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John Deere Says Contract That Workers Rejected Was Its Final Offer

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One day after workers at the agriculture equipment maker Deere & Company voted down a second contract proposal, the company said Wednesday that the proposal was its best and final offer and that it had no plans to resume bargaining.The rejection of the contract by roughly 10,000 workers extended a strike that began in mid-October, after workers based primarily in Iowa and Illinois voted down an earlier agreement negotiated by the United Automobile Workers union.The company confirmed its position in an email after it was reported by Bloomberg. A U.A.W. spokesman said only that the union’s negotiating team was continuing “to discuss next steps.”Marc A. Howze, a senior Deere official, said in a statement Tuesday night that the agreement would have included an investment of “an additional $3.5 billion in our employees, and by extension, our communities.”“With the rejection of the agreement covering our Midwest facilities, we will execute the next phase of our Customer Service Continuation Plan,” the statement continued, alluding to Deere’s use of salaried employees to run facilities where workers are striking.Many workers had complained that wage increases and retirement benefits included in the initial proposal were too weak given that the company — known for its distinctive green-and-yellow John Deere products — was on pace for a record of nearly $6 billion in annual profits.According to a summary produced by the union, wage increases under the more recent proposal would have been 10 percent this year and 5 percent in the third and fifth years. During each of the even years of the six-year contract, employees would have received lump-sum payments equivalent to 3 percent of their annual pay.That was up from earlier proposed wage increases of 5 or 6 percent this year, depending on a worker’s labor grade, and 3 percent in 2023 and 2025.The more recent proposal also included traditional pension benefits for future employees and a post-retirement health care fund seeded by $2,000 per year of service, neither of which were included in the initial agreement.Chris Laursen, a worker at a John Deere plant in Ottumwa, Iowa, who was president of his local there until recently, said he voted in favor of the new agreement after voting to reject the previous one.“We have the support of the community, we have the support of workers all around the country,” Mr. Laursen said. “If we turned down a 20 percent increase over a six-year period, substantial gains to our pension plan, I’m afraid we would lose that.”But Mr. Laursen said he still had concerns about the vagueness of the company’s commitment to improving its worker incentive plan, and such concerns appeared to weigh on his co-workers, 55 percent of whom voted to reject the newer contract.Another Iowa-based worker, Matt Pickrell, said that some co-workers skeptical of the second proposal had expressed a desire for a larger initial increase than the 10 percent the company offered.Mr. Pickrell said that he, too, had opposed the initial agreement but had voted in favor of the more recent one because of the improvements in retirement benefits.Larry Cohen, a former president of the Communications Workers of America, said the second “no” vote could indicate that members felt that the strike was working and that further gains were possible, despite the company’s declaration that it was finished bargaining.“They’re saying what they believe — their feelings are hurt,” Mr. Cohen said of Deere. “But what are they going to do about it? They’re not going to get the workers back.”Mr. Cohen said that Deere employees were among the relatively rare group of workers in the United States able to bargain on a companywide scale and that that, along with their stature in the communities where plants are situated, gave them considerable leverage.The work stoppage at Deere was part of an uptick in strikes around the country last month that also included more than 1,000 workers at Kellogg and more than 2,000 hospital workers in upstate New York.Overall, more than 25,000 workers walked off the job in October, versus an average of about 10,000 in each of the previous three months, according to data collected by researchers at Cornell University. More

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    John Deere Workers Strike After Failed Contract Talks

