John Deere Layoffs: What’s Happening and Why?
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- Опубликовано: 6 сен 2024
- In this video, we delve into the recent series of layoffs announced by John Deere and explore the reasons behind these workforce reductions. John Deere, a leading manufacturer of agricultural machinery, has faced significant challenges recently, leading to tough decisions impacting numerous employees. Let's break down the timeline and reasons behind these layoffs, understand the broader industry trends, and see what the future might hold for Deere and its workforce.
Timeline of Layoffs
September 20, 2023 - East Moline, IL, John Deere announced the layoff of 200 employees at its East Moline facility, which builds combines. This factory spans 3 million square feet on 71 acres and is a crucial site for Deere’s operations.
March 12, 2024 - Ankeny, Iowa, on this date, Deere targeted 150 employees for layoffs at its Ankeny plant, which produces sprayers and cotton pickers. This move marks the beginning of a series of workforce reductions in 2024.
March 26, 2024 - Waterloo, Iowa, a significant reduction occurred with 308 employees laid off at Waterloo, where Deere manufactures 7, 8, and 9 Series tractors. Waterloo’s total employment exceeds 5,000 workers, making this a substantial cut.
April 16, 2024 - Racine, WI (Case New Holland), it’s not just John Deere; CNH also announced layoffs of 200 employees at its Racine factory, where they produce Magnum Series Case Tractors and larger New Holland models.
May 8, 2024 - Moline, IL, John Deere laid off 34 employees at its Cylinder Works facility in Moline.
May 20, 2024 - Waterloo, Iowa, further layoffs hit Waterloo, with 190 employees losing their jobs.
June 5, 2024 - Moline, IL, another round of layoffs affected 120 workers at Deere’s Seeder and Cylinder plant in Moline.
June 6, 2024 - Urbandale, Iowa, Waterloo, and Ankeny, Deere announced the reduction of 100 employees, impacting 58 at Urbandale, headquarters of Deere’s Intelligent Solutions Group, 49 at Waterloo, and 16 at Ankeny.
July 1, 2024 - Davenport and Dubuque, Iowa, a significant layoff impacted 211 workers at Davenport and 99 at Dubuque. The Davenport facility manufactures skidders, wheeled feller-bunchers, four-wheel-drive loaders, articulated dump trucks, and motor graders. The Dubuque plant produces large-frame skid steer and compact track loaders, backhoes, utility, construction, and production-class crawler dozers, crawler loaders, and knuckleboom loaders.
July 10, 2024 - Waterloo, Iowa, another significant reduction came with 345 employees being laid off, set to take effect in late September.
Several factors contribute to these layoffs at John Deere:
Decreased Farm Income, the USDA predicts a significant decrease in farm income, potentially down by 25% in 2024. Lower income for farmers translates to reduced purchases of new equipment, directly impacting manufacturers like John Deere.
Also, John Deere is feeling the squeeze on profits. Despite reporting a net income of $10.1 billion last year, the company has only made $4.1 billion in the first two quarters of this year, indicating a downtrend in profitability. The United Auto Workers (UAW) strike, which ended in November 2021, resulted in a new six-year deal with significant concessions. The strike's resolution brought about increased labor costs, impacting Deere's financial planning and workforce management.
The agricultural equipment market experienced a boom following the Russian invasion of Ukraine, which drove up commodity prices and equipment demand. However, as market conditions normalize, Deere is adjusting its workforce to align with current demand levels.
The shift of some production lines to Mexico has garnered negative publicity for Deere, but they're not the only manufacture involved in that trend. . We’ll cover that in our next video and call out some other companies that are expanding their manufacturing footprint in Mexico.
Hashtags: #JohnDeere #Layoffs #AgriculturalEquipment #FarmIncome #UAWStrike #Manufacturing #WorkforceReduction #IndustryTrends #CaseNewHolland #EconomicChallenges
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John Deere made $10 billion in net profits. They gave executives $100s of millions in bonuses, and over $7 Billion in stock buybacks, which increase share prices and greatly benefit major stock holders. Like executives, CEO, equity firms, etc...
You are correct but some additional information needs to be mentioned. John Deere's debt is at $63 Billion dollars meaning that, because the economy is tanking, they need to stabilize for the future downturn, not what they earned previously. In my industry, people are starting to pull back on their spending and pinching their pennies which means we're not in a good place. Retail sales are down and shops are closing--even flea markets and antique stores which shouldn't happen because of their lower prices. Since supply is up for tractors, they can't keep pushing out products in this market and expect to pay debt so the laborers aren't necessary. It might sound callous but it's just a fact.
I always say, if you want to complain about CEO bonuses then become the CEO and make that change, deny your bonus. If you want to complain about stock holders, then become a stock holder and make that change. There are enough complainers out there that they could have their own index fund and vote in/out the board of directors to direct the ship but you know what, it will never happen. Complainers aren't doers.
