John Deere, the iconic American manufacturer known for its green tractors and leaping deer logo, is facing intense backlash over its decision to lay off American workers and relocate more of its agricultural equipment manufacturing to Mexico.
Since October 2023, over 1,000 employees at John Deere plants in Iowa and Illinois have either been laid off or pushed into early retirement, with more layoffs expected throughout the year. This has occurred despite the company earning over $10 billion in profit in 2023 and paying CEO John May $26.7 million in total compensation.
The layoffs began at the Harvester Works plant in East Moline, Illinois, where 225 workers were laid off. Similar cuts have taken place in Waterloo and Ottumwa, Iowa, affecting hundreds of workers in these small towns heavily reliant on John Deere for employment. The move to Mexico, which includes shifting production of tractors, cab assemblies, and skid steer loaders, has drawn criticism from employees and union representatives, who accuse the company of prioritising profit over its workforce.
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The layoffs coincide with a broader trend of reduced demand for agricultural equipment as farmers face declining crop prices and rising production costs. In response, John Deere has adjusted its profit outlook for 2024, anticipating a decline in net farm income and fewer equipment purchases by farmers. This has led to further workforce reductions, including 150 layoffs at the Ankeny plant in Iowa and 500 positions cut in Waterloo.
The impact on local communities is profound, as John Deere is often the largest employer in these towns. Waterloo Mayor Quentin Hart expressed disappointment over the layoffs, noting the company's significant philanthropic contributions and the long-standing employment ties many families have with John Deere. Tim Cummings, union president of United Auto Workers 838, urged the company to bring production back to the U.S., highlighting the skills and dedication of the American workforce.
John Deere has committed to providing support for laid-off employees, including Supplemental Unemployment Benefits (SUB), covering up to 95% of weekly net pay for a maximum of 26 weeks, profit-sharing options, and continued health benefits. However, these measures do little to assuage the broader concerns about job security and the economic future of these small towns.
Despite its efforts to streamline operations and cut costs, John Deere's decision to relocate production to Mexico is seen by many as a betrayal of its American roots and a move driven by greed. The company, founded in 1837, has grown into a global powerhouse with 109 factories and offices worldwide, but its recent actions have sparked outrage and uncertainty among its U.S. workforce. As John Deere continues to navigate the challenges of the current economic climate, the repercussions of its layoffs will be felt deeply in the communities that have long depended on the company for their livelihoods.
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