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= 2021 John Deere Strike and Resolution = Jump to navigationJump to search The

2021 John Deere labor strike began on October 14th, 2021 over labor contract disagreements between John Deere and factory employees. The strike involves over 10,000 workers in five states and the company which is the leading global manufacturer of farm and construction heavy equipment. Final agreement was reached between employee labor representatives and contract negotiators on November 17, 2021. This was the first labor disagreement leading to a strike for the company since a five-month walkout occurred in 1986-1987.

Background
John Deere is a US-based agricultural and heavy machinery manufacturer, headquartered in Moline, IL. The company is the world's largest manufacturer of farm equipment and employs about 27,500 people in the United States and Canada. The United Auto Workers (UAW) labor union represents over 10,000 Deere manufacturing employees, including including 7,200 at seven factories in Iowa, three in Illinois, one in Kansas, and one distribution center in Colorado, Georgia, and Illinois respectively. The previous six-year labor agreement reached in 2015 that set wage, healthcare, and retirement benefits was set to expire in October, 2021.

August 2021
Beginning on August 18th, 2021, UAW and company negotiators began preliminary discussions for the labor contract set to expire on October 1st, 2021. Shortly after opening negotiations, Deere announced earning record annual profits with three months remaining in its fiscal year ending September 30, 2021. This announcement provided leverage for union demands in the upcoming mediations.

September 2021
After multiweek talks, union and company negotiators submitted a tentative plan for worker approval. On September 13th, union members rejected the preliminary agreement and authorized a worker strike with 99% member approval. Additionally, on September 14, some John Deere workers picketed the John Deere World Headquarters in Moline, Illinois in response to some of the issues they had with the company.

October 2021
On October 1st, the existing contract between the union and company expired, but the two sides agreed to a temporary extension while negotiations continued. Preliminary offerings by the company offered significant raises across the board but stressed the elimination of pensions for new hires. Despite UAW negotiators stating that the deal would result in "the highest quality health care benefits in the industry" and "significant economic gains" for the workers, on October 10th, UAW vote rejected the offer by a 90% rejection margin. The proposed contract would have enacted immediate wage increases of 5 to 6 percent for all workers and subsequent 3 percent raises in both 2023 and 2025. This would have meant hourly pay of $30 for the top-tier workers at the plants, rising to $31.84 after five years. Additionally, the contract maintained the workers' premium-free health care plan, included a cost of living adjustment, and guaranteed a retirement bonus of up to $50,000. However, union members stated that the proposal did not include large enough wage increases and did not meet goals regarding retirement benefits. Specifically, the contract would result in new hires receiving lower retirement benefits than existing employees. Instead of a pension, employees hired after November 1st would instead receive matching contributions to a 401(k) account. The new contract would have expanded the a two-tier system from a previous agreement that the union had made with the company in 1997 that saw new hires receiving lower pay and benefits.

After the rejection vote, the workers set a deadline of 11:59 p.m. on October 13th for a counteroffer, after which they would go on strike. Regarding the proposal's rejection, several union members criticized the concessions that the union had made in previous contract renewals in 1997 and 2015. In 2015, the contract proposal barely passed by about 200 votes following several rounds of layoffs. However, while these contracts had been negotiated during difficult financial times for the company, 2021 was a profitable year for John Deere, with revenue up 11 percent and net income up 84 percent compared to the previous year. Fiscal year 2021 profit estimates were totaling a record $6 billion. In addition, workers expressed dissatisfaction with work schedules during the COVID-19 pandemic, with many working 10 to 12 hours per day and on weekends. One worker, speaking to The Guardian, stated, "It goes way deeper than just not liking a contract. It’s the summation of years of negative wage movement and probably would’ve happened last contract had the layoff situation not happened." On October 13th, the day before the strike was set to commence, multiple John Deere facilities told workers not to come to work for their shifts in preparation for the impending strike.