@@fastrivers812 Dead on assessment. CEO is doing exactly what he is paid to do. Making big moves to protect the company and the investors.
@@fastrivers812 deadon assessment.
@@fastrivers812 "Complainers aren't doers". Hmm, so those who advantage themselves at a cost to others are virtuous? So putin is actually a hero, I guess??
And the whole not bringing down company debt while giving themselves bonuses is pretty sweet too...
@@fastrivers812 Absolutely, .... I'm for the working man, but I'm also out for manufacturers like Deere, .... companies that build something. Stock buy backs ..... savvy. Cutting workforce hurts but demand is demand. The distortion in our labor market cost caused by raising minimum wage may sound good, ..... COVID caused major distortions, and the Biden Administration is causing major distortions. .......
We started buying John Deere equipment back in the 80's. Back then Deere was a premium product with excellent parts and service. Today, it's still a nice unit, however, the red and blue brands have caught up. The layoffs will probably cause me to look at other brands very hard. They are not loyal to USA customers or employees so why should we the consumer be loyal to them.
Woke as well
As they have shoved dealers out since the mid 90's shows they could care less about dealers or customers
Also -- competitors have a tractor product these days that is very close to the same specs as JD, and $75,000 to $100,000 less in price.
Nothing runs like a Deere ----- to Mexico 🚜🚜🚜🚜
John deer is garbage today
Umm, didn't CNH announce they are closing the Racine, Wi. Plant to move to Mexico??. NAFTA
I have worked at a Deere dealership as a field Tech for 25 years, our dealership sells it all and Combines, Cotton Pickers, Articulating trackers, Sprayers etc. The issue is the equipment prices of new equipment goes up approximately 7 percent per year and is unsustainable for the farmers, simply put Deere is pricing itself out of the market. The price of commodities doesn’t increase 7 percent per year therefore it makes the equipment too expensive. For example a baler picker cost was 575,000 when the machine first came out and cotton prices were averaging 80 cents per lint pound. Now forward to today the same picker is 1.2 million, and cotton is still averaging 80 cents a lint pound, this is not sustainable any more for farmers, so equipment sales and demand drop.
Same in NY. Dairy is dead besides very smart or very big due to the price of 100wt of milk being the same from the 1970s to not too long ago.
Fact is a gallon of milk went from $1.99 in the 1990s to 1.99 in the 2010s. Even now milk is only 2.99 or so and $4.xx for local noon GMO, non hormone, organic fed good milk.
@@workingcountry1776I hope that is a wholesale price. The retail price for a gallon of milk is close to $10 pg in my area.
Congrats.. UNION work force caused this bet you. Same for car industry.
Costs passed to consumers
Also. The large strike in 2021 set the stage for this
@@bch5513 So you don't think that tariffs on aluminum and steel has anything to do with price rises? I mean tractors and attachments are large chunks of aluminum and steel. Same thing is happening in the US auto industry, where prices have gone up and it happened right along with those tariffs. I don't follow the tractor business, and their price rises I'm sure started before those tariffs went into place unlike the auto industry (around 2018 I believe).
Unions tend to develop when workers wages/benefits aren't keeping up with expenses. When people are happy unions tend to not form at a business, so...........................
Here's a novel idea. The world of big ag which is most of what farming is now in the US means there's a lot more money out there to buy/maintain equipment, and that's certainly true in the US ESPECIALLY when most farmland is soy for export or corn to make ethanol. At some point you aren't putting larger percentages of acreage under the plow. So, MAYBE right now they have the equipment they need and are only replacing equipment when needed or the benefits of using it far outweigh the benefit of maintaining what they have. THAT VERY THING drives the world of computer servers.
@@markf8256 The retail cost of a gallon of milk is between $2.50 - $3.00 USD where I live and there aren't large dairy farms here. And he is correct in that before inflation hit for a myriad of reasons starting around 2018, a gallon of milk in this area was around $2 USD. But I highly doubt the higher prices are making farmers much money. Considering transportation is going to be a significant cost since after all milk weighs a lot, the higher cost of fuel is part of that increase in cost.
Hey Mike! 16 years ago i bought my first new tractor a Kubota L45. I wanted a four cyl engine, loader and 4wd. The tractor came standard with all of the above plus a quick attach on the front. Total package delivered to my home was 26 grand and some change.
That same tractor with the same requirements in JD their 4000 series was 43 grand, I couldn't justify that. I have has NO PROBLEMS with this tractor, and I plan on keeping it forever!
Labor cost is more in US but basically double seems nutty
Calling BS on that. I priced thing out all the time and the prices was pretty close to each other.
Yes, I looked at Juan deere 3 and 4 series with cab. The brand I bought with implements and attachments was still 10k cheaper than just buying jd tractor.
