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John Deere Strike: A Union Member Explains How Bad Faith Dealings Produced Today’s Grievances

Summary:
Yves here. Reader TroyIA, who works at John Deere, has graciously provided us with an important background to strike, most of all the too-clever provisions that management won in past contract negotiations that turned out markedly worse for union members than they were led to believe. A centerpiece is the hated incentive plan CIPP, which not only due to tricks and traps regularly fails to yield any payments despite a unit appearing to hit targets, but can even deliver negative payments, as in deductions. It sounds like an evil next-gen version of a derivatives payout formula that industry expert Satyajit Das was tasked to analyze on behalf of a perplexed Indonesian client, who was paying faithfully for protection, yet no matter what happened in the relevant market, he never got any funds.

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Yves here. Reader TroyIA, who works at John Deere, has graciously provided us with an important background to strike, most of all the too-clever provisions that management won in past contract negotiations that turned out markedly worse for union members than they were led to believe. A centerpiece is the hated incentive plan CIPP, which not only due to tricks and traps regularly fails to yield any payments despite a unit appearing to hit targets, but can even deliver negative payments, as in deductions. It sounds like an evil next-gen version of a derivatives payout formula that industry expert Satyajit Das was tasked to analyze on behalf of a perplexed Indonesian client, who was paying faithfully for protection, yet no matter what happened in the relevant market, he never got any funds. It turns out no matter what numbers you plugged into that formula, the answer was always zero.

Please send your good wished to Troy and his fellow strikers.

By TroyIA, an absentee replacement welder at John Deere Harvester Works in East Moline, Illinois for almost 14 years

My position is to know how all of the jobs in my department are performed so I can fill in for anyone who is absent. The following has been my experience working at Deere so far as well as shop lore that has been handed down from previous workers.

It’s midnight on Wednesday October 13th and I’ve been laying in bed for the past hour in nervous anticipation when I get a text from my union. It’s on. We are striking against the company for the first time in 35 years. After months of shop chatter and planning for this moment the actual reality of going on strike hit me. And then I began to ask questions. How much hardball will the company play? Has the union miscalculated and we end up even worse than before? What will the wider community think of us? But most importantly how did we get to the point that a UAW endorsed contract would be rejected by the rank and file by a 90% to 10% vote?

To begin this story we need to start in the 1970’s. The agriculture economy is booming and companies like John Deere, Case IH and Moline Plow Company are busy supplying farmers with implement like tractors and combines at such a high rate that the Illinois side of the Quad-Cities was called the farm implement capital of the world. To hear the old timers tell it one would graduate high school on Friday and start working on Monday. And these were good paying middle class jobs that would allow one to raise a family without any financial worries and retire comfortably.

Then in the early 80’s the ag economy was decimated by a one-two punch of an embargo against the USSR and the Federal Reserve raising interest rates. Every company laid off thousands of workers and went into survival mode. Some held on longer than others but by the end of the decade only John Deere was left standing. The workers who were laid off in 1980-81 slowly returned after being out 5 and sometimes 8 years. It may sound crazy to return to a job after an 8 year absence but the jobs that were available after the ag companies left were low paying non-union jobs. Having a job at John Deere was like Charlie and his golden ticket in Wille Wonka because you and your family would be set for life.

As John Deere recovered and the wider community began to heal from the shock of having a major part of its economy eliminated everyone felt good in 1997 about contract talks between the company and the union. And then in the middle of negotiations the company dropped a bomb. Thanks to NAFTA they were threatening to move plants to Mexico like so many other companies were doing. Just to make sure the union understood they were serious they showed the negotiators the future location as well as the factory blueprints.

The union was given a choice. The current workers could keep their wages and benefits the same but any new employees would have their pension cut and be paid half as much i.e. a two tier work force. Or the plant would be moved to Mexico and no one would have a job. One would think that their only consideration was themselves but the union also weighed the impact a plant closure would have on the community. The glory days had passed but if the one of the largest employers closed it would be the death knell for the local economy. After much fighting between local union members and the international union it was grudgingly decided to accept the new two tier contract.

In the ensuing years the contracts were written so that pre 97 workers wages were frozen while post 97 workers wages increased based on cost of living adjustments. In the last contract that was ratified in 2015 the COLA was taken away and the post 97 workers received set pay increases that by 2021 paid them the same as pre 97 workers. So after almost 25 years the lower tier has seen it pay increase to the same level as the higher tier. Or stated differently a pre 97 worker has lost over 35% of their earning power spread out over 20+ years.

In order to understand the pay rate I need to mention CIPP. It is literally a book written about how your base rate of pay is multiplied by your department’s efficiency. It’s a complicated formula but basically the more machines you can produce in less time or using less people will increase your efficiency therefore increasing your pay. By being smart, moving work around, eliminating waste and just plain old hard work a post 97 worker could almost earn what a pre 97 worker used to earn.

In my factory we had a department that was the model of how the union and company worked together to have a high paying CIPP department. Everyone came to work everyday and worked minimal overtime and safely produced machines with no defects and on schedule. The company got quality machines and made a profit and the workers were happy and well compensated.

