John Deere employees at the Iowa picket line.
Scott Olson via Getty Images

John Deere announced Saturday that he and the United Auto Workers union had reached an initial agreement for a new contract. This could end a major strike.

Although the union didn’t release any details, it said that the strike would continue as members decide whether to ratify the agreement. Chuck Browning, a vice president for the UAW, said in a statement that the deal included “enhanced economic gains and continues to provide the highest quality healthcare benefits in the industry.”

John Deere spokesperson confirmed that an agreement was reached.

Nearly 10,000 people work in 14 locations went on strike Oct. 14 after rejecting a deal reached between the company and the union’s bargaining team. The Union’s bargaining team rejected a deal. 90% of the membershipThe union was sent back to bargaining after it voted against the ratification of the contract.

Worker could still vote against the contract, or continue to work without pay in the hopes that a better deal is offered. Browning’s statement sounded an optimistic note that the latest deal would be more acceptable.

“The negotiators focused on improving the areas of concern identified by our members during our last ratification process,” he said.

A vote is likely to happen sometime in the coming days, after the union’s local affiliates have walked members through the details of the agreement.

The last six-year tentative agreement between the unions and the company was criticized by workers. As a result, the average annual wage increase was around 2%. This would still be below inflation and the company wanted the end of defined-benefit retirements.

Workers at Deere have said they want to eliminate the “two-tier” compensation system that was established in 1997 and gives newer employees lesser benefits than their legacy counterparts. Deere’s proposal to eliminate pensions moving forward would have created yet another tier within the workforce.

The overwhelming vote against ratifying that contract was a repudiation by workers of both the company and the UAW, which has suffered from an embarrassing corruption scandal that’s led to more than a dozen guilty pleas by union officials.

Deere workers were able to take advantage of many favorable factors, which led them to decide on a strike. High agricultural commodity prices have led to increased sales and strong demand in farm and construction machinery. Deere had already set record annual profitsin the first three-quarters of this year. A prolonged strike would hurt the company’s ability to capitalize on a favorable market.

Meanwhile, many employers like Deere are having a hard time retaining workers in a tighter-than-expected labor market during this part of the pandemic.

Deere’s strike is the biggest in America’s private sector since General Motors employees walked out of the job in 2019.


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