plate firmly attached to the grille area that says ZEN-NOH. How is this possible?

A Kubota L1801 with ZEN-NOH hood decals and plastic grille insert.

Your tractor says ZEN-NOH on the sides of the hood for one of two reasons:

1. Built for ZEN-NOH by Kubota
   Kubota built hundreds of thousands of every conceivable model of their tractor line-up for immediate local delivery to ZEN-NOH. Some of, but not all, the tractors that ZEN-NOH took delivery of were affixed with their name. Kubota installed hood decals and ZEN-NOH branding right on their own assembly line during final stage roll out.

   It is not known whether Kubota relabeled their own product under the terms of a contract with ZEN-NOH, or if the cooperative itself was looking to garner some goodwill and advertising of their own once these re-branded tractors were deployed.

   One thing is certain, ZEN-NOH was, and still is, buying tractors in very high volume from Kubota and as such, gets a nice volume purchase discount. The rock bottom pricing allows ZEN-NOH to lease or sell the tractor to the farmer or producer at a very affordable price. Everyone wins all the way around.

   These ZEN-NOH branded Kubotas are original ZEN-NOH which differ from their counterparts as you will read below.

2. Exporter Relabeled
   The second reason why you may have ZEN-NOH branding on your Kubota is that your equipment was intentionally relabeled at the time of export by a 3rd party. Why would someone go to the trouble of relabeling perfectly fine Kubota equipment at the shipping docks on Japan’s eastern coast? Money of course, but the story is a little more complicated than that.

Japan’s Equipment Renewal Policy
Before we get into the details of how ZEN-NOH and gray market tractors landed in the United States, a quick lesson on Japan’s equipment renewal policy is in order. Every single year thousands of used right-hand drive cars, Kei trucks, mini-trucks, motorcycles, forklifts, mini track hoes, engines, generators, and so on, are exported in massive volume from Japan to other countries.

A Honda mini truck - the same type that are exported from Japan by the container load every year.

The Japanese government offers huge incentives for its citizens to continually buy new and they impose massive taxes, penalties and red tape for anyone wanting to hang onto their old car, tractor or mini-truck. This process keeps orders flowing to local manufacturers for their durable goods and ensures a strong domestic economy. It is less expensive to purchase or lease a new Kubota tractor for use on your small farm in Japan, than it is to keep and maintain the used one.

What Japanese equipment owners are left with is a very strong incentive to abandon older equipment. This older equipment has to go somewhere. Kubota and ZEN-NOH labeled Kubota tractors must leave Japan, as absolutely no domestic market exists for these small compact tractors in the country of origin. Regardless of the number of hours showing on the hour meter or the name plate on the side of the hood, all older equipment, cars, trucks, generators and what have you, must leave

Early Days of Importing Kubota Tractors
Some saw this massive build-up of supply in Japan of used agricultural equipment as an opportunity. And why not – a container holding 16-18 used Japanese tractors could be purchased, shipped across the ocean and unloaded for the same price as 3 or 4 new tractors. Profitability was guaranteed – an endless supply and a hungry American market.

Early in the 1990s, ground zero for importing used Kubota tractors into North America was 1197 Bacon Way, Lafayette, California 94549. Home of Mike Wallace and Wallace International Trading incorporated in 1984. Kubota did not know it yet, but this tiny operation on the west coast would grab its attention in due time. Keep in mind that at this point, there were no gray market tractors. Kubota had not yet detected and banned the practice.

Wallace was brilliant and recognized very early that a huge untapped market existed in the United States for a good quality, low hour, used compact diesel tractor – especially one that said Kubota on the side of the hood! He sought out and sourced a group of willing Japanese based exporters that would be capable of gathering, cleaning, disassembling, containerizing and shipping the many boxes of tractors he would need to satisfy the demand.

The new business partners in the supply chain included Eisho World Ltd., Nitto Trading Corporation, Sanko Industries Co., Ltd., Sonica Trading, Inc., Suma Sangyo, Toyo Service Co., Ltd., all headquartered in Japan and all cooperating with Wallace International to export these surplus tractors.

