There’s a lot of excitement, at least among those of the pro-worker persuasion, about employees rejecting poorly paid jobs and oppressive bosses via not taking up open positions or demanding change via strikes. A partial list: Volvo. Kellogg’s. Frito-Lay. Nabisco. Alabama coal miners. Health care staffers in New York and Massachusetts, along with bus drivers and telecom workers. Even though they are highly visible signs that the serfs are rebelling, these labor actions are still a strong of one offs, By contrast, the pending strike at John Deere has the potential to be a turning point, a seminal event on the order of Reagan breaking the air traffic controllers’ union.
The reason the John Deere strike could be a turning point, as we’ll explain further, is that the workers there hold an exceptionally strong set of cards, the most important being a hefty strike fund and many if not most workers also having ample savings. By contrast, Deere is plenty vulnerable.
But first we’ll take a mini detour to explain how rule by extractive MBAs has so hollowed out companies that the combination of Covid-induced supply chain stresses and uppity workers is more than their fragile operations can readily tolerate.
The press, reflecting the attitude of managers and businesses owners that there were no limits as to howm uch they could squeeze workers, has been agog with spectacle of supposedly all-powerful employers no longer holding the whip hand. This is a system that requires most people to sell their labor as a condition of survival. How could employers not have the upper hand? Powerful unions are as antique as lava lamps, and about as common.
Of course, it was their own arrogance and short-sightedness that set the groundworks for this reversal. Just-in-time operations management, using technology to micro-manage and push employees to unrealistic timetables, reducing staffing and demanding workers take up the slack for no more pay, all were key elements in over-optimizing large swathes of commercial activity and making them vulnerable to shock. We included it in Links yesterday, but this tweetstorm describes how the problem businesses face may not even be solvable by higher pay, that they’ve created a system that was already pushing lower-level employees too hard and Covid has increased the demands. The employer winds up with worker churn, forcing lots of overtime on new hires as soon as they are trained, and many quit. Do read the entire tweetstorm if you haven’t already”
So. Labor shortage discourse time!
I work for a food manufacturing company (specifically bottling/canning various beverages)
We are desperately under staffed.
The wages are competitive, but they can't keep anyone on after they hire them.
Why? Because since we're short
— The Violet Wanderers (Spooky Ghost edition) (@VioletWanderers) October 14, 2021
In this case, the company can’t readily reconfigure the business (like creating bigger inventories) so as to create more slack for workers. It isn’t simply that the perceived profit requirements argue against it. It would require multiple coordinated operational changes. It’s unlikely that current management could execute them successfully even if they bought into their necessity. And screwing up on an exercise like that could be a death sentence for the operation. Better to keep trying to bail out a leaky boat and hope that the Covid storm will abate soon enough to stop water from sloshing in over the transom too.
On the other end of the spectrum are overbearing managers who even if they aren’t in Covid-pummeled operations, are learning that they can no longer mistreat underlings. This exchange posted on Reddit (hat tip drumlin woodchuckles) is priceless.
Now to Deere. Deere is oddly acting as if it needs to win some sort of popularity contest, when what matters is getting on a better footing with plant workers. A Deere PR salvo succeeded in getting the Washington Post to act as its mouthpiece in misrepresenting worker earnings at $60,000. They are actually typically $40,000. The biggest lie Deere told in coming up with this figure is acting as if its factory hands work 2200 hours a year. They never do due to regular and long shutdowns.
Jalopnik described how Deere plays games with mainly unattainable incentives, much like the driver who hangs a carrot in front of his horse, just out of reach:
Deere did hedge that the wage figures it released were based on “CIPP 120 percent.” CIPP stands for Continuous Improvement Pay Plan, which is a team-based incentive pay program that only sees workers gaining wages based on an entire department’s productivity when compared to quotas set by the company.
The quota is upped every six months, Furman reports, whether or not those quotas have been met. And even if you do get close — by hitting 115 percent of your CIPP quota — your money doesn’t go to you. It goes into a reserve fund. If your department doesn’t hit quota six months from now, Deere can take money out of that reserve fund. And if you’re a low-level employee, you’re not getting CIPP money at all.
