John Deere Workers Hit the Picket Lines as Company Expected to Report Record Profits

More than 10,000 John Deere employees went on strike Thursday after failing to reach an agreement with the company, the Associated Press reported. The first major walkout for John Deere in over three decades came as the company is expected to report record profits of between $5.7 billion and $5.9 billion this year.

The vast majority of the United Auto Workers (UAW) union members at the company rejected an offer this week that would have given 5 or 6 percent raises to workers. The union had warned that it would walk out if a deal wasn't reached Wednesday, and workers began forming a picket line outside the plant in Milan, Illinois, about 15 minutes after the deadline.

John Deere has been recording strong sales of its equipment throughout 2021, which Iowa State University economist Dave Swenson said could allow the company to meet the striking workers' fiscal demands, the AP reported.

"They can afford to settle this thing on much more agreeable terms to the union and still maintain really strong profitability," Swenson said.

For more reporting from the Associated Press, see below.

John Deere Strike
More than 10,000 John Deere employees went on strike Thursday after failing to reach an agreement on worker payments with the company. A Dutch farmer sitting atop his tractor is reflected on a Deere & Co. John Deere tractor during a rally against the government's plans to reduce nitrogen emissions in the country on July 7, 2021 in The Hague, Netherlands. Yuriko Nakao/Getty Images

"The almost one million UAW retirees and active members stand in solidarity with the striking UAW members at John Deere," UAW President Ray Curry said.

Brad Morris, vice president of labor relations for Deere, said the company is "committed to a favorable outcome for our employees, our communities and everyone involved." He said Deere wants an agreement that would improve the economic position of all employees.

"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," Morris said.

Thirty-five years have passed since the last major Deere strike, but workers were emboldened to demand more this year after working long hours throughout the pandemic and because companies are facing worker shortages.

"Our members at John Deere strike for the ability to earn a decent living, retire with dignity and establish fair work rules," said Chuck Browning, vice president and director of the UAW's Agricultural Implement Department. "We stay committed to bargaining until our members' goals are achieved."

The union dropped off a metal barrel and firewood to keep workers warm in preparation for a demonstration that is expected to continue for 24 hours a day, the Quad-City Times reported. Workers began picketing at several other Deere plants — including at its large operation in Waterloo, Iowa — Thursday morning around when the first shift would normally arrive.

Chris Laursen, who works as a painter at Deere, told the Des Moines Register before the strike that it could make a significant difference.

"The whole nation's going to be watching us," Laursen said to the newspaper. "If we take a stand here for ourselves, our families, for basic human prosperity, it's going to make a difference for the whole manufacturing industry. Let's do it. Let's not be intimidated."

Under the agreement that the workers rejected, a top-scale Deere production worker would make just over $30 per hour, rising to $31.84 after five years, according to a summary of the proposal.

Creighton University economist Ernie Goss said workers have a lot of leverage to bargain with right now because of the ongoing worker shortages.

"Right now across the US, labor is in a very good strong position to bargain, so now is a good time to strike," Goss said.

Earlier this year, another group of UAW-represented workers went on strike at a Volvo Trucks plant in Virginia and wound up with better pay and lower-cost health benefits after rejecting three tentative contract offers.

The contracts under negotiation cover 14 Deere plants, including seven in Iowa, four in Illinois and one each in Kansas, Colorado and Georgia.

The Deere production plants are important contributors to the economy, so local officials hope any strike will be short-lived because it will have an immediate impact when striking workers cut back on their spending.

"We definitely want to see our economy stabilize and grow after the impact of the COVID-19 pandemic," Moline Mayor Sangeetha Rayapati said to the Quad-City Times. "Hopefully, these parties can come to a resolution soon."

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.

John Deere Tractor
The first major walkout for John Deere in more than three decades began Thursday as the company is expected to report record profits between $5.7 billion and $5.9 billion this year. A John Deere tractor is on display at the Husker Harvest Days farm show in Grand Island, Nebraska, on September 10, 2019. Nati Harnik/AP Photo