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Deere Reaches New Six-Year Labor Agreement with UAW

Shares of Deere & CompanyDE have gained 5.7% since the company reached a new six-year labor agreement with the United Auto Workers (UAW) on Oct 1. The new agreement will replace the six-year master labor contract that expired at midnight on Sep 30.

The new contract covers approximately 10,000 manufacturing employees at 12 Deere facilities in Iowa, Illinois and Kansas. Locations covered by the agreement are Davenport, Ankeny, Dubuque, Ottumwa and Waterloo in Iowa. Illinois locations include the harvester works in East Moline, the Parts Distribution Center in Milan, and the Seeding Group and Cylinder Division in Moline. The Coffeyville Works in Kansas is also covered by the agreement.

Deere and UAW began negotiating in late August. The contract now awaits a ratification vote from the UAW members. Both parties have agreed to not comment publicly about other terms of the new agreement.

Deere has eliminated over 1,500 workers since 2014, citing weakening demand. On Jan 2015, Deere announced workforce adjustments at several factories in Iowa and Illinois as the company continues to align the size of its manufacturing workforce to market demand for products. The actions include indefinite layoffs at five locations as well as an extended inventory adjustment shutdown at another factory.

Despite falling profits, Deere expects net income of over $1.8 billion this year. The company remains optimistic about the long term, based on steady investment in new products and geographies. Further, favorable trends derived from a growing, more affluent and increasing population shows ample opportunity for Deere's growth.

Moline, IL-based Deere is engaged in the production and distribution of agricultural and forestry equipment, construction equipment and engines worldwide. The company sells products in the U.S. and Canada via branch offices as well as distributors and operates through dealers to resell products internationally.

At present, Deere has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the sector include Titan International Inc. TWI , Lakeland Industries Inc. LAKE and Columbus McKinnon Corporation CMCO . All these stocks carry a Zacks Rank #1 (Strong Buy).

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DEERE & CO (DE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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