A Deere & Co. executive said Monday that the manufacturer will be able to shift some production to its overseas sites as the 10,100-employee strike affecting plants in Iowa, Illinois and Kansas continues.
Cory Reed, president of the company’s Worldwide Agriculture & Turf Division, told the Des Moines Register that Deere executives still want to reach an agreement with the striking United Auto Workers members, but that company leaders have pulled levers to keep some products flowing since the strike began Oct. 14.
The striking workers represent about 13% of all Deere employees, including workers at plants in Brazil, China, France, Germany, India and Mexico. Reed said executives routinely consider whether to increase production at foreign factories as part of their “normal, continuous operations.”
“Sometimes that means bringing parts in from one of those operations from around the world,” he said. “And by the way, (Deere’s international factories) employ thousands of employees in each of those places, too, that step up and step in and help us continue to deliver the parts and components that we need.”
When the UAW announced the strike, Deere moved nonunion employees into production roles to fill the gap at factories including Iowa locations in Ankeny, Davenport, Dubuque, Ottumwa and Waterloo, its largest single production facility.
Those employees include engineers, supervisors and financial services managers. The company has declined to comment on whether the substitutes have been able to maintain the union workers’ level of productivity.
Reed did not confirm or deny that Deere will hire outside workers as the strike continues.
“If we walk through this and the information that’s in front of folks, the deal that’s in front of them, doesn’t work for them, we have to figure out how we continue to serve our customers going forward,” he said. “That planning is always ongoing.”
Reed also declined to confirm or deny a Bloomberg report that Deere dealerships are waiting three weeks for parts that the company previously could deliver in two or three days. He said executives have placed a priority on shipping products specifically for Deere equipment that has suffered breakdowns in the field.
He acknowledged, however, that dealerships looking to add parts to their inventory are having to wait longer than usual.
A Barclays report based on cell phone location tracking found that Deere actually increased the number of workers at parts fulfillment centers by 60% in the weeks after the strike began, compared to the same period in 2019 and 2020. Meanwhile, the number of workers at Deere’s agricultural equipment factories was down 34%, while the number of workers at the construction and forestry plants in Davenport and Dubuque was down 62%, Barclays reported.
The drop in workforce at the factories could explain why dealerships are waiting longer for parts.
“Some of those (parts) have to be made,” Reed said. “Some of those have to be poured, machined, welded. And we’ve had our workforce engaged, thousands of people engaged, being able to make sure that we hit every one of those orders that we can.”
Reed’s statements came as some Deere workers organized a picket line outside the company’s Moline, Illinois, headquarters Monday morning, WQAD-TV reported. Until now, the members have picketed only outside of the factories and warehouses where they worked.
UAW International spokesperson Brian Rothenberg declined to comment on the report Monday, and said he was not sure when UAW and Deere negotiators will return to the bargaining table. Company spokesperson Jennifer Hartmann said last week that the latest contract UAW members rejected was the company’s “best and final” offer.
Deere and the UAW began negotiating a new six-year agreement in August, two months before the most recent contract was set to expire. The strike began days after 90% of members turned down the first proposed contract.
Two weeks later, the UAW and Deere reached a second tentative agreement, which would have boosted wages by 10% and enhanced retirement benefits. The company also promised to provide quarterly cost-of-living adjustments.
The union voted down that proposal Nov. 2, this time by 55%-45%. Hartmann said last week that the company will appeal directly to members to reconsider.
Deere officials also are talking with UAW representatives to better understand why members rejected the deal. The company continues to say it will not increase its monetary offer in any subsequent proposed agreement.
But some UAW members have told the Register they continue to believe Deere can, in fact, afford to pay more. The negotiation began as Deere boasted record profits, with executives telling investors in August that the company was on track for a net income of $5.7 billion to $5.9 billion in the fiscal year that ended last week — at least 62% above what Deere earned in 2013, its previous record year.
CEO John May earned $15.6 million in 2020, up about 160% compared to his 2019 earnings.