Strike at Deere plants in the US, more supply chain shortage to come

[bigtiller]

The strike is because of a labor shortage. The union smells opportunity to raise wages (or to stick it to Deere?) and is going to. Timing and administration is on their side. I wish them poorly, higher prices will just push more offshore purchases.

As for Deere, after record commodity prices when every farmer (exaggerating but lot of truth in it) was a millionaire Deere was selling equipment like hotcakes. Now that we're in a more normal high fuel, high ammonia/lower commodity prices, I expect Deere had overbuilt and now has excess capacity.

Deere does not over build, they know their market well. There has been a waiting period for delivery of big purchases for a long time.

They are suffering a parts supply just like the rest of the world. Actually, this strike, if it is a short one, may be good for Deere. It will give their vendors extra time to get the needed parts made and delivered to them.

 

[ArlyA]

Deere does not over build, they know their market well. There has been a waiting period for delivery of big purchases for a long time.

They are suffering a parts supply just like the rest of the world. Actually, this strike, if it is a short one, may be good for Deere. It will give their vendors extra time to get the needed parts made and delivered to them.

If we were in the market for a compact tractor, I'd be looking at Deere.

 

[sea2summit]

So why was there money available for a huge CEO raise, but the company suddenly can’t afford it when labor wants the same? Seems if the CEO didn’t grab such a large chunk, the employees would be more satisfied with their share. It’s always the same story—sorry, business is down and you need to take less for wages. But when business improves, management grabs the purse and runs.
And the CEO here is not paying anyone or taking any risks, financial or otherwise, beyond the risk of losing their job if they don’t perform, just like the janitor.
How many CEO s have wrecked a company thru incompetence, and suffered no more than the loss of their job, again, just like the janitor.

Well let's think about it. CEO got a 160% pay raise to 16million this year is what google says? So reverse math 16mil/1.6 is 10 mil, so he got a 6mil pay raise. Whoo that's a lot of money. Lets give the employees an equal raise!

John Deere employs about 75,000 workers, so $6mil/75k is $80. So working 40 hrs a week 52 weeks a year is 2,080 hrs. $80/2,080hrs is $0.04/hr. Well heck, that's not $5 an hour! Let's just pay the striking workers that bonus! So $6mil/10,000 is $600, now we're getting somewhere. $600/2,080hrs is $0.29/hr raise. Damn, is that 5%?

Now lets look at 5% raise for folks, even making as little as $44k/year which I doubt is what most of them are making. Just the ones on strike, 10k times $44k is $440mil. $440mil times .05 is $22,000,000. Now for that $22mil what is the company getting? About jack all?

Now John Deere's revenues were falling during 2019-20. Guess when Mr. May started? Last part of 2019 so too late really for the '20 FY numbers to be affected. He however increased sales more than $5 billion! In the first quarter ending in July '21 revenue was up over 29% and they are on track for a really good year. So worker worthy of his wages etc. Less than 0.001% of the profit bonus for a guy that increased profit 18% seems like a pretty reasonable deal for share holders to me.

 

[NUTTERDW]

Deere's making record profits. Their workers are right to demand more of a share.

 

[coobie]

CEO's rarely lose their job just like a janitor, most times they get a generous pre-negotiated severance package and then the board of directors talk about all the bad decisions that the CEO made , and at that point I always have to wonder who really made a bad decision a dud who couldn't organize a sandwich making event and left with a 6 or 7 figure severance package or the board of blow hard's that hired him.

When I first hired on as a Electric lineman back in 1976 the CEO of our utility was grossing $120,000 per year when I retired 7 years ago the CEO was making $7 million per year.Go figure but its always the unions fault and never the CEO,s/VP,s or the board of directors that hire them.Hell just give them another golden parachute to retire.

 

[crawphish]

Rather than being greedy maybe the unions should focus on ensuring that their jobs will still exist in another 10-20 years.

How precisely does the avarage worker do that, when they (and their union) have no seat at the Board? What's to stop John Deere from selling out to some coporate raider 10 years from now and selling off the company for assetts? One thing to be said about Europe is that they require unions to have representation in corporate boards, so they can have an impact on corporate policy.

 

[crawphish]

Yep, half the threads around here eventually mention your tractor isn’t made in the US. Why is that? It’s cheaper to build it somewhere else then pay crazy shipping costs to put it on a boat, then pay more shipping costs to get it to a store than it is to make it in the US. Not all the blame is on unions for that but a case could be made that most of it is.

Not always. After this CEO raised his company's minimum wage to $70,000, he said the number of babies born to staff each year grew 10-fold and revenue soared

 

[ultrarunner]

At one time CEO compensation averaged 40 times skilled... a nugget I remember from way back.

Of course pay is only part of compensation... benefits and stock can be more...

Lee Iococa took over Chrysler at $1 compensation plus stock... so if he turned it around a great payday awaited...

 

[crawphish]

I never really got the thought process where you think you’re entitled to X because somebody else got Y, or that you “deserved” X amount just because you have a pulse, or have some noble profession. Economically your value is precisely however much it would cost to replace you. If my boss could find someone or something that contributes to the company what I do for less I’d be out of a job and rightly so. That’s a two way street too, for as soon as someone values me more I’ll fire my boss and move on. Neither one of us owes the other anything beyond the deal we both freely agreed to when hired. It really is (or should be) that simple. If you don’t like your deal, extortion isn’t the answer. The answer is to figure out how you can bring more value to the equation.

This is what so many fail to grasp, and not to single anybody out, but teachers are a great example. They’re not paid based on some philosophical value society places on educating children, they’re paid based on how much it would cost to find another teacher to replace them, just like everybody else.

A Contradiction in your argument: first you say that you don't understand why some feel they are "entitled to X because somebody else got Y," and then you use the example of teachers being paid based on how much it would cost to find another teacher to replace them. That is exactly the same thing. that's how labor markets work. If you can't compare your salary to what others are making, the market breaks down and settles at the lowest point that workers will bear. Which is why employers HATE IT when employees compare salaries. Assuming some of the people on this board are commercial farmers-- don't you compare what you are being paid for your produce with what the market standard is?

 

[crawphish]

It's more than I make.

As so many other people have said on this post, "up your skills." Or maybe it doesn't work that way and we all shouldn't be trashing on people who, for what ever reason, need to stay in a job but want more money. Capital, they say is liquid-- it can go wherever the highest return is. Labor, on the other hand, is sticky-- there are lots of reasons people won't leave their jobs or their community-- family obligations, ownership of property and houses, emotional attachments, etc. Maybe we do need a government or unions that serve as a counterveiling force that helps balance those scales, otherwise its just a dog-eat-dog world-- and the folks with money will win every time in that situation. Hell, back in the Middle Ages, the Church served that same purpose, for example, by passing laws against usury.