A Distribution Network Emerges
Now that Wallace had an agreement to supply used tractors nailed down, finding used equipment dealers wanting to add to their sales and bottom line was not difficult at all. Although selling off shore used compact tractors was unheard of until that point they all bought in agreeing to take several units each as part of an initial order agreement and securing their sales territories.

The initial distribution network for Wallace’s imported Kubota tractors included:

• Bay Implement Company of Monticello, Arkansas
• Casteel Farm Implement Co. of Pine Bluff, Arkansas
• Casteel World Group, Inc.
• Gamut Trading Co., Gamut Imports
• Lost Creek Tractor Sales
• MGA Inc. Auctioneers
• The Tractor Shop
• The Tractor Company

Wallace would handle all the logistics of product selection, shipping, importation, customs clearance, duty and fees as well as offers to buy that were presented via fax to his distribution network of resellers. Within days of landing on US soil the imported units were disbursed to the distribution network. Wallace never actually held inventory – rather tractors were pre-sold to the distributors. Orders were placed with the exporter in Japan only after Wallace had the container load sold locally in the United States.

A Taste of Success
Wallace International Trading now had a supply chain and a method of distribution. The orders were placed, tractors gathered, cleaned, dismantled, packed for shipping, the containers were loaded and at the mid-way point on the voyage, the money changed hands – as is customary.

The first containers each loaded with 16-18 tractors and rototillers hit the water in the Pacific destined for a shipping port on California’s coast. Interestingly, it was not just Kubota tractors on that first boat ride out of Japan. Sharing those containers were other compact diesel tractors made by Mitsubishi, Yanmar, Iseki, Hinomoto, Suzue, and Shibaura.

Things were looking good for Wallace – he had a steady stream of tractors arriving by the container load into his distribution network state-side. He had pioneered the concept of importing inexpensive but high quality compact tractors out of Japan. He was the first one.

Other tractors models commonly imported from Japan: (top) Iseki TS1610 (middle) Shibaura P19 (bottom) Yanmar 2020

Kubota Takes Notice: A Giant Awakens
It did not take very long after the first container loads of Wallace’s imported tractors that intel started to make its way back to Kubota corporate. Early buyers of these imported Kubota’s were now showing up at the parts departments of their local dealer looking for parts for models that the US parts men had never heard of. L1501, B5001, L2201? What?

By 1996 the phones and faxes at Kubota head office started ringing off the hooks as more and more franchised dealers found themselves competing for sales with these off shore Kubota cousins. Sales were brisk! Low hour, like-new Kubota tractors priced thousands less than a new North American model down the street started a ground swell of anger amongst the equity brick and mortar Kubota dealers. The bad blood between imported Kubotas and built-for-America equipment had begun.

Kubota USA knew that their franchisees would revolt, stop paying royalties and probably launch a class action lawsuit against them for allowing this to happen in the first place. Kubota responded to these unauthorized importations by launching a 337 Suit, or in layman’s terms, a classic trademark infringement case.

Wallace, his dealers and his supply chain would be seeing a lot of oak – the inside of a court room!

Up Next, Smashing the “Cartel”
The stage was set for Kubota’s landmark legal case against Wallace International Trading. In our next installment of this series we explore how Kubota flexed its legal muscle to break up the importation of what it called, for the first time, illegal importation of gray market units into the United States. Click here for part 3!

Service Department Vic

Releated Articles
ZEN-NOH and Kubota Part 1: A Partnership
ZEN-NOH and Kubota Part 3: Lawsuits
ZEN-NOH and Kubota Part 4: Loopholes
ZEN-NOH and Kubota Part 5: Fallout

A restored Kubota gray market L1500.

Time for another poll that concerns itself less with snow removal and more with how you, readers of OrangeTractorTalks feel about Kubota’s gray market tractors. You know them as the B5001s, B6001s, L1500, L1501 or maybe a L2202 or L1-18 for good measure. Perhaps you have heard rumors here and there – unsafe, ungodly machines. Built in the blazing forges of hell itself.

Kubota has a handy list of gray market models and a reputation for suing anyone importing these models into the United States back into the stone age. Still, there are lots of Kubota owners who count themselves among those renegades that are using Kubota’s gray equipment to get their everyday work done. So, without further ado…

Jars of biodiesel labled according to their various sources.

