Deere to lay off 600 employees at four factories

  • Article by: GREGORY KARP , Chicago Tribune
  • Updated: August 15, 2014 - 8:21 PM

The farm equipment maker says falling commodity prices have cooled demand for the large equipment.

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A John Deere R962i trailer crop sprayer, manufactured by Deere & Co., stands on display at the Green Week agricultural trade fair at the Messe Berlin exhibition center in Berlin, Germany, on Sunday, Jan. 26, 2014.

Photo: Krisztian Bocsi, Bloomberg

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Deere & Co., the world’s largest maker of farm equipment, said Friday that it will lay off 600 workers at four Midwest agricultural-equipment factories because of declining demand for its products.

Job reductions were signaled earlier this week when Deere cut its earnings forecast for the year and reported that fiscal third-quarter profit fell 15 percent on weaker farm equipment sales. Officials said then that the company would scale back production to be in line with demand for agricultural products.

“It’s just a reflection that our workforce has to flex with how much we’re selling,” said Deere spokesman Ken Golden. “We had added several hundred jobs in recent years in these factories because of increased demand.”

The plants are in Moline and East Moline, Ill.; Ankeny, Iowa; and Coffeyville, Kan., said Deere, which is based in Moline.

Illinois was hardest hit, with 425 layoffs at the East Moline plant, which employs 1,730. Those layoffs begin Oct. 20, a spokesman said. The Moline plant will have 35 layoffs beginning Aug. 25. It employs 710. The company has some 35,000 U.S. employees.

Deere also said Friday that it is implementing seasonal and inventory adjustment shutdowns and temporary layoffs at several of the affected factories. Among those shutdowns is the East Moline plant, which will be closed from Sept. 29 to Nov. 3, a few weeks longer than normal, Golden said. The Moline plant has no similar shutdown.

Employees have been informed at the affected facilities. No other locations were included in Friday’s layoff announcement.

In July, Deere informed employees at its Ankeny facility of an extended shutdown affecting most manufacturing employees at that location. Friday’s announcement places some of the employees at that facility on indefinite layoff. Deere also has implemented a seasonal shutdown affecting most of the manufacturing workforce at the John Deere Ottumwa Works in Ottumwa, Iowa.

The company said this week that while the agricultural economy remains in a “relative healthy state,” falling commodity prices cooled demand for large farm equipment. It said worldwide sales of equipment declined by 6 percent for its fiscal third quarter, with the biggest drops in the United States and Canada.

Deere said industry sales of agricultural and farm machinery are expected to slip 10 percent for the year in the U.S. and Canada, stay flat in Asia and fall 5 percent in the European Union. Sales of tractors and combines are expected to fall 15 percent in South America.

As a result, Deere said it expects worldwide sales of its agriculture and turf equipment to decline 10 percent, vs. 7 percent in its previous outlook.

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