Striking Deere Workers Approve a New Contract on the Third Try

The accord, after a five-week walkout by 10,000 employees, increases wages and performance-based pay.


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Striking Deere workers approve a new contract on the third try.

Members of the United Auto Workers on strike last month outside a John Deere plant in Ankeny, Iowa.Credit…Charlie Neibergall/Associated Press

Nov. 17, 2021Updated 10:01 p.m. ET

About 10,000 workers at the agriculture equipment maker Deere & Company will go back to work after the approval of a contract on Wednesday, bringing to an end a five-week strike that affected 14 facilities primarily in Iowa and Illinois.

The six-year contract was ratified, 61 percent to 39 percent, after workers voted down two earlier agreements between the United Automobile Workers and the company, which is known for its distinctive green-and-yellow John Deere products. The new contract raises wages and includes language that makes the company’s performance pay more generous.

“Our members’ courageous willingness to strike in order to attain a better standard of living and a more secure retirement resulted in a groundbreaking contract and sets a new standard for workers not only within the U.A.W. but throughout the country,” Chuck Browning, the director of the union’s agricultural equipment department, said in a statement.

John C. May, Deere’s chairman and chief executive, said in a statement: “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.”

Under the agreement, workers can earn 20 percent beyond their base pay when they hit productivity targets, rather than 15 percent, according to a union spokesman.

The other provisions of the contract are the same as those in a proposal that workers rejected in early November, including wage increases of 10 percent this year and 5 percent each in 2023 and 2025, along with lump-sum payments equal to 3 percent of wages in the remaining years of the contract.

That proposal also gave future employees a traditional pension — something that current workers have but that the union’s initial agreement with the company omitted for new hires — and established a post-retirement health care fund.

About 55 percent of workers voted to reject the second agreement between Deere and the U.A.W., with some complaining that the wage increases were too small at a company that expected to earn nearly $6 billion this fiscal year. Others cited the company’s performance pay, whose targets they said were too difficult for many employees to reach.

Matt Pickrell, a longtime worker at a John Deere plant in Ottumwa, Iowa, said that some workers languished in jobs in which it was effectively impossible to earn performance pay, like employees on an assembly line slowed by supply-chain disruptions.

Mr. Pickrell said that he had the seniority to secure a different assignment when it became clear that there was no way to hit a new performance target, but that more junior workers did not have that option.

“It’s creating another tier,” Mr. Pickrell said, alluding to a compensation system in which workers with less seniority receive lower pay or benefits.

Mr. Pickrell said members of the union negotiating team told workers in Ottumwa on Wednesday morning that the company had pledged to adjust the performance plan to better account for circumstances beyond a worker’s control.

After workers rejected the second agreement, Deere said that its offer had been as generous as it could afford and that it had no plans to return to the bargaining table. But the two sides held further discussions and on Friday reached a third agreement, which proposed changes to the incentive plan.

The strike was part of an uptick of work stoppages in October, but since then some employers have avoided potentially large strikes by negotiating last-minute agreements with unions, including the health care provider Kaiser Permanente and a group of Hollywood studios.

The workers’ willingness to vote down two proposals with significant wage gains reflected the strength of their bargaining position as the nation faces labor shortages as well as their particular leverage over Deere.

While Deere had maintained throughout the strike that it was continuing operations at plants with the help of salaried employees, Larry Cohen, a former president of the Communications Workers of America, said in an interview this month that he was deeply skeptical that the company was able to avoid a major impact on production.

He said this reflected the advantage enjoyed by workers who bargain on a companywide basis, resembling an approach that is common in Europe and South America but relatively rare in the United States.

“There was an opportunity — we can push this as far as we can because the risks are low, they’re not producing anything,” said Mr. Cohen, channeling the mind-set of the workers.

But some workers said they worried that public opinion might begin to turn against them if they walked away from a contract that included substantial improvements.

“If we did turn this down, what would it look like to the public?” said Chris Laursen, another Deere worker in Ottumwa who opposed the initial agreement, just before the second vote.

“If we take what we got now, it’s a decent win for the American labor movement,” Mr. Laursen added. “Hopefully it will help empower workers.”

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