Deere Union Members Reject Second Management Offer; Key Demands Include Greater Workplace Say

Deere workers are standing firm in their demands not just for better pay, but also for improved workplace conditions. Deere union members in 12 plants voted down management’s second offer; employees in two other plants under a different contract agreed to the same terms that the bulk of Deere workers rejected, 55% to 45%. From the Wall Street Journal:

The proposal for a new six-year contract…would have given more than 10,000 Deere workers on strike an immediate 10% pay raise and an $8,500 bonus for each worker if the deal had been ratified Tuesday. The company also offered 5% raises in 2023 and 2025. For the other three years of the contract, Deere employees would receive lump-sum bonuses amounting to 3% of their pay…

Deere also agreed to provide lump-sum bonuses to employees’ pensions and backed off an earlier attempt to enroll future employees in a 401(k)-style pension program. In the future, new Deere hires would have had a choice of enrolling in the company’s traditional pension program for hourly workers that guarantees income levels or the 401(k).

The fact that the union rejected a deal with what on the surface are big increases points to how much simmering resentment Deere has generated over now decades via too clever “heads I win, tails you lose” incentive pay schemes and shoddy management treatment of employees, contrasted with Deere’s skyrocketing profits and executive pay. It can’t have been lost on line workers that Deere’s profits last year equalled, per employee, their total wage compensation. Profits absent a more equitable deal with labor should be even higher. It’s obvious that Deere can pay more but chose not to.

Before the strike, the Guardian, in a story Lambert highlighted, pointed to the long history of Deere workers seeing how management shaved their pay to pad their and shareholder wallets:

David Schmelzer, a quality control inspector at John Deere in Milan, Illinois for 24 years and former chairman of UAW Local 79, said that in 1997 workers took several concessions from John Deere in contract negotiations at the time, which included creating a two-tier system of employees, with workers hired after 1997 receiving fewer benefits.

“We sacrificed, and we want that back now,” said Schmelzer. During the pandemic, Schmelzer said workers have been forced to work overtime consistently, with 10- to 12-hour days through the week and Saturdays.

Through that time, John Deere has reported record profits in 2021, with a $4.7bn profit in the first three quarters of this year, compared to their previous record profit year of $3.5bn in 2013. The company spent over $1.7bn on stock buybacks in the first nine months and paid out $761m in dividends to shareholders.

“A lot of what’s been going on in the country over the last couple of years has definitely made people more aware of the disparity between corporate and income inequality. Just massive amounts of corporate greed,” added Schmelzer. “The majority of people want a bigger share of the success of this company, the success that we’ve been a major part of.”

A point that might be lost on non-hourly workers: regularly requiring factory staffers to do successive >8 hour shifts is a classic management tactic to drive out older workers, who are at higher wage rates, who just can’t take the physical demands.

Contrast that picture with the new story from the Journal:

Deere’s sales through the first three quarters of its current fiscal year increased 27% from last year, and net income more than doubled to $4.7 billion. For the full year, Deere expects to earn about $5.8 billion.

Perhaps as important, management didn’t concede enough to union demands for improved conditions and better healthcare. That is mentioned only in passing in the Journal:

Union members have been urging their negotiators to broaden the scope of the bargaining to include work rules, scheduling and other compensation that workers say have eroded in recent years and weren’t adequately addressed in the failed proposals.

The US press has chosen to avert its eyes from the sour relationship between Deere management and front line employees. Back to the Guardian:

“This goes beyond numbers. It’s just as much about how people are treated,” said a John Deere employee in Illinois who requested to remain anonymous for fear of retaliation. “Respect from management no longer exists. You can feel the tension in the air. Everybody has been on edge for quite some time. Nearly every day, I would lift my weld hood up to hear employees and managers screaming at each other. They have put highly paid managers on certain operators to watch them and just bird dog them all day.”

As we’ve chronicled, including one from Deere union member TroyIA, striking Deere workers have tremendous leverage in contract negotiations by virtue of having a large strike fund and Deere workers having been able to save a lot due to all that overtime. By contrast, the strike may already be in the terrain of costing Deere orders for the next year:

The fact that the Deere offer included a bribe of $8500 per worker for ratification by next Tuesday confirms its eagerness to get the factories back on line.

