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Deere Walkout Leaves 10,000 Off Job as U.S. Labor Tumult Spreads

Oct. 14, 2021, 6:29 PM

Thousands of John Deere assembly workers on strike this week are the latest sign of unrest amid a national labor shortage stretching from health care to snack makers to agricultural machinery manufacturing.

Workers took to the picket lines early Thursday after the Moline, Illinois-based company failed to reach an agreement with United Auto Workers by the union’s midnight deadline. The 10,000 unionized workers on Sunday had rejected a tentative agreement by a 90% margin.

The Deere & Co. workers add to a swell of current or impending work stoppages nationwide, with employees feeling emboldened by worker shortages, rising company profits, and resulting leverage at the bargaining table.

“Workers are in the driver’s seat,” Harley Shaiken, a labor professor at the University of California-Berkeley, said in a phone interview. “And that is particularly true for a company like Deere.”

Hours earlier, on Wednesday, 60,000 union TV and film workers announced plans to strike for the first time in more than a century, beginning Oct. 18. More than 1,000 Kellogg Co. cereal workers have been picketing since last week, and 24,000 Kaiser Permanente health-care workers may soon go on strike if the company doesn’t meet their union’s demands on pay and working conditions.

The AFL-CIO on social media recently dubbed this month “striketober.”

“The headlines reporting a shortage of workers are missing the point,” AFL-CIO President Liz Shuler told reporters Wednesday during an appearance at the National Press Club. “The pandemic laid bare the inequities of our system. And as we try to get beyond Covid, working people are refusing to return to crappy jobs with low pay.”

CEO Pay and Profits

Early signs of unrest started in August, when Nabisco cookie company workers in six states went on strike over threats of outsourcing jobs to Mexico. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union last month reached an agreement that included wage increases, retirement benefits, and flexible work schedules.

The TV and film workers, represented by the International Alliance of Theatrical Stage Employees, are seeking better schedules, among other demands—including longer breaks between shifts to account for increased production schedules and bigger penalties against managers for forcing workers to skip lunch breaks.

“We’re seeing a greater consciousness among everyone about the way working conditions can be changed during the pandemic,” said Ruth Milkman, a professor of labor sociology at the City University of New York. “People are unhappy with their current options, and some are walking” off the job.

Part of the issue is rising profits. Deere & Co. already has posted a record $4.7 billion profit this year, creating a perception among its unionized workers that the machinery maker is holding out on wages and benefits. The earlier proposal would have guaranteed raises of at least 5%.

“Profits at John Deere have skyrocketed by some 61% in recent years, while its CEO’s salary has exploded by 160% since the start of the pandemic,” Sen. Bernie Sanders (I-Vt.) tweeted Thursday. “Please do not tell me they cannot afford to pay their workers fairly.”

Nationally, CEO pay in 2020 grew 19% over the previous year, according to the left-leaning Economic Policy Institute.

The jump in John Deere CEO John May’s earnings that Sanders referenced amounted to $15.6 million in 2020, compared with $6 million in 2019. Nearly $7 million came from stock awards, according to Bloomberg data, with the company’s share price rising 39% over the last year.

Biggest Job Action Since GM

Thursday’s walkout marks the largest UAW strike since 49,000 General Motors workers walked off the job in September and October 2019. The 10,000-worker estimate also makes it the ninth largest UAW strike since 1985, according to Bloomberg Law data.

John Deere executives in a statement pledged to maintain operations while negotiations continued.

“We are determined to reach an agreement with the UAW that would put every employee in a better economic position and continue to make them the highest paid employees in the agriculture and construction industries,” Brad Morris, Deere’s vice president of labor relations, said.

“These are skilled, tedious jobs that UAW members take pride in every day,” Mitchell Smith, a regional director for the union, said in a notice announcing the strike. “Strikes are never easy on workers or their families but John Deere workers believe they deserve a better share of the pie, a safer workplace, and adequate benefits.”

Workers’ leverage is evident in other areas of the economy. Workers quit their jobs at a rate of nearly 3% in August alone, the U.S. Department of Labor said this week. Shortages of truck drivers and warehouse workers are contributing to backlogs in the national supply chain, and Southwest Airlines Co. was forced in recent days to cancel nearly 3,100 flights in part because it lacked staff to deal with weather disruptions.

To contact the reporter on this story: Ian Kullgren in Washington at ikullgren@bloombergindustry.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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