Varity
Varity was a Canadian-founded multinational manufacturing company created from the restructured assets of Massey Ferguson.
Last updated August 26, 2026
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Overview
Varity was a Canadian-founded multinational manufacturing company established in 1986 from the viable operating assets of the financially troubled Massey Ferguson group. Its creation followed a prolonged decline at Massey Ferguson, once one of Canada's largest industrial multinationals and a major global producer of farm equipment. Massey Ferguson had expanded beyond agricultural machinery during the 1960s and 1970s, accumulated substantial debt, and suffered heavy losses during the recessionary environment of the late 1970s and early 1980s. The restructuring was intended to separate continuing businesses from much of the former company's debt and pension liabilities, allowing important operations and brands to survive under a new corporate structure. The new company was named Varity after an internal naming process. A proposed connection to the historical name “Verity,” associated with an earlier agricultural-equipment business acquired by Massey-Harris, could not be used in its preferred form, so the spelling was altered. Varity was organized around three principal areas: Massey-Ferguson farm equipment, Perkins Engines, and Varity Enterprises. At its formation it had substantially reduced its debt and workforce compared with the former Massey Ferguson group, while still reporting significant international sales. Massey-Ferguson remained an important tractor brand and continued to operate as one of the company's principal businesses. During the late 1980s and early 1990s, Varity increasingly shifted toward engines and automotive components. It acquired a controlling interest in Fruehauf, whose Kelsey-Hayes operations produced wheels, wheel-end systems, and braking equipment for cars and trucks. Varity also developed Perkins Engines through acquisitions connected with the former Rolls-Royce diesel-engine business. These moves broadened the company beyond agricultural machinery but also made it more dependent on industrial and automotive component markets. The company's corporate identity and Canadian base changed in the early 1990s. Although public assistance connected with the 1986 restructuring included conditions concerning Canadian operations, chief executive Victor A. Rice moved Varity's headquarters to Buffalo, New York, in 1991, and the company ceased to be a Canadian corporation. Varity subsequently disposed of its agricultural-equipment operations. In 1994, those divisions were sold to AGCO Corporation, which retained the Massey Ferguson brand and continued to source engines from Perkins for certain products. Massey Ferguson therefore survived as a brand within AGCO rather than as a Varity-owned operating division. In 1996, Varity's remaining electrical, braking, and diesel-engine activities were combined with Lucas Industries' automotive and aerospace operations to form LucasVarity, a British-based company. The merger marked the effective transition from Varity as an independent diversified manufacturer to a successor enterprise focused largely on automotive, aerospace, electrical, braking, and engine-related activities. Perkins Engines was sold to Caterpillar in 1998. In 1999, TRW acquired LucasVarity for approximately US$6.53 billion, ending the independent corporate existence of the Varity successor. By 2000, Varity itself was no longer operating as a separate company, although businesses and brands descended from its divisions continued under later owners.
History
Varity emerged from the collapse and restructuring of Massey Ferguson, a Toronto-based agricultural-equipment manufacturer with roots extending back to the nineteenth century. During the 1970s, Massey Ferguson was a large international business with sales exceeding one billion Canadian dollars, but diversification, international expansion, recession, and high borrowing costs weakened its finances. After Conrad Black gained control of the Argus Corporation and Massey Ferguson in 1978, management pursued cost reductions and plant closures. The company recorded a large operating loss, closed its Akron, Ohio, plant, and later shut additional facilities while reducing senior management. By 1980 it was insolvent and heavily indebted. A refinancing program completed in 1981 with lenders from Canada, France, and Britain reduced immediate pressure but did not resolve the structural problems. Massey Ferguson continued to close facilities and dispose of businesses. At the same time, management attempted to strengthen Perkins Engines, including through the purchase of the former Rolls-Royce diesel-engine interests in 1983. These measures reduced losses but left the agricultural-equipment group burdened by debt and pension obligations. In 1986, the governments of Canada and Ontario provided financial assistance on terms intended to preserve Canadian manufacturing and the company's continuing operations. Massey Ferguson was renamed Varity, and the business was reorganized into Massey-Ferguson, Perkins Engines, and Varity Enterprises. The restructuring reduced debt to approximately CA$400 million and left the company with about 18,000 employees, compared with roughly 68,000 in 1975. Massey-Ferguson remained a major tractor supplier, while Perkins provided a route into industrial and diesel-engine markets. The restructuring also involved the treatment of liabilities associated with Massey Ferguson's former operations. In 1988, the Massey Ferguson Combines facilities in Brantford, Ontario, were closed. Debt and pension obligations connected with the combine business had been transferred as part of the earlier reorganization, and the closure helped remove those obligations from the continuing group. Varity's former Toronto industrial complex was also gradually sold and prepared for redevelopment. Varity expanded into vehicle components in 1989 by acquiring a majority interest in Fruehauf, the parent of Kelsey-Hayes. Kelsey-Hayes operated plants in Canada, the United States, and Europe and supplied wheels, wheel-end components, and anti-lock braking systems. This acquisition made automotive components one of Varity's most important areas alongside engines and farm equipment. In 1991, Victor A. Rice moved Varity's headquarters to Buffalo, New York, despite the Canadian context of the company's creation and government support. The move symbolized the company's increasing orientation toward United States and international capital markets. In 1994, Varity sold its agricultural-equipment divisions to AGCO for cash and stock. AGCO retained the Massey Ferguson name as a continuing agricultural brand and maintained a relationship with Perkins as an engine supplier. Varity's remaining activities were combined with Lucas Industries in 1996 to create LucasVarity. The successor focused on automotive electrical systems, braking products, diesel engines, and aerospace-related activities. Perkins Engines was sold to Caterpillar in 1998. In March 1999, TRW acquired LucasVarity, effectively ending the independent corporate lineage of Varity. TRW later became part of the broader TRW Automotive and ZF structures. Varity was therefore defunct by approximately 2000, although Massey Ferguson, Perkins, Kelsey-Hayes, and other operations continued under different ownership arrangements.