We said that the Deere strike could be a turning point for labor and so far that is panning out.

Wish Deere workers the best. The time is long overdue for executive and top manager rent extraction to be reined in.

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  1. Alice X

    American unions have long lonely sought to carve out a bigger slice of the same capitalist pie. There is no production save the fruits of the earth and the labor that brings it forth. Were all labor to be united, the system could be stood on its head, as it should be. These demands appear to be a step in the right direction but alas, they are lonely, hopefully there is more to come. Management and its profiteers should be subservient to labor as they would collapse absent that labor.

    1. Alice X

      What I am getting at is somewhat akin to what the I.W.W. was about before Wilson’s great subversion circa WWI. That tyrant.

  2. Jackiebass63

    I read an interview with a J.D. worker. He said even though there were big wage increases, they weren’t enough. Especially for workers in the lower tier of the wage system. He said his father was a retired J.D. worker. His fathers hourly wage when he retired was more than any present J.D. employee makes today. That tells me a lot. Businesses have been depressing wages for decades while raking in record profits. This is one example of what Neolibersim did to working people.

  3. The Rev Kev

    Do the negotiators for John Deere really have an idea of what is happening on the factory floor? I suspect that they don’t. Perhaps those unions negotiators should demonstrate to the John Deere negotiators what sort of conditions that they work under but giving that team a heads up first. So the union negotiators would bring in a ‘supervisor’ team to watch the John Deere negotiators and every time they make a mistake, have one of these ‘supervisors’ start shouting at the John Deere negotiator. To add stress, the union negotiators would assign one of these ‘supervisors’ to one of the John Deere negotiators to bird dog him and watch everything that he does so that he could be ready to shout at him. Let the John Deere team have an idea of the conditions that they work under and ask the John Deere negotiators if they would be able to work negotiating under such ‘management.’ Worth a try.

    1. Big River Bandido

      The negotiators for John Deere are the UAW international, based in a fine, expensive building in Detroit, with a gargantuan strike fund and thousands of employees who are bureaucrats, better-paid than and far removed from the workers they claim to represent. (From that strike fund, the UAW is doling out checks to workers for $275.) I don’t know what the UAW president makes, but the national president of the American Federation of Teachers, Randi Weingarten, makes $350,000/year, according to WSWS. I don’t know any teacher who makes anywhere close to that.

      Did I mention that the last TWO Presidents of the UAW have been sent to prison on corruption charges? And that, like a lot of unions in this country, rank-and-file members of the UAW never get a voice in the selection of their own state and local leaders.

      The UAW negotiators already came back with a first offer, weeks ago. The rank and file rejected it almost unanimously. Based on what we saw with the DANA strike in Indiana and the Volvo strike earlier this year — it’s clear that the Deere workers are opposed not only by the company, but by their own “company union”.

      This pattern of “capture” is the same pattern we see in one industry after another — it is certainly endemic in education. I’m a nominal member of the American Federation of Teachers, a profoundly anti-democratic organization which uses its dues money and its political power to *tamp down* labor unrest rather than giving voice and power to it.

      Enrolling more American workers in unions will not improve the lives of workers until the workers take back the control of their own unions.

  4. Dave in Austin

    The workers seem to have a different opinion on future inflation than the Fed does. Promises for 2023 and 2025 wages should be based on BLS inflation numbers …. + the inflation in housing and energy prices, which are somehow deemed “non-core”.

  5. James Simpson

    Neither for its workers nor its customers does John Deere give a damn.

    John Deere Just Swindled Farmers out of Their Right to Repair

    The California Farm Bureau has given away the right of farmers to fix their equipment without going through a dealer.

    THE FIGHT FOR our right to repair the stuff we own has suffered a huge setback.
    As anyone who repairs electronics knows, keeping a device in working order often means fixing both its hardware and software. But a big California farmers’ lobbying group just blithely signed away farmers’ right to access or modify the source code of any farm equipment software. As an organization representing 2.5 million California agriculture jobs, the California Farm Bureau gave up the right to purchase repair parts without going through a dealer. Farmers can’t change engine settings, can’t retrofit old equipment with new features, and can’t modify their tractors to meet new environmental standards on their own. Worse, the lobbyists are calling it a victory.