I grew up working on farms and rarely did anyone buy new equipment. Often equipment was 30 years or older and still used daily. Nowadays it seems like buying new equipment to replace ones only a few years old is the norm. Its replace, not repair. We have been conditioned to desire the newest, and latest or we feel inadequate.
Exactly 100%, I was in the boot and shoe repair business and that mentally killed my business. Talking to people today about how to save money by repairing stuff instead of always running up the credit card is like talking to the wall, it's going to take another great depression to get peoples minds thinking correctly their just too ingrained w this credit ideology. And secondly, there is way too much free money being passed around hence stimulus, welfare, food banks and EBT.
Nobody in NY doing this.
Custom harvesting companies have modern equipment, not new every year though. Farms that are blessed to own combine get used and keep for decades
@@workingcountry1776but there’s no “right to repair” your own equipment and they don’t have parts readily available. How do you remain idle during harvest while waiting 4-6 weeks for a part that only an electronics technician can replace and enable it into the “system”. Overly complex and not as robust as older machines.
The tax laws force business to keep buying new equipment or write the government a big fat check with nothing in return. At least if you buy newer equipment you save time and money with repairs and down time.
@@tonymaiettasr.7340 isnt that mostly a John Deere issue nowadays ? So not buying JD could solve that.
I found myself in a maintenance bay at the local JD dealer talking to the head guy there about something and there was a brand new cotton picker in there they were getting prepped to deliver to a customer. Making small talk and trying to sound smart I marveled at what a machine it was and wondered out loud who has $600,000 to spend (thinking that’s how much it cost). He laughed and said 600? This one is over 900! The cheapest new unit you could get was around 800. What the?!?! He said they sold one the year prior for over a million. These folks buying these things are pure businessmen, knowing how to manage debt and depreciating assets. I’m sure other brands are way up there too, it’s just a wild world now on big ag.
Meanwhile normal farms run equipment for decades. Combines with their different heads 6 figures for a 15 year old machine.....
Years ago the question was raised about the salary of GMs CEO which was very unbelievable to the Blue Collar crowd. The question was asked if the CEO vanished off the face of the earth would GM COLLAPSE!?!?!?
Now thirty maybe even forty the same question can be asked about the CEO of JD whose salary was said to be twenty six million a year!?!?!?
I live in APPALACHIAN MTs of N.C and a retired CEO OF JD owns a sizable farm near by with all the trimmings plus a special breed of cattle!!!!! Yet the surrounding farms who have JD equipment are struggling with demand notes and equipment repairs!!!!!!!
And as for unions I understand stand why when you have executives with excessive salaries and the guy who gets dirty is paid the bare minimum!!!!!!!!
The farmers help build this nation not some CEO sitting in a fancy office!!!!!!
The reasons for the plant in Mexico is the same as the FORD when they built a plant there!?!? Labor cost; more profit for the ELITES OF THE BUSINESS!!!!!!!!!
IT'S TIME PEOPLE TO PUSH BACK AND SAVE OUR REPUBLIC AND FREEDOMS!!!!!!!!!!!!!!!!!!!!!!!!!!!
A GOOD START WOULD BE TERM LIMITS, ABOLISH THE FEDERAL RESERVE AND OUTLAW LOBBYISTS!!!!!!!!!!!!!!
And yet no one complains about Tom Cruise types getting paid $100,000,000 for 1 movie. And sports figures getting paid million s for a school yard game. Or the millions that news anchors get paid. In fact when you get right down to it. The only Rich people that get b****ed about. Is conservative rich people. Crickets about Marxist richies!
You nailed it!
Putting this out there, I work at John Deere Waterloo works in maintenance. Seeing a lot of comments on UAW being the driving factor for Deere's moving jobs to Mexico. That may be true for auto manufacturing but the majority of Deere Union workers are in assembly and making under $25-$30/Hour. After 1997 John Deere only offers 401K with a 3% match for union employees, long gone are retirement healthcare and pensions for union employees. International UAW does very little for Ag workers.
Also July 24 they had about 100 salary workers let go, possibly more to follow.
Don't forget to listen to the UAW an vote Democrat ticket! I worked 20 year USW union and was always sad with the union always backing democrats.
Funny how the GOP is now courting union labor because the Dem’s are going for the illegal immigrant and skittle hair student vote. They completely think union labor will just always vote dem forever.
IMO when companies stopped hiring manufacturing supervisors off of the floor, quality and production went down hill...
Yeah, it's not the 1970s anymore when it comes to pay and benefits. Many people have a warped view of unions today.
I'm from Mississippi... John Deere is known as "expensive parts" and "tons of plastic".... We all buy Kubota.
Amen. Same in TX
The kubota dealers around here are known for being shifty/shady, poor service and unfair pricing. Neighbor spend 2500 to have some hydraulic hoses replaced on his. nuts.
