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Updated: Rejected deal was company's 'last, best' offer

Updated: Rejected deal was company's 'last, best' offer

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Tony LeCleir of Davenport, center, and others picket outside John Deere Parts Distribution Center in Milan Saturday.

Deere and Co. says the latest contract offer rejected by the UAW on Tuesday is the company's "last, best, and final offer."

Jen Hartmann, a spokesperson for Deere, said Wednesday the company was proud of its six-year contract offer, which would have boosted pay and benefits for about 10,000 UAW workers.

The UAW rejected the deal 55% to 45%, despite gaining majority support from some Quad-City union locals. The contract was rejected by locals in Waterloo and Dubuque.

The tentative agreement offered improved wages and benefits from the initial agreement, which was overwhelmingly voted down Oct. 10. The six-year contract would’ve covered production and maintenance employees at 12 facilities in Iowa, Illinois and Kansas. The strike will continue without the ratification of the agreement.

Hartmann said Deere informed the UAW that “the ball is in their court.”

“We will be communicating with the UAW and there are conversations happening to make sure that that is understood and clear. We can move toward our first goal to get employees back to work," Hartmann said. "This is certainly a tough time of year for everyone but we would like to see everyone back to work.”

In response Brian Rothenberg, a spokesperson for UAW, said workers are still on strike.

“The elected bargaining team Vice President Browning and the UAW team continue to discuss next steps,” Rothenberg said. “The UAW appreciated the community support of our members on the picket line.”

UAW’s notification system sent a text to members that read “The UAW is aware Deere put out this was our last, best, and final offer. We were never informed directly. Bare (sic) with us as we sort this out.”

A union member at Davenport Works said the last offer didn’t encompass all of the UAW’s demands, but it probably would have been ratified if it was introduced as the first offer.

“I think the company got a little greedy there with that first tentative agreement, and it backfired and it ended up putting us out on strike because the agreement was so awful,” the worker said. “That kind of galvanized a lot of people's frustration for the last 20 years.”

Back on the picket line

Workers returned to the picket lines for Day 20 of the strike in temperatures around 30 degrees. Outside of Davenport Works, union members were quiet this morning. Without burn barrels, which are barred by court order, the picketers said they were cold.

A Davenport Works union member, who voted against the contract, said he prepared financially for the strike, but the amount of savings a worker has can contribute to their feelings about the proposed agreement.

“There are people who obviously didn't save any money and they're already starting to feel the sting after missing a couple of paychecks,” the worker said. “They're pretty eager to get back to work.”

A worker from John Deere Parts Distribution Center in Milan, who voted for the agreement, said they don't talk about their choice to avoid resentment from other local members. The PDC rejected the agreement on a 320 to 288 vote, according to the worker.

December is typically their highest-paying month, the worker said. If they aren't back to work by then, they will miss out on a large portion of income for the year.

“There's more money made in December for me than any other month of the year plus profit sharing,” the worker said. 

The Davenport worker said “lower level representatives” have been publicly disappointed about the outcome of the vote.

“That's kind of sad to see,” the worker said. “These guys preach solidarity all year round. Then when you know the membership speaks, and it's voted down, their reaction was pretty poor.”

Necessary markers for ratification

Workers are still divided on CIPP incentive payments, wage increases, and retirement benefits which is responsible for the vote’s narrow margin and tensions in locals, they have said.

“There is nothing else to bargain,” Hartmann said. “We continue to believe this is a really great offer and because it does even push us into that place where we need to make sure we are competitive… This is the best we are going to do in terms of the wages, benefits, healthcare and retirement that we have to offer employees.”

Both the Milan and Davenport workers expressed dislike towards the CIPP incentive program, which was not changed in the newest agreement. But it was only a deal breaker for some.

Specifically, workers are unhappy with the frequency of payments, high taxation rates on the payments which are received as gifts, and relatively low pay rates, according to the workers.

“CIPP is the thing that has caused turmoil within this company,” the Milan worker said. “The company will never get rid of it because they manipulate to their advantage.”

Also, workers are hesitant about the estimated increased wages within the agreement that are tied to inflation through cost of living adjustments (COLA), which have the potential to change.

“Because we know when push comes to shove in the contract, what's black and white is what's gonna matter,” said the Davenport worker.

Some union members believe that even with COLA, the wages aren’t enough and alternating years between lump sums and payments isn’t enough, especially considering the company’s record profits during the past year. The Milan worker said although wages could be higher, free health care saves workers from a large expense.

For retirement, workers want higher pensions and guaranteed health care benefits, according to the worker. In particular, older workers are concerned about retiring before they are covered by Medicare, which would leave them without coverage for a few years.

“But you still can't get this through people's heads, that this is how it is these days,” the worker said. “It's not pre-1997 deals anymore.”

For the Davenport worker, a change in management style is what worries them the most heading into a new agreement. There was no change in management policies within the new agreement.

“We had much more recognition for our performances and what we did, we had much better communication, there was a lot more respect in and on the floor from management 20 years ago compared to now,” the worker said. “They don't really look at us as the guys who get it done for them, we're just a negative sign on their budget.”

Hartmann said Deere’s workers are valued by the company and their main focus is getting them back to work as soon as possible.

“We have the best employees building the best equipment and they have earned what we have offered in this agreement,” Hartmann said.

Deere plans for the future

After Tuesday evening’s vote, Deere announced that they are moving forward with their customer service continuation plan. So far, the plan involves salaried workers stepping into plant roles to keep production moving.

Hartmann said although Deere’s first priority is to get an agreement ratified, the company needs to start preparing for the future, and everything was on the table.

“I do believe we have to start thinking longer term if that doesn’t happen, looking at each unit and what their needs are,” Hartmann said. “... Everything is on the table in terms of how we keep the business up and running.”

Hartmann said she could not confirm if Deere was considering hiring outside workers to fill union member’s manufacturing roles.

Deere stock closed today at $342.30, down -$0.75 (.22%). Tuesday’s close was at $355.30.

When asked what Deere is telling investors, Hartmann said the company cannot say too much, because the fiscal year just ended and the earnings call will come at the end of the month, so they are in the required “quiet period.”

“We continue to work very closely with our dealers and to make sure that in the midst of what is already a very challenging time for manufacturers .. this additional challenge does not prohibit us from continuing to deliver as best as we can,” Hartmann said.

Hartmann said that the offered agreement would “benefit the entire community.”

The Milan worker said with small adjustments, they think the agreement could be ratified.

“If they want to get us back to work it will just be just that easy to do,” the worker said. “Because right now is the best time to do it. Because you've got people real close. You got this almost split down the middle here.”



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