- 1999
TRW acquires LucasVarity
[1]TRW purchased LucasVarity, ending Varity's independent corporate succession.
- 1998
Caterpillar acquires Perkins Engines
[1]Perkins Engines was sold to Caterpillar after the creation of LucasVarity.
- 1996
LucasVarity is formed
[1]Varity merged its remaining electrical, braking, and diesel-engine activities with Lucas Industries.
- 1994
Agricultural-equipment divisions sold to AGCO
[1]AGCO acquired Varity's farm-equipment operations and continued the Massey Ferguson brand.
- 1991
Corporate headquarters move to Buffalo
[1]Varity transferred its headquarters to Buffalo, New York, and stopped operating as a Canadian corporation.
- 1989
Fruehauf and Kelsey-Hayes enter the group
[1]Varity acquired a majority interest in Fruehauf, expanding into wheels and braking systems.
- 1988
Brantford combine operations close
[1]Varity closed Massey Ferguson's combine manufacturing facilities in Brantford, Ontario.
- 1986
Varity is established
[1]Massey Ferguson was renamed Varity following government-supported restructuring.
- 1983
Perkins expands through Rolls-Royce diesel assets
[1]Massey Ferguson strengthened its Perkins Engines division by acquiring the former Rolls-Royce diesel-engine international business.
- 1981
Major refinancing completed
[1]The company completed a refinancing package with lenders in Canada, France, and Britain.
Products and positioning
A diversified industrial manufacturer transitioning from agricultural machinery into diesel engines and automotive components.
Agricultural machinery
Massey Ferguson agricultural equipment
Massey Ferguson was Varity's principal agricultural-equipment business and included tractors and related farm machinery. The brand had been central to Massey Ferguson's international identity before the 1986 restructuring. Varity later sold the agricultural divisions to AGCO in 1994, after which Massey Ferguson continued as an AGCO-owned brand.
Diesel engines
Perkins Engines
Perkins Engines was Varity's diesel-engine division and one of the company's main efforts to diversify beyond farm equipment. Its business supplied engines for industrial and related applications and was strengthened by the acquisition of former Rolls-Royce diesel interests. Perkins was sold to Caterpillar in 1998.
Automotive components
Kelsey-Hayes automotive components
Kelsey-Hayes supplied wheels, wheel-end components, and anti-lock braking systems for cars and trucks. It became part of Varity through the 1989 acquisition of a majority interest in Fruehauf, Kelsey-Hayes's parent company, and later formed part of the automotive-component portfolio transferred into LucasVarity.
Brand decisions
1999
Sell LucasVarity to TRWM&ABackground
LucasVarity had become a large international automotive and aerospace-components company following the 1996 combination.
Action taken
TRW acquired LucasVarity.
Aftermath
The acquisition ended the independent corporate existence of Varity's principal successor and led to the later closure of the Buffalo headquarters.
Acquisition consideration. US$6.53 billion (March 1999)
1998
Divest Perkins EnginesM&ABackground
LucasVarity continued to rationalize the businesses inherited from Varity.
Action taken
Perkins Engines was sold to Caterpillar.
Aftermath
Perkins continued under Caterpillar ownership rather than within the LucasVarity group.
1996
Combine Varity with Lucas IndustriesM&ABackground
After the agricultural-equipment sale, Varity's remaining businesses were concentrated in automotive electrical, braking, and diesel-engine activities.
Action taken
The remaining Varity divisions merged with Lucas Industries' automotive and aerospace operations to create LucasVarity.
Aftermath
Varity ceased to function as an independent diversified manufacturer, while Victor A. Rice became chief executive of the new company.
1994
Sell the farm-equipment divisions to AGCOM&ABackground
Varity was concentrating increasingly on engines and automotive components and chose to exit direct ownership of its agricultural-equipment operations.
Action taken
The farm-equipment divisions were sold to AGCO for cash and stock.
Aftermath
AGCO continued the Massey Ferguson brand, while Varity retained a commercial relationship with Perkins as an engine supplier.
Transaction consideration. US$300 million in cash plus US$18 million in stock (1994)
1989
Acquire a majority interest in FruehaufM&ABackground
Varity sought to increase its exposure to automotive components and diversify beyond agricultural equipment and engines.
Action taken
Varity acquired a majority interest in Fruehauf, bringing Kelsey-Hayes and its wheel and braking operations into the group.
Aftermath
Automotive wheels, wheel-end products, and anti-lock braking systems became important parts of Varity's portfolio.
Acquisition consideration. US$700 million (1989)
1986
Separate viable operations from Massey Ferguson liabilitiesStrategyBackground
Massey Ferguson's prolonged losses, debt, and pension obligations threatened the continuation of its operating businesses.
Action taken
The company was renamed Varity and reorganized around Massey-Ferguson, Perkins Engines, and Varity Enterprises.
Aftermath
The restructuring allowed major operating businesses and the Massey Ferguson brand to continue, while the group reduced debt and employment.
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