Striking Deere Workers Hold Out For Better Deal

Above Photo: For the second time in a month, 10,000 UAW members at John Deere stunned both the company and the union leadership November 2 by rejecting a tentative agreement. UAW Local 838.

A month into the nation’s largest work stoppage, striking John Deere workers are holding out for a better deal.

For the second time in a month, 10,000 Auto Workers at John Deere stunned both the company and the union leadership November 2 by rejecting a tentative agreement. Workers at the farm equipment manufacturer remain on strike. Company and union negotiators are set to meet today for the first time since the deal was voted down.

The vote was closer than on the first tentative agreement, which was rejected by 90 percent of members. This time, 55 percent voted no.

It came as a shock to many analysts, given the concessions workers had been able to wring out of Deere during their first two weeks on strike. The agreement included immediate 10 percent raises—double what was in the first TA—plus two more 5 percent raises and three 3 percent lump sum payments during the six-year contract. It killed the “third tier” Deere had proposed, preserving the option of a traditional pension for all new hires. It restored a cost-of-living adjustment that workers had lost in the last contract. And it boosted existing pensions and added retirement bonuses. To sweeten the deal, Deere offered an $8,500 ratification bonus.

But for a majority of Deere workers, that wasn’t enough. They’re pushing for a deal that includes retiree health insurance (currently offered only to workers hired before 1997), shores up the incentive pay system, fixes a broken grievance system, and brings real wages up to pre-’97 levels, taking Deere’s record profits into account.

They feel like it’s now or never. “If we don’t get caught up [on wages] now, we’ll never be in this position again,” said Brad Lake, a member of UAW Local 838 in Waterloo, Iowa. “We will always be playing catch-up, because these contracts are six years.”

Not-So-Final Offer?

The company initially told the media it didn’t plan to return to the bargaining table. “The agreement that we provided is frankly our best and final offer,” Marc Howze, chief administrative officer for Deere, said November 3 in an interview with Bloomberg. “In order for us to be competitive we have gone as far as we’re gonna go.”

Yesterday afternoon, however, news broke that there was indeed a meeting scheduled between the UAW bargaining team and management for today.

Wall Street seems more concerned with a prolonged strike than with increases in labor costs, which currently account for 10 percent of the company’s expenses. Deere just wrapped up its most profitable year ever—in its fiscal year 2021, which ended on October 31, the company was projected to make $5.7 to $5.9 billion in net income. On November 24, the company will report its actual earnings, and set projections for the new fiscal year; some workers think Deere will want to settle before that happens, to protect investor confidence.

Analysts at Morgan Stanley estimate each day of the strike is costing Deere $58 million in revenue and $17 million in profits. Each month the strike drags on will cost the company an estimated $500 million in profits. The question for workers is: how long will the company hold out?

Will Deere attempt to starve out its workers until they’re ready to accept the same deal—or is the company bluffing?

The No Vote

A sense of confidence fueled the no vote. If, after 17 days on strike, workers were able to get Deere to double the raise, boost the pension, and eliminate the proposed third tier, what could be won after a few more weeks?

With Deere so far behind on production, the planting season just around the corner, and the company about to release its projected earnings for the next fiscal year (eagerly anticipated by Wall Street investors, for whom Deere is a hot stock, having more than doubled since the beginning of the pandemic), the company is surely feeling the squeeze.

In a tight labor market, Deere may have trouble finding thousands of replacement workers—while it’s easier for strikers to find short-term jobs with comparable wages (if not benefits) elsewhere, to stay afloat while the strike continues. One member told Labor Notes they’d received 11 job offers in two weeks.

Under these circumstances, many workers expect a better agreement soon, rather than a prolonged strike. “I don’t think it’ll take two more months before Deere comes back to the table,” said Lake, before the announcement that the company and union meeting today. “This first quarter [of the fiscal year] is always one of the busiest, because they’re getting ready for the next planting season, they’re getting ready for spring. We’re so far behind that they need to get caught up and get ready for the push.”

Deere has thus far held back from cutting off workers’ health insurance. It had threatened to do so early in the strike—as well as vowing to withhold the “Continuous Improvement Pay Plan” (CIPP) bonus payments due to members—but abruptly reversed course. If Deere followed through on its threat, the UAW would use its $790 million strike fund to cover the costs of continuing health insurance coverage.

Split Vote

Unlike in the first ratification vote, where every local voted no overwhelmingly, the vote split on the second TA varied widely from local to local.

A majority in five of the nine locals in the master agreement voted yes, some by as much as 65 percent. The no vote was strongest in the two largest locals, both in Iowa: Waterloo Local 838, which voted 71 percent no, and Dubuque Local 94, which voted 63 percent no.

In Waterloo, the commitment to obtaining pre-’97 benefits was a major factor behind the no vote. “We put our bodies into a meat grinder every day for eight to 12 hours a day and weekends,” said Local 838 member James Geiger. “We’ve sacrificed our bodies and time with our families to build the best equipment in the world. Retirement healthcare is the least the company can do for us.”

At Harvester Local 865 in East Moline, Illinois, which also rejected the contract by 55 percent, the focus was more on broken grievance procedures and language around the CIPP (pronounced “kip”), a complicated piece rate formula that determines bonuses.

Workers under the plan each have a CIPP fund into which bonuses are paid according to their departmental output. When your department’s performance exceeds the 115 percent target set by management, funds go into your account; when performance falls short of that metric—known as a “failing plan”—money comes out. Accounts are paid out at the end of each quarter. For those lucky enough to work in certain departments, CIPP payouts can be in the thousands every quarter. For many others, though, even if there are a few good weeks, “failing plans” eat into the gains.