As the deadline for reaching an agreement passed with no new contract proposal, the workers went on strike on October 14, 2021. The strike would be the first at John Deere since a 163-day one in 1986 and would be the largest private-sector strike in the United States since a UAW-led strike at General Motors in 2019. At the distribution center in Milan, Illinois, strikers almost immediately began picketing, and UAW President Ray Curry voiced his support for the strike, saying, "The almost one million UAW retirees and active members stand in solidarity with the striking UAW members at John Deere." For the duration of the strike, the union members received a weekly strike pay of $275 from the UAW. At the Ottumwa, Iowa plant, picketers convinced a semi-trailer truck delivery driver to turn around, with reports of similar events at the Davenport and Dubuque, Iowa plants. A company spokesperson said that they were looking to resolve the strike and stated, "Our immediate concern is meeting the needs of our customers, who work in time-sensitive and critical industries such as agriculture and construction". The company also stated that they would continue manufacturing operations for the duration of the strike. Speaking about the strike, economist Dave Swenson of Iowa State University stated that John Deere's increased sales in 2021 could allow them to meet some of the union members' demands, saying, "They can afford to settle this thing on much more agreeable terms to the union and still maintain really strong profitability." Other economists predicted that the strike may not last long given the high demand for agricultural equipment and a well-performing agricultural sector. Shortly after the strike began, many elected officials and candidates in the Iowa Democratic Party voiced their support for the strikers. Additionally, Iowa Governor Kim Reynolds stated that she hoped that John Deere and the UAW could come to an agreement soon.

On October 16th, KWQC-TV reported that many small businesses in the Quad Cities area, home of several John Deere facilities, were offering discounts and free food for strikers. On October 17th, the Associated Press reported that some agricultural groups and businesses associated with John Deere were concerned about the effects of a lengthy strike, and the president of the Iowa Corn Growers Association stated that a shortage of John Deere parts could significantly impact farmers' harvests. After briefly pausing negotiations after the strike commencement, Deere and UAW officials resumed deliberations on October 18th. October 20th brought a decision from an Iowa court with Deere winning an injunction against strikers for blocking plant entrances. Court ruling limited the number of picketers and fire barrels at strike locations. The 20th also witnessed a visit to picketers in Des Moines, IA by former Iowa governor and current U.S. Secretary of Agriculture Tom Vilsack. Vilsack voiced hope for productive negotiations and stated willingness to meet with Deere officials to resolve the dispute. Several days later, on October 22nd, ABC News reported that a GoFundMe campaign organized to help the strikers had accumulated more than $80,000 in donations from over 2,000 donors over a four-day period. On the morning of October 27th, a striking worker who was reporting to the picket line outside the Milan plant was killed in a traffic accident outside the facility. Following the incident, UAW president Curry stated that the striker had "made the ultimate sacrifice in reporting to picket for a better life for his family and coworkers" and ordered the UAW flag to fly at half-staff for the day.

November 2021
Following a new proposal by Deere on November 1st that offered 10-12% immediate raises, pension retirement options for new hires, and enhanced retirement packages for all workers, workers rejected the second offering by a 55-45% margin on November 2nd. After the rejection vote, a Deere official said on November 3rd that no additional incentives would be included and that the contract offering was the last, best and final offering. November 12th brought the announcement of a third contract proposal, endorsed by both company and UAW officials. A November 17th vote by workers passed the offer by a 61-39% count; workers returned to work at all John Deere sites affected by the strike on November 18th.

Final Contract Agreement and Implications
The accepted deal will boost worker pay over a period of six years, with a 10% increase in the first year, followed by a 5% increase in the contract's third and fifth years. Additionally, workers will receive an $8,500 signing bonus and a revamped bonus structure for workers meeting and exceeding production targets. The company itself expects that the deal would cost $3.5 billion over the six-year life of the agreement. Investment bank William Blair & Company estimated that the strike likely reduced Deere's output by between 10 and 15% for the fourth quarter of 2021 and the first quarter of 2022. The strike is expected to lead to an increase in the already-inflated auction prices of used Deere equipment such as tractors and other used agricultural machines. JP Morgan machinery analyst Ann Duignan predicts increased labor costs will prompt Deere to push a 1.5% increase in the price of new equipment.