UAW Members Reject Second Contract Proposal From John Deere, Strike Continues
Deere & Co. employees will remain on strike after the United Auto Workers rejected a second contract offer Tuesday.
Members across Iowa, Illinois and Kansas voted against the proposal, 55%-45%, continuing the strike against the agriculture and construction equipment maker that started Oct. 14. Union and company officials did not say when they expect to return to the bargaining table.
"Pickets will continue and any updates will be provided through the local union," UAW International spokesperson Brian Rothenberg said in a statement.
Deere Chief Administrative Officer Marc Howze said in a statement that the company "will execute the next phase of our Customer Service Continuation Plan" to keep its factories running.
Howze said company executives made their latest offer to workers "even though it would have created greater competitive challenges within our industries."
"We had faith in our employees’ ability to sharpen our competitive edge," he said.
The latest ratification vote was far closer than the Oct. 10 tally, when 90% of members voted down Deere's first contract offer. Following two weeks of negotiations, union and company officials proposed a second agreement Saturday. Compared to the first contract, the company promised to double the immediate wage increase, boost retirement benefits and preserve the pension program for future hires.
Local unions in Iowa were split on the contract. In Des Moines, 51% of UAW Local 450 members approved the contract. The majority of members at UAW Local 74 in Ottumwa and UAW Local 281 in Davenport also approved the contract.
But the two biggest locals rejected the proposal. At UAW Local 838 in Waterloo, 71% of members voted against the contract. So did 64% of voters at UAW Local 94 in Dubuque.
Among the 10,100 striking workers, supporters of the second contract said they were proud of the gains the UAW secured and didn't believe holding out would win them enough extra money to justify a longer strike. The union gives UAW members $275 a week while they picket, about $530 less than what the lowest-wage members earn and about $925 less than what the highest-paid workers get.
Other employees vowed to hold out for yet another offer from the company.
Deere earned a record profit in the fiscal year that ended Monday. The company has not yet released its financial report, but executives projected in August that Deere would earn $5.7-$5.9 billion — at least 62% more than in 2013, its previous record year.
Douglas Woolam, a 23-year employee at John Deere Seeding Group in Moline, was among those who voted against the contract Tuesday.
Woolam said his family has worked at Deere for 75 years, beginning with his grandfather. Woolam's aunt and father later worked there, and Woolam joined in 1998
He said his father retired earning a higher wage than Woolam does now. Though his father had cancer when he left the company, Woolam said Deere's lump-sum retirement benefits were enough to cover the cost of a new roof, siding and windows for his parents' home, saving his mother from expensive repairs. At the time, the company also covered health insurance for retired employees and their spouses.
The new contract would have paid union employees between $22.13 an hour and $33.05 an hour, depending on their position. But Woolam said the majority of employees are on the lower end of that pay scale, earning no more than $23.70 an hour — about $50,000 a year before overtime.
"I'm not thinking about me," Woolam said. "I'm thinking about people behind me. My dad thought about people behind him. My aunt thought about people behind her. And my grandfather thought about people behind him."
The UAW secured several concessions from Deere over the last three weeks.
First, the company offered immediate, 10% pay raises across the board. Deere previously offered 5% or 6% raises, depending on the position.
Deere also enhanced the pension plan. A 25-year employee would get about $150 a month more in retirement than under the company's first offer.
And while the previous agreement would have ended the pension plan for future Deere employees, the new proposal preserved the benefit. The company also increased lump-sum payments to retiring workers. A 25-year employee would have gotten about $100,000 — $60,000 more than under the first contract.
The company would have paid an $8,500 bonus if workers approved the second offer, up from $3,500.
Chris Sinn, a 19-year plumber at John Deere Des Moines Works in Ankeny, said he voted for the contract because he was "pleasantly surprised" by the company's offer.
Some Deere workers complain that the UAW never regained ground after letting the company create a two-tier wage system in October 1997. Employees hired after that date earn less and receive fewer benefits than their veteran counterparts.
Sinn did not vote on the first contract. But he said he turned out Tuesday because he had never seen the union win so many concessions from the company since he joined.
As a skilled trades employee, Sinn is on the higher end of Deere's wage scale. The new contract would have immediately raised his pay to $31.42 an hour from $28.57.
With the company also promising to raise wages by 5% in both 2023 and 2025 and reinstating quarterly cost-of-living adjustments, the UAW projected that workers would have seen a 30% pay boost by 2027, the last year of the proposed agreement. The estimate would have equated to $37.08 an hour for Sinn.
"It's a step in the right direction," he said. "They actually offered something this time."
Workers divided over second offer
When he arrived at Adventureland Park's Palace Theatre, where UAW Local 450 members voted, Bon Sihom said he wasn't sure which way he would cast his ballot. He was leaning toward approving the contract.
A 17-year inspector at Des Moines Works, Sihom said other employers would pay him more than Deere does, even with the 10% wage increase. But he hopes to retire in 12 years, and he said the boosts to the pension and the lump sum payments appealed to him.
He added that employees likely would be out of work through the holidays if the contract didn't pass Tuesday.
"We'll be on strike until at least January," he said. "The company isn't going to come back to us for a while."
Abe Elam, a 19-year inspector at John Deere Ottumwa Works, said he voted for the contract Tuesday after listening to UAW Local 74 leaders describe its gains over the original offer.
Elam, the local's sergeant at arms, had been among the skeptical union members in recent years. He lobbied co-workers to vote down the six-year contract that barely passed in 2015, even trying — unsuccessfully — to speak against the company's offer at other UAW locals.
He also voted against the first contract Oct. 10. But he was impressed by the new proposal.
"We sent (union leaders) back up there for more wages," Elam said. "We got them. We sent them back there for a higher pension. We got them."
Even if the company provides more with a third offer, Elam doubts the next gains will be significant enough to justify forgoing a paycheck while the strike stretches for weeks or months.
"You're basically giving up a lot of money for a chance at a little bit of money," Elam said. "It makes no sense."
Brian Vorhes, a 17-year assembler at Des Moines Works, said he believes the company can still offer enough of a wage boost to justify a longer strike. He voted against the contract because he said Deere executives will feel more pain in the next couple of months, motivating them to make greater concessions.
Vorhes works on grain drills at the company's Ankeny plant. Normally, he said, the company assembles the machines from October through June. He and others on his team take a couple of months off during the summer, using vacation pay, unemployment insurance and some payments from the company.
This year, though, plant managers told Vorhes they wouldn't resume making drills until November because they couldn't get parts from suppliers. More importantly, he said, managers also delayed production of cotton pickers — one of the factory's most profitable products.
He said the strike hasn't hurt the company as much as it could, given that workers like him were already scheduled off. Plus, he said, the company hasn't paid them during the strike. He believes Deere actually benefited the last couple of weeks, at least in Ankeny.
"The company hasn't felt any pain," he said. "That's why I don't think this offer is valid."
Tyler Jett covers jobs and the economy for the Des Moines Register. Reach him at tjett@registermedia.com, 515-284-8215, or on Twitter at @LetsJett.