Workers at John Deere voted Tuesday to reject the latest tentative agreement negotiated between the company and their union, a sign that the largest U.S. private-sector strike in two years is likely to continue.
Local affiliates of the United Auto Workers union informed members late Tuesday that the deal had been voted down by a 55-45 margin. The failure of the deal will send the union’s bargaining committee back to the table with the company in an effort to secure better terms for the 10,000 workers covered by the contracts.
“The strike against John Deere and company will continue as we discuss next steps with the company,” the UAW said in a brief statement Tuesday night.
The proposal for a new six-year deal included immediate 10% pay raises followed by raises of either 3% or 5% in subsequent years. It also offered a separate cost-of-living adjustment to keep wages ahead of inflation and an $8,500 bonus for ratifying the contract.
Those were improvements over an earlier agreement the United Auto Workers reached with the agriculture and construction equipment manufacturer last month. Members overwhelmingly rejected that proposal by a 90-10 margin, prompting the strike on Oct. 14.
Although this latest deal seemed much better than the first one, it did not go far enough for a majority of workers.
Members have demanded an end to the “two-tier” compensation system established at Deere in 1997, creating lesser health and pension benefits for new hires. They wanted to see post-1997 workers put on the same path as “legacy” employees. The contract rejected Tuesday would not have eliminated that system.
Many workers may also be holding out for better raises in a subsequent deal.
Marc A. Howze, Deere’s chief administrative officer, said in a statement that the deal would have “significantly enhance[d] wages and benefits that were already the best and most comprehensive in our industries.”
Deere has enjoyed record profits so far this year, buoyed by high agricultural commodity prices and high demand for farm and construction equipment. Strikers insisted that the company share more of those profits with the workforce, especially at a time when high inflation is eating away at wages.
The decision to strike at Deere reflects a broader shift in leverage from employers to workers as the tight labor market in this stage of the coronavirus pandemic has made it hard for many companies to hire. Many Deere workers said it seemed like a favorable time to walk out because the company might struggle to find replacements.
The strike is the first to hit Deere since 1986 and the largest work stoppage at a private U.S. company since the one at General Motors in 2019.