John Deere employees approve third contract proposal, ending their five-week strike

A five-week strike of Deere & Co. ended Wednesday as United Auto Workers members approved a new six-year contract with the agricultural and construction equipment maker and prepared to report for evening shifts.

About 61% of voters approved the agreement, which boosts hourly wages by 10% and increases retirement benefits. The company also will maintain its health insurance program, in which workers do not pay premiums.

The 10,100 Deere workers in Iowa, Illinois and Kansas had rejected two previous contracts, setting off the first strike against the company since 1986.

More:Following John Deere contract ratification, Des Moines UAW bargaining chair dies of COVID-19

The labor action came in a year when thousands of other workers also have gone on strike and millions quit their jobs, sending employers scrambling to find replacements in the ongoing COVID-19 pandemic.

At least in Iowa, the strikers had wide public support. A Des Moines Register/Mediacom Iowa Poll conducted Nov. 7-10 shows 58% of Iowa adults mostly sided with the workers, with just 16% mostly siding with Deere. Support cut across political, age, gender, income, educational, urban and rural divides.

"UAW John Deere members did not just unite themselves," UAW international President Ray Curry said in a statement. "They seemed to unite the nation in a struggle for fairness in the workplace. We could not be more proud."

In his own statement, Deere CEO John May said, “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."

The contract approved Wednesday was broadly the same as an agreement that 55% of members voted down Nov. 2. After that vote, company officials said they would not offer any further wage or benefit increases.

Some union members said in advance of Wednesday's vote that they believed co-workers who had previously opposed the contract would change their minds, facing a winter of picketing duty with only $275 a week in strike pay from the union.

More:Head of largest U.S. labor group tells striking John Deere workers: 'The nation is watching'

The number of workers approving the contract Wednesday increased from the Nov. 2 tally at all of the five Iowa Deere plants, including the Des Moines Works in Ankeny. But none saw a greater swing than Dubuque, where 68% of workers approved the contract Wednesday. Just 36% of members at the construction and forestry equipment plant voted in favor of the first contract.

In Waterloo, the largest local, with about 3,000 members, 44% of members approved the contract Wednesday. While still in the minority, the "yes" votes were up from 29%  Nov. 2.

Among the other Iowa locals: 

• In Ankeny, 64% approved the contract, up from 51%.
• In Davenport, 77% approved the contract, up from 64%
• In Ottumwa, 75% approved the contract, up from 61%

UAW Local 450, which represents the workers in Ankeny, told them to resume their normal shifts at 10:30 pm. Wednesday.

Quieter tone prevails in voting on third contract, workers say

The approval comes after company and union officials met Nov. 11 and 12 to hammer out a third contract. They reached an agreement almost identical to the second contract except for amendments to the company's incentive program. Union leaders said they expect the changes to make performance targets more attainable for employees, boosting the size of weekly paychecks.

UAW members told the Des Moines Register that ratification meetings across Iowa on Wednesday were more subdued than those before the first two votes, when some employees admonished union leaders for failing to extract more concessions from the company.

More:UAW members weigh consequences as they consider whether to reject John Deere's third offer

In Dubuque, Local 94 President Chad Kaiser told members that Deere might shift production to nonunion factories or hire strikebreakers if employees didn't approve the latest proposal. He drew applause when he added that changes to the incentive program should help employees, as well.

Leadership at Local 838 in Waterloo, meanwhile, did not hold a ratification meeting. The group instead assigned workers in alphabetical order to hour-long voting blocs throughout the day. 

At the hall, members said, leaders met individually with any concerned voters to answer questions about the contract. Gone were the heated speeches against the union and the contract that were a hallmark of the first two ratification meeting, held in large, rented venues.

In Ankeny, both supporters and opponents spoke out during a meeting Wednesday. In a video provided to the Register, one member told UAW leaders that the latest changes weren't enough to sway him.

"Do you think it's a good plan for you?" the man asked, addressing the audience.