The process for challenging management’s metrics or speed-up mechanisms is opaque. Workers at Harvester recently lost a multi-million dollar arbitration over significant lost CIPP payouts when one department’s formula was revised. They want to see language ensuring the same thing won’t happen again.

Another big frustration is that grievances over CIPP and other issues often take years to resolve. Many members voted no because of that factor alone, saying they wanted a stronger, faster grievance procedure.

“You end up filing the same grievance week after week after week,” said Kristin Jordan of Local 865, who has worked at Deere for 19 years.

Still, that wasn’t reason enough to vote no on the deal for Jordan, who felt it was a good offer, citing improvements on retirement, the ability to take vacation time, and the cost-of-living adjustment. She said that while changing the grievance procedure would be a step forward, the union still needs to be more proactive about enforcing the contract.

“I think our union could be a lot more aggressive,” said Jordan. They could be out on the floor more, be proactive as far as the problems that we have. The company does the things they do because we let them, to some extent.”

Jordan also feels the union could be providing more information to members about the status of negotiations. “They should be sending out weekly updates. Even when you go to the hall there’s no one to talk to, they don’t know anything. Psychologically you’ve got to tell people what’s going on. Wouldn’t you want your membership to at least know what’s happening?”

On The Picket Line

The strike has hampered operations for Deere. One salaried worker at the massive Parts Distribution Center estimated output at less than 50 percent of normal. A dealer told Labor Notes that many parts are being mislabeled or misdelivered. Trainings for new employees in the construction and forestry division of the company have been cancelled because those staff are diverted to strikebreaking duties.

For those salaried staff working the strike, Deere published an FAQ with this advice: “When in towns where UAW strikes are occurring, avoid wearing JD apparel outside of work.” Deere has moved away from sharing documents with salaried workers because many sympathetic salaried workers have been leaking documents to the media, as The Intercept’s Ken Klippenstein learned in a leaked audio recording.

Early in the strike, locals organized mass pickets to slow salaried workers and management employees who were attempting to enter the plants. Members reported a three-hour backup of traffic entering plants.

Deere responded by requesting injunctions. On October 20, a state judge issued an injunction against Local 281’s picketing outside the Iowa Davenport Works. The injunction limited the number of picketers at each gate to four and banned the union from using burn barrels (or any type of “fuel”) or setting up chairs.

In response, community members started organizing an emergency rally at the plant. The injunction only banned pickets by UAW Local 281 members and those “acting in concert with them”—so the theory was, supporters acting independently would not be subject to arrest. Some members privately cheered the rally on; others worried it could jeopardize the strike. As a compromise, the rally was moved to the county courthouse, where the judge had issued her ruling.

The local responded to the limitations on the number of pickets by sending the hundreds of workers on rotating picket duty out to do community service stocking food banks and working at Habitat for Humanity. “We wanted to make sure that we spread our harassment and intimidation around as much as possible so we decided to head down to Humility Homes and Services,” wrote Local 281 in a Facebook post with images of members volunteering at a local homeless shelter.

A judge in Ankeny, Iowa, ruled against an injunction request by Deere after a hearing.

Meanwhile, outside of Deere’s Parts Distribution Center in Milan, Illinois, tragedy struck. In the dark early hours of October 27, a Local 79 picket shift was ending as a new one began. Richard Rich, a 15-year UAW member at Deere, was hit and killed as he crossed the busy Milan Parkway from the lot where picketers were instructed to park. Since the strike began, members had been calling the city and the county, asking them to replace several non-functioning street lights, to no avail. The day after Rich’s death, utility vehicles were spotted fixing the lights.

Other locals sounded the alarm about similar hazards. In Waterloo, in the wake of Rich’s death, the company offered the use of a parking lot that would allow picketers to show up for picket duty without crossing a busy four-lane highway on foot. The next morning, just 24 hours after Rich had been struck and killed, management reversed course, forcing members to continue crossing the dangerous road.

‘We Aren’t Volvo’

In the wake of TA 2’s defeat, locals have maintained their round-the-clock picket lines. But many members were concerned that the divided vote would undermine the unity that Deere workers had built in the run-up to and during the strike.

Shannon Olsson, a Local 838 member and parts picker at Waterloo Engine Works, decided the best way to preserve unity was through action. Olsson had voted no on the contract, as did 71 percent of members of Local 838, the largest Deere local. Immediately after the vote he began organizing an informational picket at Deere’s corporate headquarters, the Glass Palace, in Moline, Illinois—not waiting for the official blessing from UAW leaders.

“I am trying to turn people from pointing fingers at each other and take them fingers and point them back at the company,” Olsson said.

Members had rallied at the Glass Palace in mid-September, in the wake of the initial strike authorization vote. There, they held signs that said “POST-RETIREMENT HEALTHCARE” and “WE AREN’T VOLVO.” The UAW strike at Volvo’s Virginia truck plant earlier this year is now on many members’ minds, since it ended after the union brought a tentative agreement that had just been voted down to members for a second vote days later, after the company re-labeled it a “last, best, and final offer.”

Olsson’s hope was to bring those messages back to Deere headquarters. He printed flyers and went to picket lines across Waterloo, and asked members of other locals to do the same.

One hundred members joined the November 8 picket, including members from each of the eight UAW locals at Deere in Iowa and Illinois.

“This isn’t about ‘That guy voted no, this guy voted yes.’ I feel the company attacked us,” said Olsson. “The fact that they try to say this is our last offer, no matter what. That is a threat against these 10,000 workers and their families.”