Biodiesel. This is a topic that gets kicked around quite a bit these days as public awareness of this alternative fuel source increases. This article will focus on whether as a Kubota owner with equipment under warranty, is biodiesel okay to use without damaging your engine or voiding your warranty. This type of fuel is getting popular so if you have not had a look already, it might still be a good idea to familiarize yourself with biodiesel and its properties.

Ok to use? Yes and No
Yes, since late 2006, Kubota has approved certain models of their lineup for running on biodiesel. The catch is the fuel must come from a refiner that is an accredited producer and the fuel must be a B5 blend of 5% bio-fuel and 95% petroleum diesel. So, certain models are not covered and using a fuel blend higher than 5% or fuel that you make in yourself in the back shed are a no-nos.

Right now, some of the models Kubota has approved for B5 blend include:

• BX1500, BX1800, BX2200, BX1830, BX2230, BX1850, BX2350, BX22, BX23 and BX24
• B7410, B7510, B7610, B7800, B2630, B3030, B21 and B26
• L2800, L3400 and L4400 (Kubota’s Super Three engines)
• L3130, L3430, L3830, L4330, L4630 and L5030
• L39 and L48 – possibly L45 when it comes out this spring/summer

You can read Kubota’s press release regarding its stance on the use of biodiesel in its equipment and see the full list of models.

Why not Higher Blends?
There is another blend of biodiesel that is trying to make headway – B20 which is a 20/80 blend of bio-fuel and the usual petroleum diesel. In 2003 the Engine Manufacturers Association (EMA) released a ruling that the maximum biodiesel blend for mass-produced agriculture and automotive engines should be B5, not B20. It looks like Kubota is also falling into alignment with this recommendation.

Reading through Kubota’s press release on biodiesel they use a lot of the same terms quoted as the EMA’s for their reasoning behind the use of B5 so it is unclear if Kubota performed their own first-hand testing with biodiesel or is simply following this recommendation.

Drawbacks of Higher Blend Biodiesel
Reading through the EMA’s ruling, they list these reasons against blends higher than 5%:

“neat biodiesel and higher percentage biodiesel blends can cause a variety of engine performance problems including filter plugging, injector coking, piston ring sticking and breaking, elastomer seal swelling and hardening/cracking, and severe engine lubricant degradation. In addition, elastomer compatibility with biodiesel remains unclear; therefore, when biodiesel fuels are used, the condition of seals, hoses, gaskets and wire coatings should be monitored regularly.”

“Neat” as in how you have your drink – 100% pure – like without diluting your single malt scotch and ruining the whole thing!

What this means is that if you do decide to go with biodiesel, keep lots of filters on hand for the fuel system or consider installing a secondary fuel filter. Also, biodiesel does not store well for long periods as regular diesel fuel does. It absorbs moisture from the air and lacks the additives to prevent clouding and gelling of the fuel in cold climates. The use of a magnetic block heater would be advised to keep the bio-fuel warm in the tank if your Kubota is spending time in a sub-zero working environment.

Service Department Vic

The business end of Steve Foulks' Kubota B3030 and snowblower.

About two months ago we posted a poll inquiring what implements readers of OrangeTractorTalks use to clear snow with. Now that spring is on the horizon (in some places!), we thought we would share the results. Voters could choose multiple selections on their entry but were limited to voting once per household.

After more than 650 votes, those of us clearing the driveway so the family car, truck or van can get to town are clearly using the trusty front end loader to get the job done. About 45% of responders relied on their loader versus 31% using a snow blade.

16% were lucky enough to have a snowblower and interestingly, 2% of folks (12 people) admitted to having snow, seeing the snow but not caring to move it. I have two theories as to why these people may have not been able to move the snow:

1. they were riding their snowmobiles around while the rest of us plugged in the block heaters and preheated those glow plugs or
2. their Kioti/John Deere/Ford/Massey was back in the shop again

Regardless of the implement, I think we have a dedicated batch of snow clearers!

Related Articles
Poll: What Implements are you Using to Clear Snow?
How to Clear Snow with a Snow Blade
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