"No," some members shouted back.

Abe Elam, the sergeant-at-arms at Local 74 in Ottumwa, told workers that the contract was a step in the right direction. He said he didn't believe the union could win greater wage increases or better benefits even if workers stayed out for months.

"This is it," he said. "We've pushed them to that line, and they're not going to give anything else."

Big profits; big concessions

The strike began as Deere celebrated the prospect of record profits, with executives projecting in August that the company would earn $5.7 billion to $5.9 billion for the fiscal year that ended Nov. 1 — a 62% bump over 2013 earnings, the company's previous record year.

Executives will reveal whether they actually hit those targets Nov. 24, when they host an investor call.

May earned $15.6 million in 2020, a 160% increase over his 2019 pay. The raise coincided with his promotion to the top spot but was still lower than the $21.7 million that then-CEO Samuel Allen received the year before. 

Nevertheless, May's pay bump was a rallying point among UAW members, with some displaying signs calling for their own 160% raise. Employees also said they were willing to hold out for more money because they had worked through the height of the COVID-19 pandemic and because managers were struggling to hire new workers. 

More:Union leaders say members lost work at John Deere plant in solidarity with striking UAW

In the first contract introduced in early October, Deere offered 5% and 6% pay increases and reintroduced quarterly cost-of-living adjustments, a feature of previous Deere-UAW contracts that the company had eliminated in 2015. Deere also offered workers $3,500 bonuses if they ratified the contract.

The company proposed a boost to the pension program that would have given a 25-year employee about $100 extra each month in retirement. Deere also offered lump-sum payments of $20,000 to $50,000 for workers when they retire, depending on their length of service. At the same time, the company proposed to eliminate the pension program for workers hired after Nov. 1.

After members rejected that contract, Deere upped its offer. Employees would get 10% pay bumps and ratification bonuses of $8,500. The company also promised to preserve the pension program for future workers and boost payments to retiring employees, giving a 25-year worker about $250 extra every month.

The company threw in a second lump-sum payment for those workers: $2,000 for each year at the company as of 2021. Union leaders told employees that the money is supposed to pay for health insurance until they qualify for Medicare.

The third contract offer retained those terms, adding only the modified production incentives. With its approval Wednesday, workers on the lowest end of the pay grade, such as those in foundry support, will see an hourly wage increase to $22.13 from $20.12. The skilled trades positions at the top of the pay grade, like electricians, will see hourly boosts to $33.05 from $30.04.

Members were split on what to do

Outside of the Palace Theatre at Adventureland Park, where Des Moines Works employees voted Wednesday, members were divided on whether to extend the strike.

Chuck Smith, a welder, declined to say which way he voted. But he told the Register that the company could afford to pay rank-and-file workers better, even though a Deere spokesperson said the company had "economically exhausted" its offers. 

More:Timeline shows key dates in the John Deere strike

Smith pointed out that even in 2015, a down year by Deere's standards, the company earned a profit of $1.9 billion. 

"Look at what they're paying executives," he said. "Look at what they're giving their CEO. It's corporate greed."

But Bob Loney, a maintenance welder, warned that employees would regret a longer strike. Loney has been with the company since before October 1997, when the union and Deere agreed to cut benefits and wages for new hires. That means he is in line for a better retirement plan than most employees at Des Moines Works.

"They're going to push too hard," Loney said of workers. "And Deere's going to push back harder."

More:Polk County judge rejects Deere's request for injunction against Ankeny plant strikers

Dustin Garland, a machinist on the line that manufactures cotton pickers, voted for the contract because he was pleased that Deere preserved the health insurance program.

Garland picked up a part-time job at Amazon.com's Bondurant fulfillment center during the strike, a job he doesn't like as much as his work at Deere. 

Forklift driver Randy Oldham, meanwhile, said he approved the contract Wednesday as he thought about the misery of strike duty in December and January. 

"I'm an old man," he said. "And I don't want to be picketing in the cold."

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.