Deere releases statement after layoffs announced

John Deere released the following statement to Our Quad Cities News on Thursday after layoffs were announced Wednesday:

Due to reduced demand for our equipment, John Deere has informed employees at three of its facilities in the Quad Cities of upcoming layoffs effective Jan. 3. These include:

• John Deere Harvester Works in East Moline, Illinois: About 200 production employees
• John Deere Davenport Works in Davenport, Iowa: About 80 production employees
• John Deere Seeding and Cylinder operations in Moline, Illinois: Seven production employees

It is important to note these layoffs are due to reduced demand for the products produced at these facilities. They are not related to production moves. As we have repeatedly stated, layoffs this fiscal year are due to the weakening farm economy and a reduction in customer orders for our equipment.

Why are orders down?

• The U.S. Department of Agriculture (USDA) forecasts major row-crop cash receipts to be down another 18% in 2024, following a 5% decline last year.
• The USDA also forecasts marketing year average prices for the new crop (crops harvested right now) to continue to decline from last year and to be down over 30% compared to a couple of years ago (compared to 2022: corn -37%, soybeans -24%, and wheat -35%).
• In the construction industry, compared to its peak in 2021, single-family home sales are down 30%, single-family housing starts are down 10%, and multi-family housing starts are down 40%.
• Despite some interest rate reductions, the current interest rate level is still elevated compared to recent history.

Additional information:

Current employee totals for each facility:

• John Deere Harvester Works currently has 1,880 total employees with about 1,395 working in production and maintenance jobs.
• John Deere Davenport Works currently has 1,024 total employees with 824 working in production and maintenance jobs.
• Seeding and Cylinder operations currently has about 625 total employees with 427 working in production and maintenance jobs.

• Employees are eligible to be recalled to their home factory for a period equal to their length of service. Those laid off are automatically placed in seniority order for openings they are qualified to perform at the factory.
• Laid-off employees will receive the following monetary benefits:

o   Supplemental Unemployment (SUB) pay, which covers about 95% of their weekly net pay for up to 26 weeks, depending on their years of service.

o   Transitional Assistance (TAB) pay, which covers 50% of their average weekly earnings for up to 52 weeks, after SUB pay runs out.

o   Profit Sharing, which is calculated based on their hours worked, average earnings, and the company’s profit margin, if they have at least one year of service by the end of the plan year.

• Healthcare benefits that employees can receive during a layoff include:

o   Employees can keep their healthcare coverage for at least six months, or as long as they are eligible for SUB pay, whichever is longer. After that, they can extend their coverage for another 12 months, but they have to pay the full premiums themselves.

o   Weekly Indemnity: Employees who become disabled while on layoff can get WI benefits for the same duration as their SUB pay, up to 26 weeks, if they meet the requirements.

o   Employee Assistance Program: Employees and their household members can access EAP services for the duration of their recall rights. EAP provides up to eight sessions of in-person or virtual therapy per year.

Other benefits laid-off employees may receive include:

• Life insurance, legal assistance, tuition reimbursement and job-placement assistance.

EARLIER UPDATE

A Facebook post from the United Auto Workers Local 865 indicates the company’s plans for layoffs at Harvester Works that will take effect Jan. 3.

Iowa State University Ag Economist Chad Hart says this points to a drop in farm sales and companies likely will ride out the downturn for a while.

“You can think of the ag economy like the Jarrell economy,” he said. “It goes through a cyclical pattern where we have a good run followed by a bad run. Well, you can think back two, three years ago, ag was riding high. Now we’ve slid back down again. Eventually, it will pop back up, but it just takes some time.”

This comes after John Deere laid off about 600 employees in Iowa and Illinois earlier this year.

‘Today is a hard day for our Quad Cities community.’

On Wednesday afternoon, Congressman Eric Sorensen (IL-17) released a statement on the news of an additional round of layoffs at Deere & Company:

“Every day, I’m proud to be a Quad Citizen and call this place my home. We have a special way of life here, we take pride in what we do, and how we do it. Deere & Company is part of the fabric of the Quad Cities and the UAW workers who build the Seeders & Harvesters that are used around the world help our community thrive and grow,” said Sorensen.

“Today is a hard day for our Quad Cities community and I pledge to do everything that I’m able to support the workers affected by these layoffs. Our Congressional Office has the resources to connect affected workers with services and benefits. We will work hand-in-hand with our partners in the Governor’s Office and UAW to make sure that we do everything we can to support workers.”

“Representing our district on the House Agriculture Committee has always been important, and it is clear from today’s decision that now more than ever we need to pass a bipartisan Farm Bill. Critical programs that impact the price of corn and soy are running out of money and need to be replenished and updated. This affects Deere & Company’s production and impacts workers as much as our family farmers. We must get a bipartisan Farm Bill passed, which will open up opportunities for Deere.”

“Deere & Company’s annual profits exceed $7 billion,” Sorensen said. “Today’s stock price exceeded $410 per share. C-suite salaries are in the tens of millions of dollars. They can afford to better take care of their workers in John Deere’s hometown.”

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