Sunday, October 17, 2021

Nothing runs their workers over like a Deere

By Labor Correspondent Joseph Hill with
Harold Hill in Ottumwa, Iowa

They manufacture expensive agricultural equipment for one of the world’s largest and wealthiest corporations. The current boom market in the commodities harvested by the company’s products has led to robust sales of the company’s products and healthy profits of $5,440,000,000 for the first nine months of this year. The company’s CEO compensation doubled year-over-year.

How much would you pay the workers who are keeping this gravy train on the tracks? The answer, at least the one provided by the John Deere company, is a little over $40,000 a year, which includes plenty of exhausting over time.

And when John Deere’s workers asked the company to share some of its lush profits with them, the company offered a 2% increase a year for six years. That’s an $800 annual raise. At historical inflation rates, that equals no raise at all. At the current inflation rate of 5.4%, that’s a real wage cut of over 3% a year.

Although it sounds incredible, the unionized workers of John Deere hit the bricks.

The strike is presented in the media as part of a growing yet inexplicable labor “unrest,” which has also seen restaurant workers leave their grueling $2.13 a hour positions and notoriously s****y employers like Jeff “Space Penis” Bezos scrambling to replace their quitting warehouse workers with fresh cannon fodder.

But when the details are filled in, the wonder is that American workers put up with this crap for years, not that they are suddenly discontented with their ‘umble lot. Workers have been getting screwed for decades even as the compensation of their bosses, and the financial finaglers who manipulate and rubbish their companies, has skyrocketed.

The John Deere workers pulling down $40,000 a year, hardly a lavish living even around their Illinois and Iowa factories, were a generation ago well-paid union workers able to afford a comfortable middle class life and send their children off to war, like Ottumwa’s Radar O’Reilly.

But never fear — the benevolent bosses have graced their workers with a lavish bonus plan known as GIPP [Surely, CIPP? – Ed.] 

In other words, it's a scam right out of The Jungle.  If your boss keeps raising the number of hogs you have to slaughter to get a bonus, then there's no reason to think you'll get a bonus at all.  You'll just be sweated more.

Maybe things are tough at John Deere. Is it able to pay decent wages? Let’s ask Wall Street:

Deere has exposure to end markets that have attractive tailwinds. In agriculture, we think demand for corn and soybeans will be strong in the near term, largely due to robust demand from China and tight global supplies. On the construction side, we believe the company will benefit from legislation aimed at increasing infrastructure spending in the U.S. The country’s roads are in poor condition, which has led to pent-up road construction demand.

Note that none of this sunny outlook is due to Deere management, although revenue growth is a key determinant of long-term compensation for the CEO and his lucky lackeys. The revenue growth was due to high commodity prices, which gave farmers bucks to drop on fancy new farm equipment, and the possibility of a Democratic-led revival in infrastructure spending.

Also the stuff Deere builds enjoys a good reputation:

Deere’s intense brand loyalty among farmers and strong competitive positioning leads to pricing power. For decades, the company has consistently produced best-in-class agricultural equipment, leading to the largest installed base in the industry.

We’ll be generous here and say that if a company’s products have a reputation for quality, that’s likely due to good management and good workers, so it would be only fair to split the resulting profits, right?

Here’s how that’s worked out. As John Deere workers were expected to scrape by on $40K (plus, to be fair, 100% company-provided health insurance, a benefit enjoyed by everyone in every other industrialized country), its CEO got $15,588,000, more than double the measly $6,000,000 he was paid in 2019.  The cynical might ask if any Deere workers saw their pay double in just one year. 

And by the way if you were interested in investing only in highly ethical businesses, here’s Morningstar’s verdict:

We do not think Deere’s wide economic moat faces any substantial threats from environmental, social, and governance, or ESG, risks.

Screwing your workers is apparently not an ESG risk, so DE remains on the list of investment options for ethical investors, or at least those who are less offended by profits gained from the sweat of workers than from natural gas.

Deere responded to the strike by sending its nonunion workers into the assembly lines, which should do wonders for Deere’s reputation for quality, not to mention ambulance calls to evacuate scabs who have injured themselves operating the massive and dangerous equipment used to fashion 20-ton combines, while their flacks assure the public that the suits are “working day and night to understand our employees' priorities.” We can help.  Their priority is more f***in' money.

In short, after seventy years of Republican anti-worker policies, John Deere workers, like pretty much all other private-sector wage slaves, are barely hanging on as their bosses have reaped all of the benefits of a generation of economic growth. There's an ocean of data on this but here's one chart comparing trends in the wealth of middle class workers and rich people:


Of course, the Republican war on American workers wouldn’t have gotten anywhere without the crucial support it got from — those same American workers.

We can turn the clock back to 1948, when Republicans, over Harry Truman’s veto, passed the Taft-Hartley Act, which among other things allowed states to screw unions by giving workers the right to benefit from union-negotiated wages and benefits without paying union dues. This free riding is known as “right to work,” by which Republicans mean the right to get union benefits without paying union dues. Next thing you know, Republicans will be advocating “right to infect” laws based on the alleged freedom to transmit lethal diseases to coworkers in a time of pandemic.

Old Chuck Grassley has been screwing
Iowa workers for years

As suggested earlier, many Deere plants are located in Eastern Iowa and many Deere employees work there. The late [Surely, senior but alive and well? — Ed.] Chuck Grassley represents those workers. Last year he warned that voting for Democrats would lead to, wait for it, repeal of Taft-Hartley.

And more generally, Iowa was carried by the Former Loser Grifter by nine points.  The FLG's commitment to paying his workers fairly is well-known, at least if you’re a sex worker who’s got the goods on him.

How’d the Tangerine-Faced Traitor do in Deere Country? In Wapello County, home to Ottumwa, the FLG's margin was 24 points (61-37).  Real President Biden won Polk County (Ankenny) 57-41 and Black Hawk County (Waterloo) by 54-45.  But in Scott County (Davenport), Biden won by only four points (51-47).  Not good enough.

Now it’s possible that Deere workers all voted Democratic as a recognition of which party supported them and all other workers. We doubt it, as the defection of white factory workers form the Democratic Party has been the factoid that has launched a thousand idiotic reports from rural diners.   And 11% of the Iowa electorate who voted for Obama twice didn't come through for Biden.

We’re happy to support Deere workers (and Kellogg workers and restaurant workers) but at the same time wouldn’t it be great for them, for us, and for the country, if when they went to the polls they supported themselves?

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