John Deere and UAW reach new 6-year deal, ending month-long strike
After a month of tension, debate and severe slowdowns at John Deere production and parts facilities, more than 10,000 John Deere workers will be back to work this week. Members of the United Auto Workers (UAW) Union approved a new six-year deal on Wednesday, with a 61% vote of approval.
According to KWWL in Waterloo, Iowa, 39% of the members voted against the new contract. The six-year agreement includes:
- $8,400 signing bonus
- 20% increase in wages over the lifetime of the contract with 10% this year
- Return of cost of living adjustments
- Enhanced retirement options
- Enhanced CIPP performance benefits
The agreement was the third attempt since the strike started on Oct. 14.
Reports say Waterloo members voted down the new plan, with 56% voting against the new agreement. Waterloo is home to John Deere Tractor Works.
Both the Union and John Deere released statements after the vote voicing their approval of the compromise.
"The sacrifice and solidarity displayed by our John Deere members combined with the determination of their negotiators made this accomplishment possible," said UAW Vice President Chuck Browning. "They have started a movement for workers in this country by what was achieved here today and they have earned the admiration and respect of all that strive for what is just and equitable in the workplace."
"I’m pleased our highly skilled employees are back to work building and supporting the industry-leading products which make our customers more profitable and sustainable," said Deere Chairman and CEO John May in a separate statement.
Prior to the vote, UAW said the agreement included "modest modifications" to the previously rejected proposal. The new agreement covers Deere workers at 12 facilities across Iowa, Illinois and Kansas.
According to Pro Farmer Washington Correspondent Jim Wiesemeyer, Deere's prior offer included an immediate 10% increase in hourly pay and an $8,500 bonus for each worker. It also included additional 5% pay raises for 2023 and 2025 and lump sum bonuses in three other years. Deere said that offer represented a $3.5 billion investment in compensation for the workers.
When the UAW John Deere members went on strike in October, some analysts said the strike could last for months. The strike was the biggest private-sector labor strike in more than two years.
Bidding War for Used Equipment
While the resolution is good news for farmers still in the fields harvesting, as well as those trying to source parts and planters for spring, veteran used equipment value insider Greg Peterson, also known as Machinery Pete, warns farmers that both the John Deere strike and the recent issue of sourcing semiconducters by CNH could push used equipment values higher.
“All this, of course, works to push potential buyers back into the used market, which as I said from the top, and as I’ve been saying all throughout 2021 … the USED MARKET IS ON FIRE,” he wrote in a blog post.
Machinery Pete told Bloomberg this week that wild bidding wars in the used equipment sector have already erupted. The John Deere strike was almost a match that caused the bidding war to catch on fire, he says.
Machinery Pete’s Quarterly Used Values Index produced for Wall Street soared to 9.5 in the third quarter, which rivals the record highs he documented during the previous high nearly a decade ago. The index soared 22% during the first nine months of 2022, and it's on track to see the biggest gains in the final quarter of the year.
“In fact, 16 of the past 18 years, used farm equipment values have gone up during the fourth quarter,” he adds.
Machinery Pete described it as a “tidal wave coming,” saying decades of reporting on the used equipment market has found the highest values at auction occur in November and December.
