Deere & Company has announced in a press release that they reached a tentative agreement with the United Auto Workers Union (UAW) to replace the six-year master labor contract, which expired on midnight of September 30, 2015. Specific details on the ratification votes were not released.
The agreement still faces a ratification vote after it is presented to all members of the UAW.
In Iowa, the contract covers union workers at facilities in Ankeny, Davenport, Dubuque, Ottumwa and Waterloo.
Stock analyst Eli Lustgarten, who tracks Deere’s performance for Longbow Research in St. Louis, said a persistently weak farm economy probably was forcing the hands of both sides in negotiations. “I’m thinking Deere is thinking the same thing – how do we cut costs here?” At the same time, however, we also find weaknesses including feeble growth in the company’s earnings per share, deteriorating net income and generally higher debt management risk.
The tentative agreement comes more than a month after negotiations began between the union and Deere.
Deere spokesman Golden said the company plans to honor its agreement with the UAW to make no further public comment on the negotiations.