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.
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:
"If, God forbid, this strike goes on long enough for the next build cycle of combines to start (November 1 or 15, can't remember) it will be a horror show. All of the skilled welder, machinists, and assemblers who normally make these half-million dollar machines will be gone…"
— Jonah Furman (@JonahFurman) October 14, 2021
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.
— Sam? (@sam_a_bell) November 3, 2021
Wish Deere workers the best. The time is long overdue for executive and top manager rent extraction to be reined in.