More than 10,000 union workers at 14 John Deere plants in Iowa, Illinois, Kansas, Colorado, and Georgia approved a tentative deal with the company on Nov. 17, putting an end to a strike that began on Oct. 14 and threatened to worsen farm machinery supply chain disruptions (GM Oct. 15, p. 1).
The agreement, which will increase pay and boost retirement benefits, was supported by 61 percent of United Auto Workers, with 39 percent voting to reject the agreement. The strike was the first at the Moline, Ill.-based Deere & Co. since 1986. Union workers had rejected two earlier offers.
“I’m pleased our highly skilled employees are back to work building and supporting the industry-leading products which make our customers more profitable and sustainable,” said John C. May, Chairman and CEO for Deere. “John Deere’s success depends on the success of our people. Through our new collective bargaining agreements, we’re giving employees the opportunity to earn wages and benefits that are the best in our industries and are groundbreaking in many ways. We have faith that, in return, our employees will find new and better ways to improve our competitiveness and transform the way our customers do their work.”
The agreement is a six-year contract that will increase worker wages by 10 percent in the first year and then 5 percent in the third and fifth years, Bloomberg reported. A 3 percent bonus would be paid in the even years of the contract based on prior-year earnings, and each worker will receive an $8,500 signing bonus.
“John Deere and Company has made a last, best, and final offer to the UAW negotiating team that includes modest modifications to the last tentative agreement presented for ratification on Nov. 2,” the UAW said in a statement before the Nov. 17 vote. “As a result, the UAW will present the company’s offer for ratification and, as has been the case throughout the bargaining process, will support the outcome as determined by our members.”
The final agreement was similar to the second that was rejected by 55 percent of union workers on Nov. 2, with the latest proposal offering modest changes to the details of Deere’s internal incentive pay program for workers. Deere officials had told the union not to expect more money after the last vote on Nov. 2, the Associated Press reported, and the company largely struck to that promise in its latest offer.
Deere’s shares climbed the most in two weeks with the end of the strike, rising as much as 3.5 percent, the most since Nov. 1, Bloomberg reported.
The strike occurred five months after Deere’s stock hit an all-time high of just over $400.34 per share, according to Bloomberg (GM Oct. 22, p. 1). According to its third-quarter earnings report on Aug. 20, the company reported net income of $1.6 billion, up from $811 million one year earlier. Worldwide net sales and revenues increased 29 percent during the quarter to $11.5 billion, and net sales of the equipment operations totaled $10.4 billion.