Kubota makes nice small tractors but Deere is Big Ag.
Kubota doesn't make ag equipment like bailers or choppers though
@@workingcountry1776uh, apparently you need to update yourself. While not in the large row crop or small grains segment, Kubota has an extensive lineup of mid-size tractors and hay tools, yes, including an excellent line of round balers, for both dry and silage hay applications.
Mike, do a video on Kubota’s significant expansion in Kansas over the last few years. A great story for the heartland area!
Hear, hear... bought an L2501 in 2018, before the panic buying in '20. Been a great machine.
Mike - great info but consider this. I sold farm equipme t in the 80's and 90's - $100,000 was a lot of money, a d 25 ft was a good sized combine header. Today, it takes close to 1 million dollars to buy a coombine, and the headers are 40 feet plus! The point I am making is the capacity of these machines is huge! One machine will do what took 2- 5 machines yewrs ago, and replacement cost is prohibitive. They can not expect to sell near as many machines long term. My humble opinion.
Add to the equation that there are increasingly fewer and fewer farmers every year due to retiring farmers and farmers getting out of farming. This also decreases demand. Lots of the larger farmers lease their equiptment instead of buying .
Mike, thank you for a straight forward honest explanation of the John Deere situation. Crop prices down = lower farm income = delayed or cancelled plans for farmers to replace or upgrade their equipment. Deere sales are forecast to be down about 25% this year. Everyone wants “Merican jobs” until it’s time to pay for the products those Americans build; then we support and vote for South Korean jobs by purchasing their products. It’s much more complicated than that, of course, and I look forward to your next video. Used to be a saying circulating, “What is more American, a Ford Crown Victoria or Toyota?” The answer of course was that Toyota had a higher percent of US parts and labor than the Crown Vic.
A major part of the problem is INTEREST RATES. My state produces about 75% of the US' sour cherries. Our farmers are being undercut by foreign producers. So, when they need new equipment, they have to borrow at over 10%. This includes operating loans at over 10%. I haul cherries every year and you cannot make money at 15 CENTS per pound. Last year we shook over 1.4 million pounds of cherries. The final check did not come until this spring. It paid for the spray bill. No new tractors at this rate.
Let us not forget that the US Dept of Labor forces the farmer to pay a very high wage to workers, ($17+ per hour) pay for housing, provide transportation to and from the store, Migrant Head Start, Intercare Health benefits, free breakfast and lunch for their students, ad nauseum.
Well, a Crown Vic and/or its parts are made in Mexico or Canada, which are part of America, after all!
I once got a tour of the Waterloo foundry from my late uncle who was at that time the safety head- what a great experience that was.
You say inventory is up with JD. I just drove through my local dealer and I though this far after covid that they would be plenty of inventory. They didn't have no 3 E or R series tractors. They had just a couple 4e series tractors.
When I went through the engine plant at Waterloo, it was just myself and the tour guide.
Later I went through the tractor plant, but it was with a large group, a totally diferent experience, but the tour did NOT include seeing the 9000 series assembly line, was still off-limits, as those tractors had NOT yet been officially introduced.
My cousin and I went through the Akeny plant a few years ago, and they had stopped cotton picker production for the year, and were building sprayers.
I was gobsmacked when told how much of their production on the agricultural side, went to Europe/Russia/Ukraine, China, and South America.
@sirgermaine
It's no glorious life. I spent close to 28 years in a foundry making parts for John Deere and Cat ..... Dirty and hot place. Just recently retired..
@@bradbruggeman6745 that's totally reasonable - just because kid me thought it was really cool doesn't make it a fun job
As an industry professional, you may remember an article in a trade journal a few years ago that spoke of where the farm machinery factories were located. If my memory serves, John Deere’s largest factory under one roof is in India.
Ah India - I didn't know that. This explains why John Deer has just opened a huge new dealership at Green Ore, Somerset, England, UK.
Ok. I saw the layoffs question and was interested but you did such a great job explaining where the market's at, I'll be back!
Executives are stripmining the company
Yes! And the UNIONS are making it happen!
Its corporate greed pay a tenth of the wage in mexico but still charge the same price for the product
My local JD rep and I were talking yesterday as he and I were walking the lot and eyeballing some of the new 6 and 7 R series, and he pointed out they were way overstocked on last year models. And proceeded to tell me about the great deal he could make me on 5, 6, or 7 series. They had on the lot more than 30 assorted 5 and 6 series. I am tempted to snag one of them. Had a similar experience at my local Case dealer. So deals can be made and the abundance of overstocked inventory is evident here in Colorado.
Other than the mention of ISG Urbandale, this video didn't mention the several hundred salaried folks let go starting June 3 and through this past week. A source at Deere was telling me it was something like 900 last week and a few hundred more back in June. Lots of long term engineers, project management, IT, data analytics, financial, etc. They announced layoffs June 3 but the last cut was last week and for nearly 2 months nobody knew who was going to get the axe or not. Lots of stress and I am sure low productivity in the offices.
