Updated Oct. 15, 2021, 10:57 a.m.
Deere failed to reach an agreement with its workers and the UAW on a new labor agreement, resulting in 10,000 workers going on strike — the first time Deere employees have gone on strike in 35 years. Depending on how long the strike lasts, it could exacerbate the inventory challenges dealers are facing.
According to a report by the Wall Street Journal, "the striking workers make up more than one-third of Deere's 28,000 employees in the U.S. About 4,000 production workers at non-union plants or represented by other unions remain on the job, the company said. Deere has about 14,000 management and administrative employees."
One dealer noted that impact could range from insignificant to substantial, depending on how long the strike lasts and how Deere potentially uses other employees to keep things moving. Multiple dealers noted that Deere was bringing in salaried employees from other regions to help.
The strike comes in the midst of harvest throughout much of the U.S and a time that parts are in high demand. According to USDA's Oct. 10, 2021, Crop Progress Report, 41% of the U.S. corn crop has been harvested and 49% of the soybean crop has been harvested.
After 90% of union members rejected the proposed contract agreement the parties had until Oct. 13 at 11:59 p.m. to reach an agreement.
The details on the rejected agreement, posted on UAW's website, mention maintained healthcare copays, improved pensions and retirement and wage increases as summary points.
“Our members at John Deere strike for the ability to earn a decent living, retire with dignity and establish fair work rules,” said Chuck Browning, Vice President and director of the UAW’s Agricultural Implement Department. “We stay committed to bargaining until our members' goals are achieved”
UAW President Ray Curry, said “the almost one million UAW retirees and active members stand in solidarity with the striking UAW members at John Deere.”
Curry noted that, “UAW John Deere members have worked through the pandemic after the company deemed them essential, to produce the equipment that feeds America, builds America and powers the American economy. These essential UAW workers are showing us all that through the power of a strong united union voice on the picket line they can make a difference for working families here and throughout the country.”
Over 10,000 members at John Deere locations set up pickets. ”Pickets have been set up and our members are organized and ready to hold out and fight for a contract they believe meets their needs,” said Ron McInroy, director of UAW Region 4. “Our members and their families appreciate the community support they have already gotten. Strikes are not easy, but some things are worth fighting for.”
“These are skilled, tedious jobs that UAW members take pride in every day,” said Mitchell Smith, UAW Region 8 director. “Strikes are never easy on workers or their families but John Deere workers believe they deserve a better share of the pie, a safer workplace, and adequate benefits.”
The rejected agreement would have provided an immediate 5-6% raise for most workers, according to UAW vice president Chuck Browning. Workers said the pay raises were inadequate given that John Deere is expected to make nearly $6 billion in profits this year, according to a report by The Hill. Union members also disapproved of how the pay hikes would be offset by pension cuts for new hires.
There are 14 facilities impacted by the strike. In Iowa that includes Davenport Works, Des Moines Works, Dubuque Works, Ottumwa Works and Waterloo Works, including Tractor and Cab Assembly, Engine Works and the Foundry. In Illinois, the facilities are Harvester Works in East Moline, North American Parts Distribution Center in Milan and the Seeding Group and Cylinder Division in Moline. In Kansas, there is one facility, Coffeyville Works. In Colorado, a parts distribution location and Georgia the compact utility and utility tractor factory.
One dealer noted that for 12 of their locations, they currently have 2,800 line items on back order from Deere. Those parts are all serviced from the Milan distribution center. Some of those orders go back a few months, and with the strike he now fears increased back orders and delayed deliveries.
One Case IH dealer, when asked about likelihood of more color conversions as a result of this news, replied. " While it may be a short term positive for
Deere’s competition, it will hurt all of us in the long haul if unions win." He added that while he didn't know the specifics of John Deere's offer, he's sure they won't want to miss out too much of the current strong market.
"John Deere is committed to a favorable outcome for our employees, our communities, and everyone involved," said Brad Morris, vice president of labor relations for Deere & Company. "We are determined to reach an agreement with the UAW that would put every employee in a better economic position and continue to make them the highest paid employees in the agriculture and construction industries. We will keep working day and night to understand our employees' priorities and resolve this strike, while also keeping our operations running for the benefit of all those we serve."
Deere & Company does not currently have an estimate of when employees affected by the strike will resume activities or the timing for completion of negotiations with the UAW.
In the coming years, other manufacturers have labor contracts up for renewal. According to Brian Rothenberg, UAW director of public relations, Caterpillar’s contract is up for renegotiation in 2023 and both Case IH and New Holland’s labor contracts expire in 2022.
Ag Equipment Intelligence will continue to monitor the news and update as more information becomes available.