Then one day the company decided to move that line to another area in the factory in order to make room for a new product. The line that moved produced 2 different products so it was split into 2 separate lines. Initially it made sense to the workers because each line could focus on 1 product which would make it easier to make efficiency gains. Only due to the way the CIPP rate was created by the company neither line ran at the same efficiency that the formerly combined line used to run at. What did this loss of CIPP rate mean to those workers? On average they were now earning $20,000 less per year. It was infuriating that before they might produce 20 machines using 20 people on 1 line whereas now you would have 2 lines producing 10 machines with 10 people each. The company got the same output with the same number of workers only now the workers were paid much less than before. It worked so well for the company that they moved even more departments and the ones that couldn’t easily move they just totally outsourced. To say that this demoralized the workforce is an understatement.

I could go on and on about CIPP but a fellow coworker summed it up best – “It is a carnival game that the company rigs in its favor.” There is nothing worse than being away from your family for 50-60 hours per week and risking your safety only to see your paycheck has a negative number on your CIPP line because you have to pay the company to raise your efficiency to 115%. (Like I said CIPP is complicated.)

After the 1997 contract even though the wages were now much less than they used to be the union would always hold firm when it came to health insurance. It was still a good benefit and most other companies couldn’t afford to provide the same excellent plans that John Deere did. Then Obamacare was passed and one of the rules that was included was the Cadillac Tax. Any plan that a company provided to their workers that was worth more than a certain amount would cause the company to pay a tax.

During the 2015 negotiations the company told us point blank that they will not be paying that tax so pick a plan that is under that threshold. That translated into a new plan with a narrow network and copays that increased 300-400%. Now the economists that created Obamacare stated when companies switched to cheaper plans they would share that savings with the workers. Yeah right. We didn’t see a dime of that money.

So what does a job at John Deere in 2021 now look like? What was once the best job to have is now no different than any other job. Being such a large employer in Iowa and Illinois everyone knows someone who has worked at John Deere so when word of mouth used to be about job openings it has switched to stay away from working there. All of the John Deere plants in the Quad-Cities, Waterloo and Des Moines have had job openings all year that they have been unable to fill. My plant is so desperate for help they have eliminated all job requirements meaning no need for a high school diploma or GED. They also no longer check for felonies or test for marijuana yet they still are unable to hire enough workers.

During the past 2 contract negotiations business slowed for Deere and Company resulting in hundreds of layoffs at contract voting time. Even though a member was laid off they could still vote and as a sweetener the company included a $3500 ratification bonus. So put yourself in a laid off worker’s shoes – you are out of work and don’t know when or even if you will be coming back to work. What do you care is in the contract because as long as it passes you will be getting $3500 dollars so you might as well vote yes.

And from the union side during the 2015 contract vote members were given 30 minutes to review any changes to the previous contract before voting yes or no. Ultimately the contract ended by passing by a little over 200 votes. (Far from prying ears some of us express our doubts)

Based on how the last contract passed the mood on the shop floor began to change. We began to prepare for the possibility that we will have to fight both the company and drag the union leadership kicking and screaming over to our side. What was once unthinkable was becoming the only possibility – we will have to strike in order to get both sides to listen to us. We began to save extra money and if needed line up side hustles to help get us through the upcoming trying times.

Every Wednesday the past 2 months throughout various factories we would wear our union shirts as a form of unspoken solidarity. We knew the strike was coming. The salary workers in the plants knew the strike was coming. (The salary workers are often treated as badly as the wage workers so secretly a majority of them are sympathetic to us.) The only ones unaware of what was about to happen was the corporate office and the union leadership.

So on October 1st the strike deadline passes and we are preparing to walk and then – a breakthrough. The company and union reached a last minute agreement and the old contract has been extended 15 days while we vote on the new contract. This time we made sure that we were given the new contract 48 hours in advance. Local union reps were available to explain any changes and answer any questions. And the most common question was “This is it?” There was nothing to address CIPP rates and the base pay rate included a raise that barely kept up with inflation. With an added kicker of a third tier of workers who would not even get a reduced pension.

During the voting we met with the negotiators and the frustration of the past 25 years of concessionary contracts finally boiled over. For the first time in 40 years we finally had a little bit of leverage on our side. The company has been unable to hire workers under the old contract because they took away so much from us. Everyone is weeks and sometimes months behind schedule due to the supply chain chaos yet Deere is the most profitable it has ever been. Now is the time to finally claw back some of the past losses but instead our negotiators came back with at best the status quo and recommended we accept what the company offered. Instead 90% of the members voted no.

Even though we disagreed with the union leadership the most maddening part is the company not accepting that they need to sacrifice a tiny sliver of their profits in order to attract and retain workers. We have sacrificed our health, our time with our families and hell even our dignity in order to keep this company running during these past few years and all we ask in return is our fair share.

So now we have to fight to get what we want. It is both exhilarating and scary but there is comfort in knowing we are not alone. I have worked at John Deere for 14 years and never appreciated the importance of a union until today. When we end a letter we would include a word but I never truly understand the significance of it but now I feel it in every bone in my body. That word is SOLIDARITY!

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