Editor's Note: Ongoing updates to this story can be found on Ag Equipment Intelligence.
Updated May 20, 2022, 2:05 p.m. CST
- LATEST UPDATE: According to a May 18 report from The Hawk Eye, CNH Industrial and United Auto Workers have been in Madison, Wis., since Monday working on a new labor contract.
According to statements from union officials, United Auto Workers will begin negotiating a 6-year contract with CNH Industrial in early April of this year. UAW International Director of Public Relations Brian Rothenberg confirmed in an email that the union’s contract covering Case IH workers will expire on April 30, 2022.
Workers at two factories are covered under this contract: the Burlington, Iowa, plant which manufactures tractor loader backhoes, bulldozers and corn and auger heads and the Racine, Wis., plant which manufacturers the Magnum series tractor. Workers at the Burlington factory are represented by UAW Local 807 and those at the Racine factory are represented by UAW Local 180.
Farm Equipment spoke with UAW Local 807 President Nick Guernsey for additional details about the upcoming contract, which he says will cover about 1,200 employees. He stated the local unions will begin prepping for negotiations in mid-March, with formal negotiations beginning in early April.
Guernsey says the outcome of the UAW strike at John Deere factories last fall will impact what the unions looks for in the Case IH contract.
“Obviously, with John Deere, it kind of put us into a different position. They hit it out of the ballpark," he says. "They did something that probably we’ve never seen and may never be seen again. So, what we’re looking at, at this time, for our contract is we want to maintain industry standards. We want to be competitive within the industry, and the only way to do that is to up some of the things that were lacking in the contract, wages being one, and benefits.”
Farm Equipment reached out to CNH Industrial about the negotiations and did not receive a response.
2021 Deere Strike
The upcoming negotiations between CNH Industrial and UAW follow a month-long strike that occurred last fall as 10,000 UAW-represented John Deere workers rejected two tentative labor agreements before ratifying the third by a vote of 61% to 39%. The first agreement was rejected by 90% of UAW John Deere workers. During the strike, Deere was granted an injunction against striking workers at certain factories to limit their picketing, maintained employee's healthcare and incentive pay and ended negotiations at one point.
A November 2021 survey from Farm Equipment found roughly 54% of dealers at the time did not support the strike, while 37% said they did and 8.5% weren’t sure.
In the earnings call for John Deere's fiscal year 2021 earnings report, John Deere execs shared details of the UAW strike’s financial impact on the company. Director of Investment Relations Josh Jepsen said, “Over the six-year contract, the incremental cost will be between $250 million and $300 million pretax per year, with 80% of that impacting operating margins.” He adds that Deere expects equipment operations for the coming first quarter to be unchanged year-over-year, as “missing a few weeks plus of production will neutralize some of the benefits … of ramping up to higher line rates in December and January.”
Click here for an in-depth timeline of how the 2021 John Deere strike unfolded.
2004 CNHI Strike
CNH Industrial last faced a strike with UAW workers back in 2004, which a 2004 report from FarmProgress stated was centered around “the company's desire to align union worker compensation and health care more closely with the company's many non-union employees.” The report stated that, at the time, around 650 of CNH Industrial’s 10,000 North American employees were represented by a union.
"Since CNH began discussions with the UAW almost a year ago, we have had one objective in mind: to achieve a contract that is fair and equitable for all parties, enabling us to be competitive in the global marketplace we serve," said CNH Chief Negotiator Tom Graham said in the 2004 FarmProgress report. "Our final proposal encompassed the changes needed to begin to bring labor costs at our UAW-represented facilities from double the average cost levels of our other North American manufacturing facilities to an acceptable level."