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Cyril Keller Recalls Entrepreneurial Skid Steer Gamble

A Brother team dreams, and creates an industry iron staple.

Mon April 28, 2014 - National Edition
Giles Lambertson

In 1958, Louis Keller drove his truck into the barnyard of western Minnesota turkey farmer John Sonstegard. He entered the building where Sonstegard was working and told the farmer he had a machine outside that would efficiently clean his manure-laden barns. The farmer agreed to take a look at it. It was not love at first sight.

"When we clean barns, we clean barns," Sonstegard scolded Keller. "I don't need a toy."

The rejection was classic, for Keller's "toy" was the progenitor of the modern skid steer compact loader — specifically, the Bobcat loader. Keller and his brother, Cyril, had developed the machine two years earlier for another farmer and were shopping it around.

Sonstgard's dismissal obviously was not the end of the story. After the farmer strode back into his barn, Louis Keller didn't slink away. Showing the indefatigable belief that marked his inventive career, Keller turned to the farm foreman and offered to clean a barn for free. The man agreed and Keller returned some days later with his machine.

With Keller at the controls, the little loader scooped up manure and topped off five waiting trucks so swiftly that the truckers couldn't keep up with him. Finally, Sonstegard himself walked into the area where the loader was working — almost being run over by the backing machine — and scolded Keller again, this time for not telling him how well the machine would do the job. He ordered two loaders.

The story of the blacksmithing Keller brothers of Rothsay, Minn., has become a familiar one, about how they personally upended the construction machinery idea that bigger is better. The dimensions of their "toy" loader became the forerunner of a compact equipment market that still is expanding in 2014. Tens of thousands of skid steer loaders are sold every year, with the one millionth Bobcat expected to roll off the assembly line in June.

But forget the numbers. The story is principally about the human spirit and such immeasurable qualities as tenacity, vision and joie de vivre. The Keller brothers epitomized all these characteristics as they evolved their little three-wheeled machine into an industry.

The Idea

Turkey farmer Eddie Velo gave the Kellers the germ of the idea in 1956. He approached the brothers about building a small loading machine that could operate nimbly on a second floor. The Kellers accepted the challenge, agreeing to charge only for materials if they tried and failed.

It was an entrepreneurial gamble. Operating from a small shop in Rothsay, the brothers had no way of knowing at that moment that their business would continue to expand into ever-larger rented and then owned properties around town and eventually outgrow the town. The plowshares and custom wagons they turned out in their blacksmith shop were steadily in demand from area farmers, so time taken away for long-shot R&D of a new machine was valuable to them.

The gamble paid off. The Kellers built the first machine in just six weeks and, in February 1957, Velo was invoiced for what was called the "Keller Self-Propelled Loader." The belt-and-chain driven loader was a three-wheeled scooping machine powered by a 6.6-hp (4.9 kW) Kohler engine with the driver seated astraddle the controls just ahead of the motor.

It rolled on two standard car tires situated right behind a 52-in.-wide bucket (132 cm), with a smaller, swiveling caster wheel at the rear end. The bucket was raised and lowered hydraulically using a pair of foot pedals. The nine-ft.-long (2.7 m) machine was steered using two levers operating the power-transfer belts. With one wheel rolling forward and the opposite wheel rolling backward, the loader pivoted in its own length.

"Everyone wanted a steering wheel," Cyril Keller said now of customers' initial reactions to the revolutionary loader. "Other machines had hydraulic controls operated by your hands, but now your feet were doing it. It was totally new."

The inventors monitored the first loader's performance on the Velo farm. When the machine's belts proved problematic, sometimes slipping off and rendering the machine inoperable, the brothers went back to the drawing board. The result was a durable clutch system that remained the mainstay of Bobcat skid steer loaders, even well beyond the advent of hydrostatics in 1970.

The Buzz Begins

After building and selling a half-dozen loaders, the brothers knew they were on to something. Bankers and community leaders in Rothsay and nearby Fergus Falls weren't so sure. Neither community was willing to come up with $250,000 to set up a plant to build the Keller machine.

