United Auto Workers workers went on strike after the agricultural machinery giant failed to reach an agreement on wages and benefits.
The strike began around midnight central time.
Workers turned down a new six-year collective agreement earlier this week. The UAW said 90% of its members voted against the proposed contract, which would have allowed workers to make immediate increases of 5 to 6%.
The contract, which also included improved benefits, would have covered more than 10,000 workers in 14 facilities across the United States, according to Deere (Ticker: DE).
“Our John Deere members are on strike for the ability to earn a decent living, retire with dignity, and establish fair labor rules,” said Chuck Browning, UAW international vice president, in a statement. “We will continue to negotiate until our members’ goals are achieved.”
The Deere strike – the first since 1986 – follows earlier Interruptions at Kellogg (K) and Mondelez International ‘S (MDLZ) Nabisco and Hollywood production staff. Experts say these strikes point to a coming wave of work actions as workers exerted more leverage during the pandemic.
Deere said operations would continue while talks with the union continued, but added that he had no way of knowing when the strike might end.
“We are determined to reach an agreement with the UAW that will put every employee in a better economic position and continue to make them the highest paid employee in the agriculture and construction industry,” said Brad Morris, Deere vice president of Labor Relations, in a statement early Thursday.
William Blair analysts said they believe the “fundamental picture of the stock will not change much” if the strike is resolved in the short to medium term.
“Of course, there will be unquantified, temporary financial implications that we think Deere can handle and believe that weakness is being used as a good buying opportunity, as history suggests,” added the analyst.
William Blair kept his outperform rating on the stock.
Deere’s shares are up nearly 23% so far in 2021 and more than 38% in the past 52 weeks as crop prices rose, which boosted farm equipment sales. Deere has forecast profits of between $ 5.7 billion and $ 5.9 billion for fiscal 2021.
The stock was up slightly on Thursday after falling 2.2% in the pre-trading session. the
gained 1.5% and 1.6% respectively.
Write to Joe Woelfel [email protected]