Mike is not totally correct in the layoffs just being in the BIG tickets plants. Here in Grovetown GA, there are 2 plants, lawn to 4000, series, and 5 and 6000 across the street. These have been scaled way back in production as well. I passed by the subcontractor that mounts tires on wheels, the gate was locked, no 1 around . Even the grass cutting has been neglected it seems.
This is a drastic change in the "norm" of this manufacturering area.
You know it's serious when the grass isn't kept cut.😢
100 % agree on shoving dealers out. We had a John Deere dealer in my area that had been in business since the very early 1900’s. They had four stores and were “forced to merge” with a new conglomerate of other dealers. All they care about is ripping the American Farmer Off.
Thank you for doing all of this research we really appreciate it.
All of the manufacturers prices are outrageous and even Kubota has gone crazy!..people just need to hold out for a while and refuse to pay these exuberant prices!..Deere pays off a bunch of people and sends their jobs to Mexico because they feel they pay too much in wages in the US and yet they claim record profits!..it’s all quite interesting!..
Hold out for what…? And let the prices go up..?
@@greggb1416 they aren’t going up if they aren’t selling their products…if anything they will give rebates…kubota is doing it now…
Touché
@@greggb1416 they’re going down..kubota and other manufacturers are giving rebates now…
No more john deere for me moving to Mexico john deere can go pound sand been a john deere fan my whole life but if they move to Mexico iam done with john deere
GFYS
yeah fuck those guys in mexico that are about to be highly exploited because JD couldnt pay a lower salary here
@@davidmicalizio824 Go back to MX
@@davidmicalizio824drag queen says what?
JW, (politely) what brand isn't using offshore manufacturing plants? Agco products are nearly all produced outside of the US now. CNH Global may make about the same stuff in the US as JD, and the balance of products are made elsewhere. Kubota is a Japanese company, and they do have facilities to build products in the US, but not all of the line is. I don't think FiatAgri has any US plants. Did I miss anyone?
Mike one item completely missed in your analysis is the impact of Automation. Many jobs in industry are being eliminated with improvements in automation. Automation is cheaper and more reliable than in the past. The higher wages and benefits from the new 2021 contract makes it even easier to cost justify automation . This trend will not stop
My 2007 New Holland TB120 was made in Mexico. The diesel engine in my F350 and the engine in our Ford Edge is made in Mexico. They problem I have with that is they are still charging a premium price as if it was made by US union workers. My tractor has axles made in England. The hydraulic pump is made in England(UK). This stuff made today comes from all over the world.
The quiet part of your statement is that the unions have priced American products out of the U.S. and global markets. Union does not equate to high quality either.
@@greysheeumso true. These union workers did it to themself.
Ford tractors had British components way back in the '70's, I know of, and likely well before then. Deere started with German built tractors in that era as well, and has increased their product line from there since the "40" series utility models were all made there.
Acquiring parts may be problematic in future
Mexican made products are of superior quality and hence the premium.
What’s happening and why, pure and simple CORPORATE GREED simple as that. I have no sympathy for JD.
I think one of the main reasons people pay a little more for Deere is it feels so American. Take that away, even little by little, many buyers will consider more global brands. If Deere starts feeling “global” prices better be more competitive. Americana means a lot, at least it does to me…
I recall the farm crisis during the Jimmy Carter era. Farming operations that were very dependent on credit took a big hit from high interest cost. High inflation is causing higher interest rates so I suspect that' high interest rates and inflation prices are a part of the current downturn in farm equipment purchases.
Maybe JD could use some of those employees to fabricate the replacement brake coupler that led to the recent “recall” 2017 thru 2022 small tractors. Ya know, the one where they tell everyone to NOT use their tractor while they figure out how to repair/replace the part.
Reported profit doesn’t reflect actual profit, you can’t look at one single number and determine corporate health financially. Debt, projections, fixed and variable cost per produced item, labor cost (social security, retirement and health programs etc.) all come into play. I don’t know exact figure today, but paying an employee 100 actually cost closer to 175. Material costs plus increased labor cost makes everything more expensive and reduces demand for the product that’s the life blood of any company’s existence. Not taking sides, but many times Unions see the short picture and wind up cutting their own throats with unrealistic demands. This is an example of that, all were happy for several months right up until they need to learn Spanish and move the family to cartel country.
Simply put-this situation hurts us all regardless of what brand you own and it’s not just tractor manufacturers. The restrictions and inequality in production costs of imports kills business in the USA. Regardless of political affiliation, ponder that in November.
