Deere Reports Record Profits Then Lays Off Factory Workers
February 13, 2014
Just a day after reporting record quarterly profits, Deere and Company has announced layoffs at its combine plant in the Quad Cities. Spokesman, Ken Golden, says about 120 jobs will be cut at the John Deere Harvester Works in East Moline. He says the company must continue to match the size of the workforce with demand. "We have projected that ag equipment sales in North America will decline by 5-10% this year, and all our global markets show a decline...Making these announcements about layoffs is never easy. It's always tough."
About 2,000 people work in production at the Harvester Works, and the layoffs will be based on seniority. Golden says, "I think people take these jobs knowing they'll be the first to be laid off if the markets turn negative. I hope, even though these layoffs are indefinite, that we'll be able to hire some of these workers back if the markets do change."
He also says over the last three years, Deere has added 450 jobs at the Harvester Works. Total employment at Deere's East Moline combine plant is currently around 2,800. The layoffs will take effect on March 31st.
(Earlier story about Deere earnings)
Deere and Company will make a lot of money this year, just not quite as much as last year. On Wednesday, the company reports earnings of $681 million in the first quarter, or $1.81 per share up from $1.65 a year ago. Spokesman Ken Golden says it's the 15th quarterly earnings record in a row, year over year. Worldwide sales rose 3% to $7.6 billion. And income increased across all the company's divisions in November, December, and January.
This year, Deere factories in the US will begin installing new engines with improved technology, to comply with new emissions standards. Golden says the process is time-consuming, so production of large equipment will drop. For example, he says employees at John Deere Harvester Works in East Moline are making the switch now.
The company also expects ag equipment demand to drop this year, because farm income is projected to decline from last year's record high. Golden says Deere now predicts farm equipment sales will decline six percent in the second quarter, and three percent for the year. Deere and Company has not changed its profit projection for the year. It still expects to earn $3.3 billion.
(Photo source: Deere.com)