So Anton Christianson, an uncle of the brothers, had another idea.

Christianson sold agriculture implements for Melroe Manufacturing, a company located in Gwinner, N.D., about 70 miles west of Rothsay. When one of four Melroe brothers, Les, visited the company's Elbow Lake, Minn., dealership where Christianson worked, Melroe was asked to drive to Rothsay and check out the patented loader. After seeing it demonstrated, Melroe invited the Kellers to display it at the Melroe exhibit at the 1958 Minnesota State Fair.

It was a hit. In fact, after a thousand pieces of literature on the Keller Self-Propelled Loader were snatched up by curious fairgoers, Cyril Keller saw Les Melroe putting Melroe Manufacturing Co. stickers on the loader. "I said, hey, that's our machine!" Keller gleefully remembers. A contract was worked up a month later and the Melroe loader — four years later rebranded a Bobcat — began to be produced in Gwinner.

The brothers were asked to develop an improved "Melroe" loader and were assigned three employees to help fabricate parts. After the first six loaders were built, Louis Keller settled in to oversee continuing development and Cyril, the more gregarious of the brothers, hit the road selling them.

"They asked me to go across Iowa and see what I could do, so I did and sold four machines. The last buyer wanted a discount and I had to call Melroe to see about that," Cyril said. The company sold 25 Melroe loaders the first year and, more importantly, placed the loader in dealerships across the region.

The Kellers collected and shared a $15 royalty from each machine sold, a formula that remained unchanged over the years even as the sales price of the skid steer loaders climbed.

Cyril Keller traveled throughout the country, into Canada, and across the Atlantic Ocean to Europe, seizing every opportunity to show off the capabilities of the loader.

"If I saw another loader parked somewhere, I would stop and demonstrate our machine," he recalled.

He scooped brown sugar from a boxcar in Texas and soda ash from the hold of a docked ship in Holland. He impressed bystanders at every stop with deft loader demonstrations, and amiably turned gawkers into buyers.

Cyril enjoys telling of another classic misjudgment by a potential buyer. He was on his way to demonstrate the loader to a North Dakota farmer when he impulsively stopped at a farmers co-op in Dickinson. He showed the loader to the manager and gave him a piece of literature, but was quickly rebuffed. "You know," said the manager, "it is guys like you and stuff like this that makes people like me go broke."

Unfazed, Cyril Keller drove on for the scheduled demonstration at the farm. Afterwards, the farmer not only was enthusiastic about the Melroe loader, it turned out he was president of the very co-op Keller had visited. The co-op manager's decision was reversed.

Engineering the Skid

As the loader grew in popularity, market forces began to shape the machine. Cyril Keller reported back to his brother at the factory that the rear caster wheel's inability to handle soft earth was a recurring problem. After the two brothers talked through the matter, Louis Keller began to tinker in earnest. His solution was to get rid of the caster wheel and put an additional drive wheel on each side of the main housing.

Because all four wheels were fixed, however, turning the machine was an engineering challenge. "Louie kind of figured that out," Cyril Keller said.

First joining the wheels on each side by chains and controlling them through the patented clutch system, Louis Keller then determined through trial and error that a 70-30 weight distribution would let the front or rear set of wheels skid sideways in a turn. A loaded bucket lightened the rear wheels, an empty bucket lightened the front wheels. This weight shift allowed the loader to pivot.

The solution was skeptically received: Louis Keller was offered a steak dinner if the four-wheel loader actually turned. While he never got that steak dinner, it worked just fine, for when Louis Keller put his inventive mind to a task, success was the usual outcome. Several years before he and Cyril tackled the self-propelled loader, Louis built and sold the first tractor-mounted ribbon auger snowblower and then the first walk-behind snowblower. The skid steer was just the latest product of his original thinking.

"Everything he worked on, he learned from. He was always quick to see when something wouldn't work," said Louis Keller's son, Joe. The younger Keller remembers his father — who died in 2010 at age 87 — as a supremely self-assured innovator with great vision. "He would tell people, 'I am just as confident that it will work as you are that it won't work."