(And yes, when pandemic-related supply chain issues slowed down production causing many to miss CIPP targets, Deere didn’t budge, and workers lost pay.)
Lambert set forth management’s weaknesses in 10,000 John Deere Workers Reject Contract, Strike 14 Plants. I suggest you read/reread the full post. One important bit of backstory is that Deere has a two-tier pension, with employees who joined after 1997 accruing benefits at 1/3 of the former rate; those who joined after November 1 this year were to get no pension at all. Many of the workers are children of current or recent employees and resent being shafted as Deere profits hit new highs. And of course the CEO makes ginormous pay as the workers are treated shabbily on a day to day basis, including not having taking Covid risk recognized, let alone rewarded.
Key points of leverage, from Lambert (#1 was not specific to Deere):
2) Harvesting timing. From Bloomberg:
The timing of the strike is also significant. It’s coming in the middle of the North American harvest. While that is a period of weaker production for Deere, it could disrupt the harvest if farmers experience equipment breakdowns and Deere is unable to respond speedily. A work stoppage beyond a few days may make it tougher to get hold of replacement parts if equipment breaks during the harvest, according to Brian Strasser, a manager at Sinclair Tractor in Kalona, Iowa.
(Note that John Deere viciously engineers its machines so that “owners” have no right to repair, so the farmer can’t repair the tractor themselves. Only Deere can.)
3) Manufacturing timing.
"…and managers who have never held a wrench in their lives will be trying to weld assemblies. I'll be trying to find out which serial number ranges are built in that time, so I can tell farmers I know which machines to avoid."
— Jonah Furman (@JonahFurman) October 14, 2021
Of course, Deere can always try to hire scabs, but it sounds, again, like Boeing is far ahead of Deere in deskilling its workforce.)
4) Supply chain timing. From AP:
[Iowa State University economist Dave Swenson] said the impact of the strike could spread further if companies that supply Deere factories have to begin laying off workers. So Deere will face pressure from suppliers and from customers who need parts for their Deere equipment to settle the strike quickly. And Swenson said Deere will be worried about losing market share if farmers decide to buy from other companies this fall.
“There is going to be a lot of pressure on Deere to move closer to the union’s demands,” Swenson said.
Deere white collar workers will attempt to run the plants. Will anyone have to use a forklift?
Mind you, this sort of thing happens so often that YouTube has a big collection of forklift accident videos, including compilations. The one above isn’t the best, just one of the shortest, to demonstrate the point.
As some Twitterati pointed out, no one with an operating brain cell will want to buy a Deere product made while the regular workers are striking. So even if Deere can keep its factories kinda-sorta operating, they could see a hit to orders until buyers are sure the strike-period product has been exhausted.
The other big advantage the union has is ample resources. From TroyIA in comments:
It’s like everything John Deere has done to increase its stock price is now a liability. Squeezing it’s workers by cutting their wages and benefits so the company is no longer competitive in the labor market causing a labor shortage. (And no those poor salary workers won’t be building machines because who will do their job while they are doing the wage workers job.)
Outsourcing any job they could so now they are at the mercy of their suppliers and the accompanying supply chain disaster leading to delays and incomplete machines.
Lean manufacturing that only served to eliminate any hope of adapting to changing circumstances. Because extra space and extra time is considered waste the factories are set up to produce a certain number of machines per day.
From the tweet above the start date is November 15th because any later than that and orders will have to be canceled. For example even working 24 hours a day the factory can only produce 50 machines per day so they can’t restart in January and build 65 machines a day to catch up.
Add in the highly cyclical nature of the ag industry which is in an up cycle so John Deere needs to sell as much machinery right now all of which has led to the workers having leverage during contract negotiations for the first time in a generation.
We all collectively realize that if we are ever going to fight to improve the conditions for ourselves and future workers it’s now or never. And it was pretty clearly communicated to UAW International we are willing to strike and sacrifice to get what we deserve and if they are unable to be as committed as we are then they could go back to Detroit and we’ll negotiate ourselves.