    The ability to maintain their own equipment is a big deal to farmers. When it’s harvest time and the combine goes kaput, they can’t wait several days for John Deere to send out a repair technician. Plus, farmers are a pretty handy bunch. They’ve been fixing their own equipment forever. Why spend thousands of dollars on an easy fix? But as agricultural equipment gets more and more sophisticated and electronic, the tools needed to repair equipment are increasingly out of reach of the people who rely on it most. That’s amplified by the fact that John Deere (and the other equipment companies represented by the Far West Equipment Dealers Association) have been exploiting copyright laws to lock farmers out of their own stuff.

    1. furiouscalves

      I feel like this is just some hip CA people that act like this is an outrage. What farmer can repair software in the field? This whole thing is just using farmers to try to prove this point of “open source good, black box bad”. The reality is that basically no farmer can reprogram software in his field. re-soldering a circuit board is also not like replacing a belt or even fabricating a metal part to reinforce or fix a broken or worn-out piece.

      Also, Deere has reason to protect it’s computer systems. They are way ahead of car makers/google and such with autonomous vehicles in practice. it is what is happening right now and has been very successful. Any new combine is autonomous and a farmer can’t fix it.

      People aren’t talking about the fact Deere did a big reorg that was timed very poorly with covid so there is more dysfunction on the salary/ management class. less people took early retirements and there was more layoffs because of it. Lots of jockeying for position/hiding out and doing nothing and lots of exposed middle managers with no value to add. Bonuses are expected yearly and generous for higher labor grades, so the cash they offered is a start to recognize labor contributions. I think the pension is going to be the place the union might be going too far. they should focus on wages, since no company can or will support the future fixed liabilities.

      1. Glen

        You have obviously never worked with a farm kid who became an engineer, or kept up on the whole underground industry out there to replace/reprogram engine controllers in cars, trucks, vehicles of all sorts. It’s not just a pipe dream – it’s being done all the time, and that’s why Deere is so afraid.

        1. Lambert Strether

          > the whole underground industry out there to replace/reprogram engine controllers in cars, trucks, vehicles of all sorts.

          If any readers can point us to sites covering this topic, that would be great. Or if you have contacts, email us (in complete confidence :-)

            1. ChrisPacific

              There’s apparently even a github page dedicated to ‘hacking’ (i.e., reverse engineering) the John Deere firmware and communication codes. It is quite open about its purpose, and explicitly quotes the DCMA exemption mentioned in the second article as a legal basis. I found this article from a few years ago that goes into the issues in more detail, including the legal factors in play.

              ‘Farmers repairing software in the field’ is a strawman. Sure, no farmer is going to wipe the mud off a USB port and start rewriting the software on the fly, just like no developer is going to jump into a production system and start changing bytecode, but the local repair shop can and should be empowered to diagnose and fix the embedded software as well as the hardware. Maybe it’s reasonable to have proprietary licensing for complex elements like autonomous control systems, but it would be quite possible to have a simple, low level control layer that supported switching the machine on and basic operations, and to have separate service agreements for the two. If, of course, John Deere wanted to. History suggests that they won’t unless they are forced – Microsoft might position itself as a champion of public APIs and open software these days, but it took decades for them to get there, and they had to be dragged kicking and screaming all the way.

              (Wow, that passed the filter even with an embedded link. I’m astonished.)

          1. Glen

            I think this is a very fair video covering the issues with right to repair and John Deere:

            Farmers Are Hacking Their Tractors Because of a Repair Ban – Vice

            You need to realize this fight is not new, very similar situations existed in the auto industry and there was a big fight to ensure that information was available to do repairs, use non-OEM parts, etc. It just preceded using software to up the complexity, and now people act like “oh, well, software, that’s a pretty unicorn butterfly precious – precious special – special” which is of course, complete BS.

