More than 10,000 Deere & Co employees went on strike on Thursday, the first major strike at the farm machinery giant in more than three decades.
The strike demanding higher wages comes as workers use their increased power in a tight labor market to demand a larger share of the profits of successful companies.
Deere, which will report annual results in late November, has forecast record net income of $5.7 billion to $5.9 billion, and workers think they can take advantage of the national labor shortage to demand that the company share the wealth.
Employees are upset that Deere CEO John May, who last year made nearly $16 million in his first year in the position, is earning 220 times the average company salary of $70,743.
United Auto Workers, the union that represents Deere workers, had said its members would resign if a deal was not struck on Wednesday.
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John Deere workers pick up Thursday at John Deere Davenport Works in Iowa. More than 10,000 John Deere workers began their strike at 11:59pm on Wednesday
Deere, which will report full-year results in late November, has forecast record net income of $5.7 billion to $5.9 billion, and employees want a bigger slice of the pie.
Deere CEO John May made nearly $16 million last year, 220 times more than the average employee at the company
The vast majority of unions earlier this week rejected a contract offer that would bring 5 percent pay increases for some workers and 6 percent pay increases for others at the Illinois company known for its signature green tractors.
“The nearly one million UAW retirees and active members stand in solidarity with the standout UAW members at John Deere,” said UAW President Ray Curry.
Brad Morris, vice president of labor relations for Deere, said the company is “committed to benefiting our employees, our communities and everyone involved.” He said Deere wants an agreement that would improve the economic position of all employees.
“We will continue to work day and night to understand the priorities of our employees and resolve this strike, while also keeping our operations running in the interest of everyone we serve,” Morris said.
Deere, with approximately 27,500 employees in the United States and Canada, had previously said its operations would continue as normal.
The strike will take place in the middle of the US corn and soybean harvest season, at a time when farmers are struggling to find parts for tractors and combines.
The last strike against Deere by the UAW was in 1986, when workers were out for 163 days.
United Auto Workers picket Thursday at John Deere Des Moines Works in Ankeny, Iowa. Deere workers’ strike started at midnight
A file photo shows a John Deere tractor on display at the Husker Harvest Days farm show in Nebraska. The union rejected a contract offer earlier this week that would bring a 5% pay increase for some workers and 6% for others.
35 years have passed since the last major strike at Deere, but workers have been encouraged to demand more this year after long days at work during the pandemic and as companies face labor shortages.
“Our members at John Deere are on strike for the ability to earn a decent income, retire with dignity, and establish fair work rules,” said Chuck Browning, vice president and director of the agricultural equipment division of the United States. UAW. “We remain committed to negotiations until our members’ goals are met.”
A handful of workers began forming a picket line outside the company’s factory in Milan, a western Illinois city near the Iowa border, about 15 minutes after the strike deadline.
The union has dropped a metal barrel and firewood to keep workers warm in preparation for a demonstration expected to last 24 hours a day, the Quad-City Times reported.
Workers began picking at several other Deere plants Thursday morning, including the large company in Waterloo, Iowa, around the time the first shift would normally arrive.
Chris Laursen, who works as a painter at Deere, told the Des Moines Register before the strike it could make a significant difference.
“The whole country will be watching us,” Laursen told the newspaper. “If we stand up here for ourselves, our families, for basic human prosperity, it will make a difference to the entire manufacturing industry. Let’s do it. Let’s not be intimidated.’
35 years have passed since the last major strike at Deere, but workers were encouraged to demand more this year after working long hours during the pandemic
Strikers are expected to remain on the picket line 24 hours a day until Deere relents
Creighton University economist Ernie Goss said workers currently have a lot of leverage to negotiate with because of ongoing staff shortages.
“Right now in the US, the workforce is in a very good position to negotiate, so now is a good time to strike,” Goss said.
Earlier this year, another group of UAW representatives went on strike at a Volvo Trucks plant in Virginia, getting better pay and cheaper health benefits after turning down three preliminary contract offers.
The contracts under negotiation relate to 14 Deere plants, including seven in Iowa, four in Illinois and one in Kansas, Colorado and Georgia.
Contract talks at the Moline, Illinois-based company were underway as Deere expects to report record profits between $5.7 billion and $5.9 billion this year.
The company reported strong sales of its agricultural and construction equipment this year.
Iowa State University economist Dave Swenson said those gains give Deere the means to come to terms with employees.
“They can afford to settle this matter on much more favorable terms for the union and still maintain very strong profitability,” Swenson said.
The strike was called in the midst of the US corn and soybean harvest season, at a time when farmers are struggling to find parts for tractors.
Deere’s manufacturing facilities are a major contributor to the economy, so local officials hope a strike will be short-lived as it will have an immediate impact as striking workers cut spending.
“We definitely want to see our economy stabilize and grow after the impact of the COVID-19 pandemic,” Moline Mayor Sangeetha Rayapati told the Quad-City Times. ‘Hopefully these parties can come to a solution quickly.’
Swenson said the strike’s impact could spread further if companies supplying Deere plants are forced to lay off workers.
So Deere will come under pressure from suppliers and from customers who need parts for their Deere equipment to handle the strike quickly.
And Swenson said Deere will be concerned about losing market share if farmers decide to buy from other companies this fall.
“There’s going to be a lot of pressure on Deere to get closer to union demands,” Swenson said.