Anyway I’ve got picket duty next week….since we haven’t striked in 35 years our strike fund is well funded. Also due to supply chain issues, labor shortages from an inability to hire enough workers and COVID-19 rules we have been working 50-60 hours per week since this spring. It was well understood on the shop floor that everyone should be stocking away their extra overtime earnings in their own individual strike funds. In the worst case scenario we can also find employment because everyone is hiring oftentimes at the same pay level as Deere. Hell I can even stock the beer cooler the local gas station for $15 an hour if needed.
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The union’s ability to hang tough is an overwhelming advantage. As Lambert’s earlier report showed, more than a few days of work stoppage will hurt spare parts supplies, inconveniencing and angering customers. The longer a strike goes, the more it will damage suppliers. And Deere will be desperate to get a new deal in place before November 15.
Even though the rank and file are at risk of leadership being too craven, there’s an unusual amount of solidarity among Deere workers. The leadership has to recognize they are at risk of having a deal voted down.
Deere is already reverberating through the union world…and speaking of a tentative deal being nixed by the membership, that may be the result for the tentative movie worker agreement, widely depicted by the press as settled. From Mike Elk:
Yesterday the leadership of IATSE announced that they had reached a tentative agreement with the Alliance of Motion Picture and Television Producers (AMPTP) that will avert a potential strike set to begin at midnight tonight.
However, it is unclear if the membership will vote to reject the deal and strike anyhow. Earlier this month, over 10,000 John Deere workers, members of the UAW, had already decided to strike against the advice of the UAW’s leadership and reject a proposed tentative agreement, inspiring many IATSE members to contemplate a similar course of action.
The tentative agreement announced late Sunday night contains many improvements over current measures. However, it is still controversial due to provisions that will still require workers to work 14-16 hours shifts in the film and television industry. In addition, the tentative agreement contains no concessions on health care nor retirement, while IATSE says the deal provides a significant wage increase for some of its lowest-paid members.
Even though labor and unions have the wind at their backs, unions have been under attack for so long, with only lip service from the Democratic party, that they have a very long road back to anything resembling their former clout. However, the Black Plague fundamentally restructured relationships between working men, particularly craftsmen, and landowners. While Covid is nowehre near as deadly, as we pointed out above, too-clever executives have created fragile and tightly coupled systems which make them extremely vulnerable to labor demands when other inputs are stressed.
A Wall Street Journal story on labor’s newfound assertiveness has a whistling in the dark sound to it even as it acknowledges that unions are seeing a big upsurge in popularity:
Union members made up 10.8% of the U.S. workforce last year, a higher proportion than in 2019, but down from a peak of 20.1% in 1983, the earliest year for which the Labor Department has comparable data.
Labor leaders said now is a time to build their ranks due to worker shortages, the pandemic struggles and because a pro-labor president is in the White House. Rob Hill, vice president and organizing director of the Service Employees International Union 32BJ, which represents janitors and airport workers, said he expects the roughly 175,000-member union this year to sign up double the number of new members than it did in 2020, which was around 4,000. Concerns over compensation, healthcare coverage and paid time off are drawing more workers’ interest in the union, he said.
The Teamsters union said it is fielding an unprecedented volume of requests to form unions at workplaces around the country…
Jonas Loeb, communications director for the 150,000-member International Alliance of Theatrical Stage Employees, said that union is actively recruiting live-events workers across the country…
Unions have argued that their membership ranks would be boosted if current labor laws were revised to more severely punish employers who unlawfully thwart organizing efforts…
Some union officials and labor researchers said there is an emotional component wrapped up in current union actions. Frustration remains among some workers over being required to work long hours through the pandemic, they said, and a sense of injustice as some companies reap big profits from a rebounding economy.
Needless to say, even though these fights are important due to their number and their departure from decades of decline, they may still not achieve lasting change. Struggles to advance the rights of workers have required sustained effort in order to achieve lasting gains. So strikes like the ones at Deere are at best skirmishes at the start of a long campaign.