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Strike Gives Deere Workers a New Deal That’s Better Than Most

Nov. 2, 2021, 9:31 AM

John Deere workers went on strike last month hoping to snag a bigger piece of their employer’s $5 billion pie, forcing the company to shift office staff to the assembly line. Now, it appears the workers got their wish.

Deere & Co. workers are set to vote Tuesday on a tentative six-year deal that would give them an initial pay bump of double the company’s original offer—part of a package of perks that demonstrates unions’ increased leverage amid a national worker shortage and strong demand for farm equipment.

The agreement, which would end a two-and-a-half-week walkout if more than 10,000 workers sign off, calls for a 10% wage increase in the contract’s first year and an $8,500 signing bonus—figures on par or better than other contracts the United Auto Workers has negotiated in recent years.

If ratified, the starting wage increase at 14 Deere facilities would be larger than nearly a dozen other collective bargaining agreements the UAW has negotiated since 2018, according to Bloomberg Law’s database of labor contracts, which compiles data on select agreements from public sources.

Only one of the 12 contracts in the database had an initial wage increase higher than the deal with Deere, and only three of that number offered workers bigger bonuses.

For example, the 2019 agreement UAW brokered with General Motors, which ended a 40-day strike, secured an $11,000 bonus for workers and two 3% raises in the second and fourth years of the contract’s life cycle. Deere workers are poised to get 5% raises in the third and fifth years of the contract.

They can further expect three 3% lump-sum payments in alternating years. The GM contract offered two lump-sum payments of 4%.

Employer ‘Willing to Negotiate’

The strike began last month after the workers rejected a proposal that called for a 5-6% wage increase in the first year. Deere had already posted a profit of $4.7 billion this fiscal year, leading workers to believe they had more room for bargaining.

“It just shows Deere was more willing to negotiate in the end,” said Bill Spriggs, chief economist for the AFL-CIO. “They knew they couldn’t stand many more disruptions to their supply chain.”

Workers at the Illinois-based company were also able to torpedo the expansion of a tiered system that would have slashed retirement benefits for newer workers, according to a document published by the union. The deal wouldn’t make changes to health-care costs from the prior collective bargaining agreement, with union employees paying neither premiums nor deductibles.

Union members can be influenced by elements of contract proposals beyond base wages. The GM agreement, for instance, also removed a $12,000 cap on profit-sharing payouts, offered a temporary $60,000 retirement incentive, and a one-time $1,000 employer contribution plan to a personal savings plan for workers with defined pensions.

The Deere proposal would offer a $35,000 retirement bonus for workers with 10 to 24 years on the job and a $50,000 bonus for workers with at least 25 years.

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