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    About 10,000 unionized employees walked out, as worker activism rises during nationwide labor shortages.Employees of Deere & Company formed picket lines after some 10,000 unionized workers went on strike to demand better pay and benefits at a time when the agriculture equipment maker was on track for a year of record profits.Meg Mclaughlin/Quad City Times, via Associated PressSome 10,000 unionized workers at the agriculture equipment maker Deere & Company went on strike early Thursday after overwhelmingly rejecting a contract proposal worked out with the company by negotiators for the United Automobile Workers union.“Our members at John Deere strike for the ability to earn a decent living, retire with dignity and establish fair work rules,” Chuck Browning, the director of the union’s agricultural department, said in a statement. “We stay committed to bargaining until our members’ goals are achieved.”Deere said it was “determined to reach an agreement” that would benefit workers. “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,” Brad Morris, the company’s vice president for labor relations, said in a statement.The strike deadline was announced on Sunday after the union said its members had voted down the tentative agreement reached on Oct. 1 with the company, which makes the John Deere brand of tractors. Union negotiators had said the proposal would provide “significant economic gains” and “the highest-quality health care benefits in the industry.”But workers, who are spread out across 14 facilities, primarily in Iowa and Illinois, criticized the deal for insufficiently increasing wages, for denying a traditional pension to new employees and for failing to substantially improve an incentive program that they consider stingy.“We’ve never had the deck stacked in our advantage the way it is now,” said Chris Laursen, a worker at a John Deere plant in Ottumwa, Iowa, who was president of his local there until recently.Mr. Laursen cited several sources of leverage for workers: the profitability of Deere & Company — which is on a pace to set a record of nearly $6 billion this fiscal year — as well as relatively high agricultural commodity prices and supply-chain bottlenecks resulting from the pandemic.“The company is reaping such rewards, but we’re fighting over crumbs here,” he said.Deere, long known to farmers for its green-and-yellow product line, is a publicly traded company valued at more than $100 billion. After a brief plunge early in the pandemic, its shares have tripled, far outpacing the overall market. They rose slightly on Thursday.Steve Volkmann, an analyst with the investment bank Jefferies, acknowledged that Deere was doing well. “Crop prices have increased with every other commodity,” he said, “and when farmers make money, they tend to buy equipment.” And he said Deere’s leadership in agricultural technology had helped make it more profitable.Mr. Volkmann said the financial damage from the labor dispute, if it was settled quickly, would be limited. The company’s bigger challenge, he said, comes from the pandemic’s disruption to the worldwide supply chain, which has caused shortages and raised prices for some components.“Deere is already under some stress,” he said. “They’re not producing at full capacity anyway — they just don’t have the parts.”As many employers grapple with worker shortages, workers across the country appear more willing to undertake strikes and other labor actions.Last week, more than 1,000 workers at Kellogg, the cereal maker, went on strike, and Mondelez International, which makes Oreos and other Nabisco snacks, experienced a work stoppage this summer. Coal miners in Alabama have been on strike for months. Workers have also waged prominent union campaigns at Amazon and Starbucks.Those on strike elsewhere in the country have raised similar complaints as the Deere employees, pointing out that they put in long hours as essential workers during the pandemic but are not sharing much of the profits that their companies reaped during that time.“There was no reprieve — everyone was working seven days a week,” said Dan Osborn, the president of a Kellogg workers local in Omaha.Mr. Osborn said his members were upset over a two-tier compensation system that they worry puts downward pressure on the wages and benefits of veteran workers. “Divide and conquer, it’s an age-old adage,” he said.The Facebook pages of some U.A.W. locals on Thursday encouraged workers to turn out for picketing, which one said would qualify them for strike pay and health insurance.Union members at General Motors walked off the job for almost six weeks in 2019 before agreeing to a four-year contract that included substantial wage increases and closed disparities in a two-tier wage structure.Under the tentative deal at Deere, wages would have increased 5 or 6 percent this year, depending on a worker’s pay grade, and then an additional 3 percent each in 2023 and 2025.Pension benefits would have increased but would have remained substantially lower for workers hired after 1997, and many workers were disappointed to see benefits eliminated for new hires, Mr. Laursen said.Other workers are perturbed about the lack of health care benefits for retirees, which also ceased for workers hired after 1997.Analysts suggested that Deere might be wary of taking on additional long-term obligations because its current level of profitability is unlikely to last.“It’s a very cyclical business,” said Ann Duignan, an analyst with J.P. Morgan. “They may be having record profits this year, but we believe we are close to a peak.”Many workers were frustrated with similar elements of the last contract that the union negotiated with Deere, in 2015, and had been anticipating a showdown ever since.“I’ve been saving since the last contract,” said Toby Munley, a Deere electrician in Ottumwa, where U.A.W. members voted to reject the previous contract, as did another local in Iowa. “People were feeling it then.” That contract was narrowly approved overall.Looming over the negotiation is suspicion among rank-and-file workers toward the international union after a series of scandals in recent years involving corruption in the union and illegal payoffs to union officials from executives at the company then known as Fiat Chrysler.The scandals led to more than 15 convictions, including those of two recent U.A.W. presidents.Mr. Munley said he had worried that the U.A.W. would try to negotiate a marginally better deal and sell the membership on it before the strike deadline Wednesday night, but said he was encouraged that the union had held firm.“I was happy to see we didn’t come back with a tentative agreement,” he said. “It restored some of my faith in my international.”Nelson D. Schwartz More