by Whitney Flach
On June 3, Deere & Company announced that the majority of production employees at the John Deere Ottumwa Works would be laid off until later this year to ensure that factory production is aligned with market demand. The John Deere Ottumwa Works manufactures balers, mower conditioners, windrowers, and pull-type forage harvesters used by hay and livestock producers.
The CEO said, Deere continues to perform well in the face of challenging market conditions. President of the local 838 United Automobile Workers Union Tom Ralston said, “We all know the agriculture economy is weak. And when the agriculture economy is weak, so is John Deere’s sales of tractors.”
Almost 500 worker went on indefinite layoff effective June 29th while the remaining 195 would face periodic inventory adjustment layoffs throughout the next several months. John Deere Ottumwa Works said that the market conditions would define when employees could return to work. The layoffs are based on seniority with the company. 30 employees will also be laid off in Davenport, and about one month ago 120 production employees were laid off at John Deere Harvester Works in East Moline, Illinois.
Last week, John Deere announced third quarter earnings were down yet again making this the 10th consecutive quarter John Deere has seen a decrease in sales. Deere says weakness in global markets for farm and construction equipment have lead to a decline in sales and net income. Secretary of Agriculture Bill Northey gave perspective by saying, “While we were seeing good demand for machinery at that time, we see farmers trying to economize right now and buying less machinery. That’s one of the reasons we’re seeing slower demand, and therefore slower demand or need for production of machinery.”
Two years ago, Deere & Company at the Waterloo Works facility announced a layoff in Waterloo letting go of 460 employees. Recently, the company announced 145 layoffs in Waterloo effective September 23rd. 115 people from this layoff will be indefinite. Temporary-layoffs are usually prompted by a shortage of parts to build tractors or a supplier having issues. This simple explanation for this layoff is, Deere is adjusting production to meet demand. After a period of continuous growth over the past few years, experts say Deere and other agricultural equipment manufacturers are now sitting on high inventory with a demand that just isn’t there. Ken Golden, a Deere spokesman, said the company continues to adjust the size of the company’s production workforce to meet market demand for products manufactured at each of its factories.
Secretary Northey, says he’s hopeful that the agricultural economy will improve, but it could take a couple years before the demand picks back up again.