The UAW had reached a tentative agreement on a new six-year contact with the company two weeks ago, only to see 90% of ordinary members of the union oppose it in a ratification vote closed last Sunday. Union and management negotiators spoke late into the night Wednesday trying to reach a new deal but were unable to do so.
This is the largest private sector strike nationwide since a costly six-week strike against the UAW General Motors (GM) two years ago. And it continues a recent trend of workers flexing more muscles as the dynamics of the labor market move more towards them and away from employers. Companies are struggling to find the workforce they need to fill a new record number of job openings. There has also been a record high number of workers who have left their jobs.
Last week 1,400 members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike against Kellogg, closing factories producing brands of grain such as Rice Krispies, Raisin Bran, Froot Loops, Corn Flakes and Frosted Flakes.
And early Wednesday, the International Alliance of Theatrical Stage Employees – representing technicians, artisans and craftsmen in the entertainment industry – announced that it had set a strike deadline for early Monday morning if they could fail to sign a new contract with the Alliance of Film and Television Producers for 60,000 film and television workers. The union said 98.6% of members would have voted to allow a strike if there is no new agreement by then.
However, the U.S. Department of Labor reports that the number of strikes this year has actually decreased compared to the same period in 2019, the year before the Covid-19 pandemic rocked labor markets.
Overall wages have risen as it appears that employers – both unionized and non-unionized – are more willing to give workers what they want to keep them in the job.
Good times at Deere
The strike at Deere & Co., the official name of the company popularly known as John Deere, closes the operations of eleven factories in Illinois, Iowa and Kansas and three distribution centers in Georgia, Illinois and Colorado. The company manufactures both agricultural and construction machinery. The demand for his products was strong.
The company announced in August that it would be available for the remainder of this fiscal year ending Jan.
The denied contract for UAW members at John Deere would have given them an immediate 5% to 6% increase in their base salary and additional wage increases later in the contract that could have increased the average wage by roughly 20% over the six years of the denied deal. It also eliminated a second lower pay grade for some of the company’s newer hires, raising them to pay other UAW members.
The average production worker at Deere made about $ 60,000 last year and was able to exit that contract with a profit of about $ 72,000.
Features of the denied contract included the return of a cost of living adjustment – once a common feature of union contracts that has become rare in recent years. But it could have been lucrative at a time when inflation is at levels not seen in decades. It also included improvements in benefits, including an expanded retirement bonus of up to $ 50,000.
But unlike the last two UAW deals at Deere, which were negotiated during difficult times for the company, these negotiations came at a particularly convenient time for the company.
That might have made it more difficult to reach an agreement that would include membership. The recent financial success at Deere may have led some union members to believe they deserved an even better package than the rejected one, especially after less lucrative deals in the past.
Deere’s revenue for the first three quarters of fiscal year increased to $ 32.7 billion, an 11% increase over the same pre-pandemic 2019 period. Net income rose to a record $ 4.7 billion, up 84% on the same basis. The company was able to do this while addressing many of the supply chain issues that haunt the auto industry, and it was able to raise its guidance for full year earnings up to $ 5.9 billion.
The company also retired last year as the number of unionized jobs at Deere increased 19% since November 1, 2020.
Shares in deer (FROM) have risen by 23% since the beginning of the year, although the closing price on Wednesday was 16% below the level at the beginning of September.