            But now with “the Internet of Things” the complete level of crapidity can advance by leaps and bounds. Here’s some examples that resonant more with average people:

            No ink, no scan: Canon USA printers hit with class-action suit
            Canon all in one printers with scanners will not let the scanner work if ink cartridges are not installed.

            HP Ink becomes unusable when subscription ends; thoughts on this business model?
            HP printers using a ink subscription become unusable when non-subscription cartridges are installed.

            And my personal favorite – the safety device that will not work if a payment is missed:

            Do You Really Own It? Motorcycle Airbag Requires Additional Purchase To Inflate

            Thought that thing was going to save your life? Sorry, our billing system had a glitch – you’re dead.

            And you’d better believe every new expensive John Deere has a satellite link, and they can activate and deactivate anything they want. But typically for farmer repair-ability, it’s just farmers that want to keep their old stuff running.

            See why I was insistent that my new Ford F-150 not come with a built in cell phone link?

        2. Furiouscalves

          I have a sister at Deere working on autonomous vehicles and usability studies on the farmers using this tech. Eye tracking studies, turn efficiency, Speed and size limits of planters etc. pretty sure that hacking a half million dollar tool isn’t a high frequency occurrence, especially at harvest.
          I also ran a Midwest vineyard with a hobby farmer that had “A very active machine shop”. Fixing old stuff was probably valued higher than yield or hours In The field cause it was fun to them. It wasn’t the basis of business. Especially after your real work Monday nights.

          Those links are pretty old news.

  6. flora

    Thanks for this post. Just guessing here: if the first contract offer was ridiculously low, this second offer ( which sounds like a big improvement in theory) makes me think Deere still has more and better they can offer in a contract and both mgmt and workers will do well. This is interesting to follow. Thanks.

    adding: don’t know how Deere co pensions are structured, but in a defined benefit plan the payout is calculated on final avg salary for last x years. Bonuses usually aren’t part of salary calc, and so don’t affect pension calc. Bonuses are nice but no substitute for better salaries. my 2 cents.

  7. JEHR

    I wish the best for the Deere employees in the US. We, in the small province of New Brunswick, have a strike (and lockout) ongoing in which the premier (a conservative) has taken a leading role rather than using negotiators that usually make agreements with the workers. The public at large is in favour of this strike action as NB workers have had their pay and wages stagnate over the past 20 or so years. Even the union leaders are less than supportive of the workers. The premier would also like the workers to change from a defined benefit pension plan to a shared-risk pension plan at the same time. It takes a pandemic to reveal what our leaders really stand for. The linked article pretty well sums up the problems with our present government in this province.

  8. BeliTsari

    I’m almost encouraged to see a very few old-timey sources, now joining nascent PropR’Not survivors, reporting any FACTS (can’t watch Democracy Now, simply LIE for corrupt union & Democrat kleptocrats, anymore. It’s no longer funny?) We’d lost any SAY we’d had through affiliation with union, community, “Minority,” religious, special interest groups, a LONG time ago. Throughout COVID, big unions helped “our” party crush strikes by teachers, nurses, 1099 gig workers and ALL poor, mostly minority, frequently refugee workers, sacrificed as “essentials!” WSWS, CounterPunch, In These Times, ProPublica, BAR and a couple others were alone in telling a tragic story, “lefty” blog-aggregators and all media studiously ignored, spun 180° from the truth, or cherry picked to blame poor folks forced to work sick, frequently without ACA insurance, sick days, childcare… infect loved-ones, lose W4 employment & be indentured into 1099 gig-serfdom by chronic PASC & surprise ER, ICU, drug debt.

    1. megrim

      One of my best friends from high school, Jessica Stites, is the executive editor at In These Times. I can say that as long as she is running things, ITT will not let us down.

  9. lyman alpha blob

    Funny how we haven’t heard that great union supporter from Scranton chime in supporting the workers. Let’s go Brandon!

  10. Samuel Conner

    If organized workers get sufficiently strong, they might be able to demand and get contract terms that require that “shares purchased with company funds” be distributed among the workers, or perhaps put into some kind of trust FBO the workers. Management and shareholders can have their artificial share price boosts, but the funds expended for that purpose in the end have to benefit the people who create the value that management is managing.

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