More than 10,000 John Deere workers will extend their strike into a third week after union members voted down a contract offer that included an immediate 10-percent pay raise and $8,500 ratification bonus.
A statement from the United Auto Workers said unionized Deere workers rejected the contract offer 55 percent to 45 percent. The vote that began the strike in mid-October had a much wider margin.
“The strike against John Deere & Company will continue as we discuss next steps with the company,” the union said in a statement.
The company’s chief administrative officer, Marc Howze, presented the offer as a $3.5 billion investment in John Deere employees and, by extension, their communities “to significantly enhance wages and benefits that were already the best and most comprehensive in our industries,” according to a statement.
The tentative six-year agreement announced Saturday included a 10-percent raise this year, and 5-percent increases in the third and fifth years of the deal, according to a summary of terms put out by the company. In the second, fourth and sixth years, employees would have received a lump-sum payment equal to 3 percent of their annual pay. It also included a ratification bonus of $8,500.
“Even though it would have created greater competitive challenges within our industries, we had faith in our employees’ ability to sharpen our competitive edge,” Howze wrote.
The walkout involves 10,100 production and maintenance employees at 12 facilities and is part of a larger shift in the labor market that has helped propel a wave of strikes and strike authorizations this year. Workers also went on strike at Kellogg’s cereal factories, Nabisco bakeries and Kaiser Permanente health-care facilities. More recently, smaller work stoppages occurred at a Connecticut steel plant over pensions and benefits, and an aerospace supplier in New York over vaccine requirements.
The prolonged strike is occurring amid a perfect storm of economic conditions that have tipped the scales in labor’s favor for the first time in decades. Corporate profits are soaring as the economy emerges from coronavirus-induced doldrums, but companies face a shortage of workers. After decades of concessionary contracts driven by outsourcing and the automation of industrial labor, labor leaders see an opportunity to increase pay and win back long-lost benefits.
In the company’s most recent earnings reported in mid-August, John Deere executives said they expect net sales to be up between 25 percent and 30 percent for fiscal 2021, delivering operating margins of about 20 percent.
Workers are seeing that growth and comparing it to their own pay increases. It’s taken several rounds of negotiation for the company to realize that many of them aren’t satisfied.
“It looks like in this circumstance John Deere thought it had more bargaining power than it does,” said Harry Katz, a Cornell economist who studies collective bargaining. “The company has improved its offer significantly, and it might have to do so again here.”
It’s the latest national UAW vote to reject a contract that the union’s bargaining committee had hashed out with company representatives.
John Deere workers have voted twice to reject tentative agreements from the union and the company. Earlier this summer, striking Volvo workers organized by UAW rejected three tentative agreements.
The labor fight comes on the heels of a long-running corruption scandal that sent numerous high-level UAW officials to prison — including two former union presidents —on fraud and corruption charges for their role in a scheme to steal $1.5 million in union funds and spend it on golf, gambling and other luxuries.
A Department of Justice probe resulted in 15 individuals being convicted on charges of fraud and corruption. The probe resulted in a December 2020 settlement agreement that assigned an independent law firm to continuously monitor possible fraud and corruption, and to ensure that union elections are conducted fairly. The union is undergoing a referendum that could change how it elects its leaders.
A UAW spokesman referred The Post to the union’s previously published statement on the contract offer, and did not address questions about membership’s reasons for rejecting the contract.
Some say the contract rejection has more to do with a workforce that is pressing its advantage after years of concessions.
Chris Laursen, former president of the local union chapter in Ottumwa, Iowa, said he thinks workers were underwhelmed by the lack of improvements to the company’s incentive program. “I don’t think a lot of people wanted to sit through another six years of purgatory,” Laursen said.
Union members at the Ottumwa plant have previously said they want post-retirement health care, a benefit that was stripped away decades ago and wasn’t included in either of John Deere’s recent contract offers.
It’s unclear how quickly John Deere might come back to the negotiating table. In the meantime, workers remain on picket lines in multiple states. A 15-year John Deere worker died after being struck in a crash while walking the picket line outside a Deere distribution center in Moline, Ill., according to a statement from the union. The worker’s name was withheld.