WATERLOO, Iowa (KWWL) - As negotiations continue between John Deere and the UAW union, an economics professor says the union should be in the driver's seat.
"Labor knows there aren't a lot of people who are taking those jobs," Professor Peter Orazem said, an econ. professor at Iowa State.
Orazem says the labor shortage in many industries across the country means Deere has an incentive to keep the staff it already has.
"Typically, strikes don't last very long during relatively strong labor markets. The company has an incentive to settle because they don't want to be left on the sideline," Orazem said.
He also thinks the union will point to John Deere's success in the last year to argue the ag. giant is in a position to pay them more. While Deere was announcing layoffs in the summer of 2020, its stock price has more than doubled since then. Deer & Co. was trading at $137 per share on 5/3/2020 but on Tuesday it was trading for $330, according to Market Watch.
"I think labor correctly assumes that John Deere is in a position to offer a little bit more," Orazem said. "The market for farm implements wasn't very strong...but a lot of that has changed in a very short time."
The most recent tentative agreement between the UAW and Deere failed with 93% opposition at the Waterloo local 838 on Sunday night. The parties extended their old contract three more days to Wednesday at midnight. If they cannot reach an agreement, the locals say they will strike Thursday morning.
Employees tell KWWL they are fighting for lower copays on health insurance, higher wages and better retirement benefits. The Region 4 UAW office has not responded to our request for comment.