Deere Takes Hard Line After Workers Reject Second Offer
(Bloomberg) -- Deere & Co. said the new contract it provided to striking union employees is the company’s best and final offer, and they aren’t returning to the bargaining table.
The world’s largest maker of farm equipment said it remains in contact with the United Auto Workers union that represents workers, but that it has nothing else to bargain about. The comments come a day after workers voted down a second tentative agreement, extending the strike by some 10,000 workers into a third week.
“The agreement that we provided is frankly our best and final offer,” Marc Howze, chief administrative officer for Deere, said in an interview. “In order for us to be competitive we have gone as far as we’re gonna go.”
The rejected deal offered larger wage increases, no new tiers to retirement benefits and a signing bonus of $8,500. The wage increase affecting 14 of Deere’s facilities was larger than nearly a dozen other collective bargaining agreements the UAW has negotiated since 2018, according to Bloomberg Law’s database of labor contracts.
The company’s existing “two-tier” compensation system, in which workers hired since 1997 receive less generous benefits than those who started working there earlier, has been a sticking point for many employees, and would not have been abolished by the tentative agreement.
“We are still on strike,” UAW spokesman Brian Rothenberg said in a statement, adding that the parties are still discussing next steps.
While the current labor market has strengthened workers’ leverage and weakened threats of permanently replacing those on strike, employees have the most power in sectors where strikes can seriously disrupt or halt production. In the case of Deere, a pause in operations could affect the harvest and ripple through to the food sector.
Deere is enjoying record profits, with projections for its full-year earnings between $5.7 billion and $5.9 billion.
The Moline, Illinois-based company said Tuesday it would move into a new phase of its customer service continuation plan. Howze, though, would not give details, other than to say that the company is focused on meeting customer demand, especially for its parts business. The parts business is crucial at this time of year, because farmers are harvesting and need their equipment running at full capacity.
Currently, Deere is keeping its business going by staffing facilities with salaried employees. Howze wouldn’t say how many striking workers the company was able to replace. Howze said that while the company is in touch with the union, they’re not going back to the bargaining table because “there’s nothing else to bargain about.”
“The stakes are high, but a victory for the union in this strike could help reshape the terms of the post-pandemic economy,” said Chris Rhomberg, a sociology professor at Fordham University.
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