Firmly believing that a machine that lacked steerable wheels could somehow be turned, Louis Keller gave birth to the skid-steering system. With nothing else like it in the market, the Melroe compact loader was set loose to corner the market as an extremely nimble machine of tremendous utility.

The Sibling Team

Did Cyril Keller and his brother enjoy working as a team? "We were the best team in Minnesota … and North Dakota," he quickly responded. "We loved to work together."

The team formed after World War II service overseas — Cyril as a Navy cook and Louis an Army mechanic. Louis started his blacksmithing business in 1947 and Cyril joined him in 1953, leaving behind a position as a New Holland mechanic. "Louie called and said, 'There is so much work that I can't take care of it.' Something kept telling me to go ahead and do it," Cyril Keller recalled.

So he and his wife left their new home in Elbow Lake and moved to Rothsay. The brothers relocated the shop from a double garage to a larger space and, in a Cyril jest, hung a whimsical sign above the shop door: "We repair everything except a broken heart." Cyril was the superior welder, Louis the better machinist. Building better plowshares became their joint preoccupation.

However, an inventive gene runs strongly through the family. The brothers' grandfather liked to make things and Louis Keller often stopped by his grandfather's house after school to tinker in his shop with him (sometimes leaving Cyril to do farm chores by himself). Eventually, each of the four Keller brothers was issued at least one patent for an invention.

So when the loader project was dropped in their laps, the brothers' fabrication work got more interesting. Putting their heads together, they brainstormed and began to see real possibilities. "We thought it could go," Cyril Keller said, looking back, "but we didn't imagine it would go like it did." Such prodigious success was simply unimaginable in 1957.

Later when the team took on specialized roles at Melroe — Louis fabricating and Cyril selling — it continued to function at a high level. Cyril Keller would relay feedback from customers to his brother at the plant. The two men probably communicated with one another better than they did with other Melroe personnel, said Louis Keller's daughter, Marilyn Loegering. Both men were schooled only through the eighth grade, so their understanding of machinery and manufacturing was forged mostly of tactile memory and instinct. Their working terminology was coined from experience and served them well.

The Later Years

Cyril Keller retired in 1984 and turned 92 this month. He stepped back some 15 years after Louis, who left the company only to pursue another project. He wanted to build a smaller loader — a "mini-Bob" — that would fit through three-foot entranceways. Bobcat executives weren't interested, so Louis set up his own shop at home and methodically downsized the skid steer.

As the idea came together, the company got interested. In 1971, Bobcat sent the prototype and a larger model to a dealership convention in Phoenix, Ariz. In two days, the mini-Bob, later dubbed the M371, attracted 950 dealer orders. It ultimately stayed in production longer than the other exhibited machine.

Louis Keller designed numerous attachments for the skid steer. He also introduced tracks to give the loaders additional traction. Because Bobcat again showed little interest, Louis turned to his daughter Marilyn and her husband, George Loegering. The couple geared up and manufactured the Loegering Tire Crawler Track, which spawned the industry's compact track loader segment.

Louis' well of innovation never went dry. When he died four years ago, Louis Keller had sketches of ideas he hadn't gotten around to fully developing, Joe Keller says.

The skid steer story has earned the Keller brothers official state and industry recognition in Minnesota, North Dakota, and California. Some of their papers are in the Smithsonian Institution. The American Society of Agriculture Engineering honored them with its "Historic Landmark" award, an honor only periodically given out. Fortune Magazine saluted the pair by naming the skid steer loader one of the 100 best American-made products in the world.

Just three years ago, a woman paid a particularly bright tribute to the skid steer loader. Cyril Keller told with relish how the woman reacted when her betrothed showed her a diamond engagement ring. "I would rather have a Bobcat, " she announced. She told her (probably stunned) future husband that she had learned to drive a skid steer at age nine and the machine still held a special place in her heart. Of such testimonies are legends made.

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