Nice informative video. Thanks for doing the research and compiling the numbers. It's a little easier to understand
Do any of you remember Ross Perot? As a presidential candidate in 1992, opposing NAFTA, he said there would be a giant sucking sound as U.S. jobs go to Mexico. He was a conspiracy guy, remember? Not so much huh ? All of this is a potpourri of political nonsense, as the efforts to destroy the U.S. continue. Like all the price insanity of many products, we as consumers just need to stop buying this stuff. We are all in for a very rough economic ride for many decades to come.
I own a john deere, can't say this video made me feel good ! Once again the employee gets smashed. But I guess it's all about the stock price.
I will always be a fan of the 40, 50 and 55 series JD tractors. I just don’t see the incentive for anyone wanting quality row crop tractors to buy new anymore… living with some older equipment is perfectly fine in many cases.
I always appreciate your talks, Mike!
Good video, Mike! I feel like this could be an indicator of things to come to American consumer markets, like cars and houses, but time will tell. I do feel like things are getting interesting. It's one of many reasons why I'm happy to be done farming.
Sadly they have priced themselves out of the reach of many people in the sub 40 market. Myself included. I will be purchasing a sub 40 tractor in the next few months. After many videos and tons of research Deer is off the list. I just cant justify the much higher cost. Parts and maintenance isnt an issue like it was years ago to make it worth it.
Kubota
Corporate Greed and Inflation
That pedal system (Fwd/Rev) will NEVER get a penny from me.
Way too much plastic.
Great full explanation! Thank you!
I see more and more farmers buying green tractors, Fendt green that is.
Quacamolee Green
I took a joy ride in a Fendt last week strictly for fun, Told the Fendt rep this is what Deere want,s to be. He had a chucle over that! Retired farmer.
@@fredblase5608Aren’t Fendt tractors a European product? 🤔
Excellent information, keep up the good work. Thank you.
I drive by the Ankeny plant and there are no cotton pickers or sprayers waiting to be shipped. The old saying applies, when the farmer catches cold the city gets pneumonia.
they are down till the middle of august, Waterloo is down next week no shipping at all. I don't know about Moline yet but I have never seen it this bad as far as hauling goes
Appreciate the insight Mike. Hope the family is doing well.
They won’t be offering any price cuts. They are squeezing every penny they can for their executives and share holders. I keep hearing about the American manufacturing boom, but I’m not seeing it.
I feel bad for people, but a draper header is $124,000 , combines , $1,000,000, a swather $200,000,what do you expect?If you wonder why you can't afford to feed your family look at a greedy few .The scale of stupidity.
A new basic raF250 pickup with extended cab and 8ft box was 18-20k in the 1990s and $30k range in the 2000s to early 2010s. A base ranger is more now. Income on farms has been stagnant for decades and high paying engineering, computer, machinist, and energy jobs have all been closed down so average family pay is lower now than in the 1980s and 90s (within 100 mile circle of me) than now
You are Correct in What you have said, They used to be a Premium Product, But the Reliability has suffered greatly, We set for hours while they do Downloads and Updates plus the Major break downs. Engineers need to take a year OFF!!
The layoffs are retribution for the strike.They'll Upper management will show the union. Some of the small towns where Deere factories are at in Iowa will be decimated.
Mike, i was surprised to hear about the slow down of the big commercial machines for huge construction projects. The AG layoffs are no surprise at all. Sadly, commodity prices are down and many smaller farmers are suffering with debt. This whole deal sucks all around for everyone
Add that for every John Deere job lost, TWO or THREE jobs are lost in the small parts manufacturers. Some small towns in Iowa and Illinois are losing the only employer in the area and these towns are in danger of just drying up and fading away.
You forgot the big reason farmers are not buying Deer Equipment. When they went, Woke and lost touch with their actual costumes. They became the new Budwiser. Several farmers around here are selling their green equipment and buying other brands. Not to mention that Deer doesn't let the "unotherized" non Deer mechanics access to the software to repair their equipment. Their are several factors, including what you posted, causing Deer sales to plumit.
🙄 Throwing away money because you don't like people they hire makes total sense. lol
Don't forget, the guy who started the whole Budweiser is woke BS never quit drinking it or selling it in his bar. He just got a lot of people to throw away money.
The lack of repair rights is certainly true and definitely negatively impacts new equipment sales.
@tomrowe1435 nothing to do with throwing away money, I invest in America made as much as possible and make sure at the time that company has good moral values. Fuel King is a much better business with ethics and has more items for farmers today than Tractor Supply. Without the company pushing liberal Woke Adgenda on their costumers and employees. Simple just do your research before you buy.
Deere’s CEO compensation was $26,285,804 of which $7,502,833 was cash and the balance was restricted stock awards of one form or another. If Deere zeroed out the CEO’s cash compensation and distributed it amongst Deere’s 82,956 employees each employee would receive $90.44, or about a 4.5 cent an hour raise. CEO compensation isn’t really a driver in setting employee compensation even if the numbers are crazy high.
