By Tyler Jett, Des Moines Register
United Auto Workers members approved a new six-year contract with Deere & Co. Wednesday, ending a five-week-long strike of the ag and construction machine maker.
About 61% of voters approved the agreement, which includes boosts to hourly wages and retirement benefits. The company will also maintain the health insurance program, in which workers do not pay premiums.
The vote comes after the 10,100-member union rejected two previous contracts proposed by Deere and the UAW, setting off the first strike of the company since 1986.
“UAW John Deere members did not just unite themselves,” UAW international President Ray Curry said in a statement. “They seemed to unite the nation in a struggle for fairness in the workplace. We could not be more proud.”
The contract approved Wednesday was broadly the same as an agreement that 55% of members voted down Nov. 2. After that vote, company officials said they would not offer any further wage or benefits increases. Some union members said they believed the co-workers would change theirs, facing a cold winter with only $275 a week in strike pay from the union.
The number of workers approving the contract increased from Nov. 2 to Wednesday at all the Iowa locals. But no place saw a greater swing than Dubuque, where 68% of the company’s construction and forestry equipment makers approved the contract Wednesday. Just 36% of Dubuque members voted in favor of the first contract.
In Waterloo, the largest local with about 3,000 members, 44% of members approved the contract Wednesday. While still in the minority, the “yes” votes were up from 29% on Nov. 2.
Among the other Iowa locals:
- In Ankeny, 64% approved the contract, up from 51%.
- In Davenport, 77% approved the contract, up from 64%
- In Ottumwa, 75% approved the contract, up from 61%
UAW Local 450, which represents workers at Deere’s Ankeny, told members to resume their normal shifts at 10:30 pm. Wednesday.
“I’m pleased our highly skilled employees are back to work building and supporting the industry-leading products which make our customers more profitable and sustainable,” Deere CEO John May said in a statement.
The approval comes after company and union officials met Nov. 11 and 12 to hammer out a third contract. They reached an agreement almost identical to the second contract, except Deere executives amended elements of the company’s incentive program. Union leaders hope the changes will make performance targets more attainable for employees, boosting the size of weekly paychecks.
On Wednesday morning, UAW members told the Des Moines Register that ratification meetings across Iowa were more subdued than they had been before the first two votes, when some employees admonished union leaders for failing to extract more concession from the company.
In Dubuque, Local 94 President Chad Kaiser told members that Deere might shift production to non-union factories or hire strikebreakers if employees didn’t approve the latest proposal. He added that changes to the incentive program should help employees as well, drawing applause.
Leadership at Local 838 in Waterloo, meanwhile, did not hold a ratification meeting. The group instead assigned workers to hour-long voting blocs throughout the day, based on their last names.
At the hall, members said, Local 838 leaders met individually with any concerned voters to answer questions about the contract. Gone were the heated speeches against the union and the contract that were a hallmark of the first two ratification meetings in Waterloo, when the leaders rented large venues.
In Ankeny, both supporters and opponents spoke out during a meeting Wednesday. In a video provided to the Register, one member told UAW leaders that the latest changes weren’t enough to sway him.
“Do you think it’s a good plan for you?” the man asked, addressing the audience.
“No,” some members shouted back.
Abe Elam, the sergeant-at-arms at Local 74 in Ottumwa, told workers that the contract was a step in the right direction. He said he didn’t believe the union could win greater wage increases or better benefits even if workers stayed out for months.
“This is it,” he said. “We’ve pushed them to that line, and they’re not going to give anything else.”
Big profits. Big concessions.
The strike came as Deere celebrated the prospect of record profits, with executives projecting in August that the company would earn $5.7-$5.9 billion for the fiscal year that ended Nov. 1 — a 62% bump over 2013 earnings, the company’s previous record year.
Executives will reveal whether they actually hit those targets Nov. 24, when they host an investor call.
May earned $15.6 million in 2020, a 160% increase over his 2019 pay. The raise coincided with his promotion to the top spot but was still lower than the $21.7 million that then-CEO Samuel Allen received the year before.
Nevertheless, May’s pay bump was a rallying point among UAW members, with some displaying signs asking for their own 160% raise. Employees also said they were willing to hold out for more money because they worked through the height of the pandemic and know managers have struggled to hire new workers.
In the first contract introduced in early October, Deere offered 5% and 6% pay increases and re-introduced quarterly cost-of-living adjustments, a feature of previous Deere-UAW contracts that the company eliminated in 2015. Deere also offered workers $3,500 bonuses if they ratified the contract.
The company proposed a boost to the pension program that would have given a 25-year employee about $100 extra every month upon retirement. Deere also offered lump-sum payments of $20,000-$50,000 for workers when they retire, depending on their length of service. At the same time, the company proposed to eliminate the pension program for workers hired after Nov. 1.
After members rejected the contract, Deere upped its offer. Employees would get 10% pay bumps and ratification bonuses of $8,500. The company also promised to preserve the pension program for future workers and boost payments to retiring employees, giving a 25-year worker about $250 extra every month.
The company threw in a second lump-sum payment for those workers: $2,000 for each year at the company as of 2021. Union leaders told employees that the money is supposed to pay for health insurance until they qualify for Medicare.
Under the contract approved Wednesday, workers on the lowest end of the pay grade, like those in foundry support, will see an hourly wage increase from $20.12 to $22.13. The skilled trades positions at the top of the pay grade, like electricians, will see hourly boosts from $30.04 to $33.05.
Members split on what to do
Outside of the Palace Theatre at Adventureland Park, where Des Moines Works employees voted Wednesday, members were divided on whether to extend the strike.
Chuck Smith, a welder, declined to say which way he voted. But he told the Register that the company can afford to pay rank-and-file workers better, even though a Deere spokesperson said the company had “economically exhausted” its offers last week.
Smith pointed out that even in 2015, a down year by Deere’s standards, the company earned a profit of $1.9 billion.
“Look at what they’re paying executives,” he said. “Look at what they’re giving their CEO. It’s corporate greed.”
But Bob Loney, a maintenance welder, warned that employees would regret a longer strike. Loney has been with the company since before October 1997, when the union and Deere agreed to cut benefits and wages for new hires. That means he is in line for a better retirement plan than most employees at Des Moines Works.
“They’re going to push too hard,” Loney said. “And Deere’s going to push back harder.”
Dustin Garland, a machinist on the company’s cotton pickers, voted for the contract because he was pleased that Deere preserved the health insurance program.
Garland picked up a part-time job at Amazon.com’s Bondurant fulfillment center during the strike, a job he doesn’t like as much as his work at Deere.
Forklift driver Randy Oldham, meanwhile, said he approved the contract Wednesday as he thought about the misery of striking duty in December and January.
because he knows how miserable strike duty in December and January would be.
“I’m an old man,” he said. “And I don’t want to be picketing in the cold.”