A continuing decline in farm equipment sales will idle more than 900 employees of Deere & Co. in Iowa and Illinois over the next two months, including 565 in Waterloo.
Moline, Ill.-based Deere on Friday termed the actions “workforce adjustments,” including indefinite layoffs at five locations that build agricultural equipment. In addition to the Waterloo employees at three locations, Deere said 300 will be idled at the Des Moines Works in Ankeny and 45 at Harvester Works in East Moline, Ill.
The layoffs will begin in early February and most will be effective in late March.
The latest Deere furloughs come after the Waterloo plant laid off 460 employees in October, primarily in two areas — tractor cab assembly operations (about 240) and drivetrain operations (about 195).
Deere manufactures medium and large row crop tractors, cab assemblies, marine and industrial diesel engines, drivetrain components, wheel assemblies, gray and ductile iron castings, and tractor parts and components in Waterloo.
United Auto Workers Local 838 represents bargaining unit employees of Deere's Waterloo plants. While declining to comment on the latest layoffs, a spokesman who declined to be identified said it plans to reach out to affected members to offer assistance.
The union spokesman also said it was impossible to provide a pay range for those affected by the layoff, citing the different employment classifications and tenure that influence how much a union member is paid.
The UAW master contract with Deere covering all the company's plants in Illinois, Iowa and Kansas will expire on Oct. 1, 2015.
A total of 93,500 people were employed in the Waterloo-Cedar Falls metropolitan statistical area in November, according to Iowa Workforce Development. Of that number, about 12,700 worked in durable goods manufacturing.
The latest layoff at Deere's Waterloo facilities would affect 0.59 percent of those employed in the Waterloo-Cedar Falls area and 4.3 percent of residents working in durable goods manufacturing. Waterloo-Cedar Falls had a 4.5 percent unemployment rate at the end of November.
Lower corn and soybean prices have affected farmer purchases of two- and four-wheel-drive farm tractors and combined industrywide. Corn prices have fallen from an average $6.89 a bushel in 2012 to $3.65 a bushel. Soybean prices have dropped from $14.40 a bushel in 2012 to $9.50 a bushel.
Gov. Terry Branstad said corn prices are depressed because the U.S. Environmental Protection Agency has not maintained a robust federal Renewable Fuels Standard.
“When the price of corn gets below the cost of production, farmers are reluctant to purchase (equipment),” Branstad said Friday, reacting to the Deere layoff announcement.
A total of 425 four-wheel-drive farm tractors were sold in December, down 49 percent from 834 in the same month of 2013, according to the Association of Equipment Manufacturers, which tracks farm equipment sales on a monthly and annual basis.
Sales of self-propelled combines dropped 40.4 percent to 760 in December 2014 from 1,275 in December 2013.
For all of 2014, four-wheel-drive farm tractor sales were down 26 percent and combines sales were off 25.7 percent from 2013.
Deere said about 500 employees at Deere's Seeding and Cylinder facility in Moline will go on an extended inventory adjustment shutdown. The plant typically has a seasonal inventory adjustment this time of year.
The seeding and cylinder shutdown is expected to end in late summer.
Deere has added 220 jobs at construction and forestry factories in Davenport and Dubuque. The company said nearly all of the positions have been filled by individuals who had been working for Deere at other locations, but were laid off in October.
The latest layoffs at Deere's Waterloo plants have revived memories of the 1980s farm crisis that slashed employment at Deere and other farm implement makers.
On Nov. 1, 1982, 1,300 Deere employees were laid off indefinitely at three Waterloo plants. An additional 400 workers were placed on indefinite layoff on Nov. 22, 1982.
Another 3,800 employees were affected by a March 14 to March 27, 1983, shutdown, as Waterloo needed time to rework the lines and reduce dealer inventories. On Aug. 27, 1984, 642 of 6,300 wage employees at three Waterloo factories, were laid off due to high interest rates, the 1983 drought, and poor overseas trade.
