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

Tyler Jett
Des Moines Register

DES MOINES, Iowa — United Auto Workers members approved a new six-year contract with Deere & Co. Wednesday, ending a five-week strike of the agriculture and construction machine maker.

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

The vote comes after the 10,100-member union rejected two previous contracts proposed by Deere and the UAW, setting off the first strike of the company since 1986.

"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."

About 61% of voters approved the latest agreement, according to UAW Local 450, which represents about 1,000 workers at the company's Ankeny plant. Workers had rejected two previous proposals over the last six months.

The local also announced that workers would return to their shifts beginning at 10:30 p.m. Wednesday.

Since Oct. 14, about 10,100 workers in Iowa, Illinois, and Kansas had been on strike.  The workers voted down previous six-year contract proposals on Oct. 10 and Nov. 2.

After the first rejection, in which nine out of 10 members voted against the contract, the company doubled its wage offer to 10%, boosted retirement benefits and preserved the pension program it had previously planned to cut for new hires.

UAW members come and go from the Adventureland Palace Theatre, where they voted on a third proposed contract with Deere & Co., the makers of John Deere products, on Wednesday, Nov. 17, 2021, in Altoona.

After workers rejected that proposal, company and union officials met to hammer out another contract. The third deal was almost identical to the second, except Deere executives amended elements of the company's incentive program.

Union leaders hope the changes will make performance targets more attainable for employees, allowing them to earn bonuses in their weekly paychecks more quickly and often.

Ratification meetings across Iowa were more subdued Wednesday than they had been before the first two votes when some UAW members admonished union leaders for failing to extract more concession from the company.

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

Big profits. Big concessions.

The strike came as Deere celebrated the prospect of record profits, with executives projecting in August that the company would earn $5.7-$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.

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

More:Iowa Poll: Majority of Iowans support Deere workers over the company as strike enters second month

Nevertheless, May's big pay bump was a rallying point among UAW members, with some displaying signs asking 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 pandemic, when some other companies slowed or halted production, and knew Deere was struggling to hire in a tight labor market.

In the first contract introduced in early October, Deere offered 5% and 6% pay increases and re-introduced 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 every month upon retirement. Deere also offered lump-sum payments of $20,000-$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.

UAW members come and go from the Adventureland Palace Theatre where they're voting on a third proposed contract with Deere & Co., the makers of John Deere products, on Wednesday, Nov. 17, 2021, in Altoona.

After members rejected the 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.

Under the contract approved Wednesday, workers on the lowest end of the pay grade, like 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 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 Des Moines Register, part of the USA TODAY Network, that the company can afford to pay rank-and-file workers better, even though a Deere spokesperson said the company had "economically exhausted" its offers last week. 

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 workers may 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 employees. 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," he said of the co-workers voting against the contract. "And Deere's going to push back harder."

Dustin Garland, a machinist on the company's cotton pickers, voted for the contract because he was pleased that Deere preserved the health insurance program in which he pays no premium. 

Garland picked up a part-time job at'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 because he knows how miserable strike duty in December and January would be.

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