It’s an easy answer why the sales are down, the cost of equipment is at a pinnacle, while the commodity prices are suffering. Then add the rain we had in the upper midwest (sorry, but the midwest isn’t Ohio or Indiana) meaning Iowa, Minnesota, the dakotas, and Nebraska. Yields will probably be impacted by more than 30%. As long as unions continue to demand and hold companies hostage for outrageous sums, in today’s economic environment we could be in for a severe farm recession like the 80’s and early 90’s.
John has been known for making 300 percent over cost of production. As far as their small tractors and mowers prices will stay the same or higher.
One day soon there will nothing made in America so very sad 😢
7:50 Don't mistake Profit with NET profit.
How long until JD relocates HQ to a southern state?
He missed one of the key parts on the reason (Sales) are down, just like me and my position I'm looking for a new 300+ horse articulated tractor.
I used to just call my local John Deere dealer every two years tell them bring me a new 8000 series and a new 7000 series and didn't think a thing about it with .9% financing
I just can't do that anymore, just adding that up right now with 30 or 40% down on a $400,000 Tractor and adding 3% interest to it on top of what I already was paying on the other equipment would be absorbing another half $1 million a year just in my operation
And pretty much everyone in my industry in the large farming is in that same situation you just can't do it the way interest rates are today and the input cost of everything else out there so the old saying goes it's cheaper to keep her.
Your wishes came true! The big guys drove the small farmers out of business and there's no market for new oversized teched up equipment.
Great video Mike
Return on Investment ? Supply and Demand ? Undersold by Foreign Builders ? Consolidation of Farms ? Just normal adjustments ? Effects of Inflation ? 🤔
Assuming what you have said is all true, that was well explained, thanks for posting.
Very informative, well researched and accurate . I just subscribed.
200 people on layoff from one new build location is a huge amount of money over say 6 months. A very large amount of money. You can calculate how much money. This has very large amounts of governmental money also as all these people would have paid taxes during their layoff. So this would make governmental watchdogs very unhappy.
Great info thanks.
Tier 2 in manufacturing for some CNH parts in SW Michigan. Over the years I steadily watch the decreasing demand for seeders.
It might be worth mentioning, that Deere has already been producing tractors in Mexico for awhile now. That's where the 6E's are made: Ensinada.
As costs continue to go up here, expect to see more production shifted elsewhere. This is just a result of a much bigger problem, not the problem itself.
You made a good point, Mike, about how the labor force grew dramatically in response to/preparation for an expected boom cycle in farm machinery just a couple years ago- related to international events. And how that same market is now contracting in the absence of that boom. That's pretty important context for the current layoffs. And something rarely brought up in these conversations- or news reports about them.
@@timdisbro6838 and where did i say that, lol. Or are you just ASSuming. I mentioned Mexico because it was talked about in the video.
I have a John Deere garden tractor, which I've done well with! I went to buy the canvas cover for my leaf cart. 800 hundred some dollars. I can buy a whole new cart for 1400 hundred dollars. Deere certainly knows how to gouge the customer!
my lowes John Deer Mower one of the Best Cutting mowers ive ever owned and ive Owned them all thru the years
Top shelf information !
Thank you, Mike!
I love John Deere. I owned John Deere. Their garden tractors are excellent. Summer and winter work. When the union conned you employees to go on strike in 2021 how'd that work out for you?? You got a 10% wage increase and 3 years later you lost your job. What am I missing here??
It is ironic just 2 years ago, everyone was saying how the supply/demand bullwhip had front loaded the market and the smaller manufacturers were going to get beat down in the collapse.
The Made In Mexico with a Made in USA price tag wont work either.
Got to keep the shareholders happy so the bonuses can happen
All these layoffs by Deere so where do all these people go for their next job. How many new jobs were created? Not part time or minimum paying jobs but jobs that pay enough to support a family of 4 without government support.
The problem as I see it is Deere has always been at the top of the pile because of their quality and the way the dealers serviced and developed good relations with their customers. Fast forward some years. Now Deere has been very active in converting dealers into Corporate owned and operated product and service outlets. They raised prices, and in far to many ways the quality just isn't there as in the past. The right to repair lawsuit. although ruled in the consumers favor, has left many long standing Deere farmers with a very sour after taste. Also, competition from Case/IH, New Holland, AGCO, have increased with these manufacturers meeting and even exceeding the quality and performance of products, and at the same time the pricing of new equipment and parts are lower or have better financing options.
The American free market system at work, its the best time to buy John Deere and Case stock.
Thanks Mike for explaining what is happening. Like your common sense
Ag layoffs in general are an epidemic, the funding going to many ag startups has decreased in recent years overall. I've been laid off twice from major ag companies and all the companies I have interviewed at have just completed a restructuring or planning one. It's a real problem.
