Farm equipment manufacturer John Deere has announced another round of layoffs due to the slowing American economy and a reduction in demand that is prompting them to shift their production to Mexico.
The company, which is the top seller in the world of tractors and crop harvesters, has given 610 production staff at its Iowa and Illinois plants their walking papers. The layoffs will reportedly take effect at the end of August.
The layoffs come not long after the company announced that it will be moving production of compact track loaders and skid steer loaders from Dubuque, Iowa, to Mexico within the next few years in the wake of increasing domestic manufacturing costs.
Last fall, the company laid off 225 employees at their East Moline plant, and they have already laid off hundreds of workers at other locations this year. For example, 500 employees have been laid off from their Waterloo plant in Iowa, while 150 were laid off at a facility in Ankeny, Iowa, in March. Another 34 employees at their Moline cylinder works factory got their walking papers in May. In total, more than 1,000 John Deere workers have been laid off or sent into early retirement in Illinois and Iowa since October, and additional layoffs are expected to be announced later this year.
A statement from the company noted: “We can confirm Deere leadership recently communicated that rising operational costs and declining market demand requires enterprise-wide changes in how work gets done to achieve our goals and best position the company for the future.”
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Employees accuse John Deere of greed
John Deere is being accused of greed with the cost-cutting measures; they brought in more than $10 billion in profit last year, while CEO John May took home $26.7 million in total compensation.
One longtime employee at the company’s Harvester Works plant in East Moline said: “We get wind of more layoffs daily, it seems, and it's causing uncertainty all over. The only reason for Deere to do this is greed.”
Waterloo has been particularly hard hit. John Deere employs 5,200 people there and is its largest employer. The recent layoffs of 500 workers there across multiple facilities, combined with the company moving its tractor and cab production to Ramos, Mexico, has left residents “disappointed and upset,” according to Mayor Quentin Hart. He added that it has been “a challenge for the local community,” where many people have relatives going back decades who have worked for the company. He added that it has a significant philanthropic presence there.
The union president of the local United Auto Workers 838 chapter, Tim Cummings, spoke out against the Waterloo layoffs, saying: “I urge John Deere to stop outsourcing and bring these products back to our factories and allow our talented workforce to produce these products at home where they are used by North American farmers and businesses.”
Another affected area is Ottumwa, Iowa, where John Deere has a factory that produces mower conditioners. They announced that this production would be moving to Monterrey, Mexico, and then laid off employees who were not willing to take an early retirement offer.
One of the factors contributing to an excess of unsold tractors is reductions in crop prices and its effect on farmers. This has prompted some equipment sellers to suspend new orders and provide discounts.
The economic problems facing the agriculture industry are unlikely to improve any time soon, with the U.S. Department of Agriculture forecasting a 25.5% drop in farm income compared to last year's levels. John Deere has reportedly revised its profit forecast downward twice so far this year due to expected sales declines.
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