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Deere contract protects employees against layoffs.

Deere contract protects employees against layoffs

Employees of Deere & Co. ratified a contract negotiated by the United Auto Workers, ending a more than 5-month work stoppage. Deere, the world's largest producer of farm equipment, had generally followed the pattern set by Caterpillar Inc., but was apparently reluctant to do so this time because Caterpillar is primarily engaged in production of construction equipment which has had a healthier market recently than farm equipment.

The accord runs to September 30, 1988, matching the expiration date of the union's contract with Caterpillar. It does not provide for any specified wage changes. However, all employees on the payroll or on temporary layoff on August 23, 1986, received an immediate $735 lump-sum "recoupment allowance.' Employees will be eligible for possible quarterly pay adjustments under the cost-of-living formula, which was continued subject to diversion of a total of 23 cents an hour over the term to help meet the cost of the settlement. Also, all but about 0.5 percentage point of the 38.2-percent cost-of-living float accrued under prior contracts was incorporated into base pay rates, resulting in increases in insurance benefit levels that vary with pay rates.

A major provision of the contract is a new Protected Employee Group program patterned after one adopted at Caterpillar in 1986. It protects 90 percent of employees in current jobs from layoffs resulting from volume reductions, economic conditions or marketplace changes, "sourcing' decisions, new technology, productivity improvements, or consolidations of operations. The job guarantees do not apply to temporary layoffs of up to 6 weeks, job reductions resulting from labor disputes, sale of part of the company's operations as an ongoing operation, a complete plant closing, or job cuts resulting from events beyond the company's control.

A new joint Employee Development and Training Program will cover training, retraining, skill development, and personal development. It will be funded by up to 8 cents of the money subject to diversion from possible cost-of-living pay adjustments.

Pension changes included an increase in the maximum earnings level under the "formula' method for calculating benefits, resulting in a maximum monthly benefit of $39.33 for each year of service for 30-year employees. Under the alternate "minimum' formula (used if it results in a larger benefit), the calculation rate was increased to $22.05 a month for each year of service, from $19. Pension rates also were increased for current retirees and those who retired prior to June 1, 1986, will receive two lump-sum payments, each ranging up to $200.

Deere's financing of Supplemental Unemployment Benefits was increased, in three stages, to 9 to 19 cents per compensated hour, from 5 to 15 cents.

Improvements in the profit-sharing plan included an increase in the payouts for each step-up in the level of profits and a change in the payout calculation formula to a percentage of pay rates (from a cents-per-hour approach) to provide some protection against inflation.

Other terms included a new tax deferred savings plan enabling workers to invest $10 to $134 of their weekly earnings in any of three funds; an additional paid holiday; increased shift differentials (to 60 cents an hour, from 54.1 for the second shift, and to 90 cents, from 78.9, for the third shift); transfer, pension, and other types of protections for employees offered jobs by a new joint venture company being formed in Waterloo, IA, by Deere and General Motors Corp.'s Detroit Diesel Allison Divison; and improvements in the health care and prescription drug plans.

The accord covers 12,000 active employees and 10,000 on layoff at nine plants in Iowa and Illinois and warehouses and parts depots in Denver, CO, Atlanta, GA, East Moline, IL, Minneapolis, MN, and Memphis, TN. The 159-day stoppage eclipsed the 110-day stoppage in 1950 as the longest in company history.
COPYRIGHT 1987 U.S. Bureau of Labor Statistics
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Publication:Monthly Labor Review
Date:Apr 1, 1987
Previous Article:USX contract ends 6-month strike.
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