John Deere: Labor puts its Big Battalions into the field

Strikes are back in the news. The strike at John Deere, the giant farm equipment manufacturer, is by far the largest of these strikes. Deere’s 10,100 strikers make up about 60% of the workers on strike at the moment. It is the largest strike in the country since the Chicago Teachers Strike in 2019 and the largest private sector strike since the General Motors walkout in the fall of that year. This means that it’s important to follow this strike carefully. The purpose of this article is to explain the background and key issues of the strike.

Green and Yellow rakes it in

The last years have been good ones for the Green and Yellow bosses. The company made $4.7 billion dollars in the first three quarters of this year. Analysts forecast, before the strike, that Deere would bring in profits of $5.9 billion this year, a 69% increase over last year. CEO John C. May’s compensation went up by 160 percent. Shareholders were part of this bonanza, receiving $761 million in dividends. Management cries of poverty during the strike should not be taken seriously.

The year 1997 is the best place to begin looking at labor-management relations at John Deere. Workers hired after that year receive lower pensions, have weaker retirement health care plans, and end up paying more in out-of-pocket medical expenses due to poorer coverage. This two-tier system has created great worker resentment. Management poured oil on the fire during the latest bargaining round by proposing to add yet another tier to the workforce by ending traditional pension benefits for all workers hired after November, 2021. Instead of pension benefits paid through funds contributed by the company, future new hires would only be offered a 401(k) scheme, where the retirement funds would largely have to be contributed by the workers rather than the company. This proposal has been a bridge too far for many workers and is a central reason for the current strike. Workers were hoping that this contract would end two-tier, not move to three-tier!

The feeling of disunity and stress on the shop floor has been made worse by the ridiculously named Continuous Improvement Pay Plan. This gives workers a lower base wage with the remainder of their pay made up by a complex set of productivity metrics. Each work team is checked every 26 weeks to make sure that their output has hit the 2% productivity increase threshold required to maintain their wage rate. Matters are made worse when management designates a new work procedure as a design or method change, in which case productivity increases do not count towards higher wages.

Management has proposed a phased-in wage increase of 11 to 12 percent over six years. This is less than the current rate of inflation. Workers would actually be getting a decrease in real wages.

The situation at John Deere has obviously been on the boil for some time. Two external features complete the picture. The first is the economy. Unemployment has declined from a pandemic high of 14.8 percent to the current 4.8 percent. And 4.3 million workers voluntarily quit their jobs in August. These figures show the fear of being laid-off or fired has, to a certain extent, decreased. This makes workers less intimidated by management and more likely to go on strike.

The farm equipment industry has benefited from the current increase in agricultural commodity prices. Farmers have had the money to buy new agricultural implements. There is a definite need for spare parts. All of this has strengthened the hand of the union.

A second external feature is the crisis inside the United Auto Workers union (UAW). A sprawling corruption scandal has led to the conviction of 15 union leaders. Former Presidents Dennis Williams and Gary Jones have both been imprisoned. The credibility of the leadership has been greatly weakened. The leadership’s proposals for contract ratification do not necessarily pass. For example, workers at Volvo trucks in Virginia recently rejected proposed contracts three times in a row.

On strike!

This, then, is the background to the current strike. On October 10, UAW members voted down a tentative agreement by 90 percent. This set the clock running. On Thursday, October 14, 10,100 John Deere workers went on strike. In Iowa, the workers are at five plants in Ankeny, Waterloo, Dubuque, Davenport, and Ottumwa (home town of M.A.S.H. ‘s beloved Corporal Radar O’Reilly!). Moline and Milan are the strike locations in Illinois. Smaller warehouses in Colorado and Georgia are also on strike.

Continuing its love of stupid names, John Deere management has prepared a strike-breaking Customer Service Continuation Plan. Its aim is to continue production with non-union employees. Initial reports suggest that this is more of a PR stunt than a serious attempt to run the factories. There have been strong and active picket lines at all of the plants. Local community support for the strikers has been strong. There has been a great deal of media coverage. Morale seems strong. These events are the backdrop for the reopening of talks between union and management on Monday, October 18.

There will be effects from the strike in a number of fields. The strike will intermesh with the supply bottleneck crisis that’s now taking place. In particular, we are now in the farm harvest season so spare parts will be at a premium. There have already been run-on shut downs with smaller firms that supply the huge John Deere operation.

The corruption scandal inside the UAW led to a Consent Decree which called for a referendum of UAW members to determine if the President and the other eleven members of the International Executive Board should be elected by the rank and file or by the convention delegates. The voting period has just begun. Ballots were mailed out on October 19 and are due back by November 29. The rank-and-file Unite All Workers for Democracy caucus is vigorously campaigning for direct membership election of officers. A high profile UAW strike, such as the one at Deere, is bound to have an impact on the referendum.

Today’s workers fight for tomorrow’s workers

In conclusion, there’s an important point to be made about this particular strike. The workers are not just fighting for themselves. They are not only trying to end the lower medical and pension coverage for the workers hired since 1997. The workers wish to protect the pensions and health care of new hires. They are fighting to defend the interests of workers who haven’t been hired yet, the interests of future generations. The John Deere workers are standing up for people they don’t even know. These workers are going through the turmoil of a strike and losing their incomes during the strike for the sake of other workers. This confirms our conviction that the labor movement is the inheritor of all that’s good in the human condition.