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Details of tentative Deere agreement released, local union vote is Tuesday

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Strike 24

John Deere workers stand on the picket line outside the Engineering Center after the UAW went on strike Oct. 15 in Waterloo.

MOLINE, Ill. — Union workers at Deere & Co. would get wage increases of 10% in the first year and 5% each in the third and fifth years under a tentative contract reached between the farm-equipment maker and the United Auto Workers union.

The workers would get 3% lump sums in the second, fourth and sixth years of the deal. They would also get a ratification bonus of $8,500 and no changes in the cost of their health insurance, according to a summary of the agreement posted Sunday on the union website.

The company and the UAW reached a tentative agreement Saturday that would cover more than 10,000 workers at 12 Deere locations in Iowa, Illinois and Kansas. However, a strike that began Oct. 14 will continue while workers review the terms of the deal ahead of a ratification vote.

Union members previously rejected a proposed contract that included immediate 5% raises for some workers and 6% for others, and 3% raises in 2023 and 2025.

The Moline, Illinois-based company reported $4.7 billion in net income for the first nine months of its fiscal year, more than double the $2 billion of the same period a year earlier.

A labor shortage affecting many industries also gave workers more leverage to demand better pay and benefits.

The new tentative agreement offers improved wages and benefits from the initial agreement, which was overwhelmingly voted down on Oct. 10.

Wages

Workers would receive an immediate 10% increase in wages in the first year and an additional 5% in the third and fifth years, according to the contract summary.

For example, a pay level four non-CIPP employee with an hourly wage of about $25.73 would increase to $28.30 after ratification of the agreement. From that wage, the employee’s hourly pay would increase by $5.09 over the course of the next six years.

In comparison, in the voted-down agreement, the level four non-CIPP employee would have received a total hourly wage increase of $1.31 at the end of the six years, about a 5% increase.

On the off years, the second, fourth, and six years, workers would get 3% lump sum payments. Upon ratification of the contract, workers would receive a $8,500 bonus.

The proposed cost of living adjustment would protect against inflation and adjust every three months with inflation. The first adjustment would be effective in December.

Health care

There would be no changes in the cost of health insurance under the new agreement. Workers would pay $0 in premiums, have no deductibles or coinsurance, and no changes in co-pays.

Union members would receive two weeks of fully-paid parental leave. The insurance would also cover autism care and vision costs, including exams, frames, and lenses.

New hires would receive health care coverage after 30 days of employment on the first of the following month.

Retirement

Current and future union workers would be able to choose between the traditional plus and choice plus retirement plans.

Both plans offer a defined benefits pension, an increased multiplier for monthly pension for each year of service and all employees would fully own their pension after three years of service. The retirement bonus for both plans would total $37,500 for 10-24 years of service and $50,000 for 25 years or more.

The traditional plus plan’s post-retirement health care fund offers a cash balance savings at 2.5% for one to four years, 3% for five to 14 years, and 4% to 15 years and over. There will also be $2,000 worth of seed money per year of service.

The choice plus plan is offered to all post-1997 employees. It includes a dollar for dollar 401(k) match up to 6% for 2022, then $0.70-$1 match for each year after. The specific match amount would be determined based on company profits. The company also will contribute 5% of employees’ annual wages to their 401(k).

In comparison, the last agreement stated that those hired before 1997 have a full pension and health care plan when they retire. Those who joined the company after 1997 have a smaller pension and a 401(k), but no health care. Under the original proposed contract that was voted down, those hired on or after Nov. 1 would only have a 401(k).

Those hired before 1997 still have greater benefits than the ones proposed in the most recent tentative agreement.

Voting

Ratification voting will take place in-person from 10 a.m. to 2 p.m. Tuesday at the National Cattle Congress grounds, according to a Local 838 Facebook post.

Strike duties will be suspended for the duration of the voting window, but will resume after 2 p.m. until ballots are counted for all 11 locals. If the contract is ratified, the strike will end with the notification of results.

Courier reporter Jeff Reinitz contributed to this story.

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