Deere strike set to continue as workers reject second contract

Nov 3 (Reuters) - Deere & Co (DE.N) workers were set to continue their three-week-old strike on Wednesday after they voted to reject a second contract reached between the U.S. tractor maker and the United Auto Workers (UAW) union that bumped up wages and bonuses.

Shares of Deere were down 2.6% in early trade.

The strike will continue after 55% of the workers voted down the agreement, UAW had said on Tuesday. The union added on Wednesday it was too early to comment on its next steps.

Workers at 12 facilities in Illinois, Iowa and Kansas rejected the second tentative agreement, prolonging the first strike against the Illinois-based company by the UAW union since 1986, which had lasted for 163 days.

Deere would have invested an additional $3.5 billion in its employees through agreements reached with UAW, Deere Chief Administrative Officer Marc Howze said. It has forecast net income between $5.7 billion and $5.9 billion this year.

The Deere & Co farm equipment plant in Ankeny, Iowa, U.S. October 20, 2021. REUTERS/Scott Morgan

The world's largest farm equipment maker added it will execute the next phase of its "Customer Service Continuation Plan". It did not immediately elaborate on the details.

Deere has already implemented "cross-training" -- or training salaried employees in production -- to mitigate the loss of output due to the strike, a person familiar with the matter said.

But brokerage Barclays, using geolocation data, noted Deere's Construction and Forestry facilities witnessed the biggest drawdown in activity during the strike.

The latest contract would have provided a 10% rise in wages this year, 5% in 2023 and 2025, as well as lumpsum bonuses amounting to 3% of their pay for 2022, 2024 and 2026, according to UAW.

This was an improvement to last month's contract offer, which was rejected overwhelmingly by the workers, who then went on strike.

Reporting by Juby Babu and Abhijith Ganapavaram in Bengaluru; Additional reporting by Radhika Anilkumar and Kannaki Deka; Editing by Shounak Dasgupta and Krishna Chandra Eluri Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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