These big companies are tired of paying premium hourly wages for unskilled labor on assembly lines. I don't blame them.
That may be true but the CEO and execs are receiving huge salaries plus bonuses with record setting company profits. They never consider down sizing their salaries just the work force.
@@user-wz9wj8eo8f any one of us would gladly accept that salary and bonus if it were offered for doing whatever we do and would fight anyone that tried to take it from us.
I always hate to hear about people losing their jobs. That turns a family upside down. Plus, it's never good to see American jobs going to another country. I'm wondering how many executives lost their jobs, or did these folks get bonuses? I sure hope that whatever is causing this downward trend in demand turns around soon. So, what's going on with our farmers? Have crop prices slipped? Whatever is happening we need to figure it out. I remember a while back, the American farmer out produced all others, America was the "Breadbasket" of the world has all that changed?
I wonder just how much JD could save if they moved their Headquarters to Mexico, replaced ALL the corporate execs and the CEO with Mexican businessmen to save even more money. Business decisions and actions does not require these positions to be held by Americans just what makes sense for smooth business operations.
I’m not a farmer but have purchased Deere equipment. I’m sure case has moved there production to Mexico as well. Ask yourself why? And it should be evident. Cost of production is lower due to work force wage. A Mexican worker will work for far much less than an American worker. I hope if this takes place the US puts large Tariffs on all formerly made products. All these big company’s sold out the American work force for cheap labor.
Very interesting, times are changing.... What next??? 😮😊
Very informative video Mike
Looking forward to the next one on Mexico.
Thanks
I think 3 dollar corn has more to do with it than the Unions
You are right. And soon $9 beans. Almost better to raise wheat. 🙄
Black rock is a big factor
The dealers in my area are still trying to sell 2023's. This is the time of the year when 2025's would be coming out and you can't get a 24 that's going to be a model year behind in just a short while. Also my local dealer just doesn't want to compete. You can't sell a 2 model year old tractor at full list price. This is coming off a record revenue/profit year for Deere, they'd rather look out for the "company" rather than the people that built the company.
Good unbiased report!
Great video. Keep up the good work.
Maybe JD will realise their folly when the second hand prices of their products falls and no one will want them even then. I can't think of many farmers who would buy equipment with such DIRE after sales support.
Why is john deere going into the auto industry? They say 2025 going into making truck's. And what is going to be there price.
My Nephew runs all Case IH equipment. He had one of his tractors dropped off at his dealer in Nov of 23. April of 24 it was still sitting in the same spot it was dropped in. It is any better running red or running green. Cost is the same on comparable equipment and the farmer is at the mercy of the big corporate dealer to get work done because of proprietary technology.
Im a john deere guy, but lots of my friends buy kabota.Always like buying US built. Guess that's irrelevant anymore.
I bought a Kubota,,it has give me problems, day1,,going on 4years,,nothing but problems..
Very informative report.
Who can afford the insane prices on JD equipment.
You left out John Deere Ottumwa Works. Why?
Dubuque plant Compact Track skidsteer ate moving production to Mexico. Those jobs are gone along with a big hit to all the business that make parts for Deere plus all the service people
Mike In have a question about a 2705E Massey whats happening when after it runs for 15 to 20 minutes it derates the hp to almost 1/2 the hp do you have any ideas.
Could it be it is a Massy? ha
So much for John Deere being an American company. I hope farmers and the industrial product consumers remember that when they make their purchases.
I'm agreeing that it's a sad time, but I can't think of a full line farm equipment company that doesn't match JD in the amount of production plants both in the US and outside of the US. CNH and AGCO both import about the same size tractors, SP choppers,and almost every combine are made elsewhere.
@@MorganOtt-ne1qj Unfortunately so many corporations and politicians have sold out for the almighty dollar. For the love of money is the root of all evil.
Slow economy and high UAW wages. The low guy get screwed the higher guy doesn’t care
Thanks Mike!
John Deere was established in 1837. The company announced it would be moving the production of skid steer loaders and compact track loaders to Mexico by the end of 2026. Portrait of John Deere. According to the company, the decision was made to address the rising manufacturing cost. Jul 1, 2024
I work for an orchard in Oregon. We quit buying Jon Deere and now have only one newer Deere and the other 6 are Kubotas.
Kubota makes reliable machines. My biggest thing with them is the lack of integral weight. You can ballast a tractor to match another one on the scales, but built in weight gives you a more solid feel for things. For instance, I feel much more stable in a JD 7810 than in a 6215R using a 15' MoCo on rolling hilly ground. The latter has plenty of power, but not the same a$$ as the former. I know people who bought Kubota's, and really liked them, until they were on a slope and the tractor wasn't holding itself in place like their older JD of the same hp did. They switched back to JD. Paid more, but felt it was worth it.