Agricultural economy leads to John Deere layoffs - KWWL - Eastern Iowa Breaking News, Weather, Closings

Agricultural economy leads to John Deere layoffs

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(KWWL) -

Deere & Company announced 115 layoffs in Waterloo at the Waterloo Works facility. Experts say the simple explanation is adjusting production to meet demand. 

Last week, John Deere announced third quarter earnings were down yet again making this the 10th consecutive quarter John Deere has seen a decrease in sales. Deere says weakness in global markets for for farm and construction equipment had lead to a decline in sales and net income. 

The CEO said Deere continues to perform well in the face of challenging market conditions.

After a period of continuous growth over the past few years, experts say Deere and other agricultural equipment manufacturers are now sitting on high inventory with a demand that just isn't there.

"We have grain prices right now that are about half of what they were five or six years ago," said Secretary of Agriculture Bill Northey. "While we were seeing good demand for machinery at that time, we see farmers trying to economize right now and buying less machinery. That's one of the reasons we're seeing slower demand, and therefore slower demand or need for production of machinery." 

The layoffs did not come as a surprise for President of the local 838 United Automobile Workers Union Tom Ralston. 

"I don't think they were a surprise," said Ralston. "It's always shocking when it happens. Disappointing, but we all know the agriculture economy is weak. And when the agriculture economy is weak so is John Deere's sales of tractors."

Ralston says he's been working with the laid off employees from the moment the announcement was made this morning.

Unlike Deere's temporary-layoffs, John Deere says these layoffs are indefinite. 

Ralston explains the temporary-layoffs are usually prompted by a shortage of parts to build tractors or a supplier having issues. 

"This is them making a business decision that they're not going to have the tractors to build to support the workforce," said Ralston. 

Secretary Northey says he's hopeful that the agricultural economy will improve, but it could take a couple years before the demand picks back up again.

The layoffs are effective September 23rd.

30 employees will also be laid off in Davenport.

The company says in both cases, layoffs are being determined by seniority. This comes exactly one month after 120 production employees were told they would be laid off at John Deere Harvester Works in East Moline, Illinois.

Two years ago today, Deere announced a much larger layoff in Waterloo letting go 460 employees. 

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