Deere employees approve contract with change in production incentives
The main change in the contract with Deere & Co. that UAW members approved on Thursday concerned elements of the company’s production incentive program.
The company divides many of its production workers into shifts and offers an additional payment if a group exceeds set targets, for example for the number of tractors it manufactures in a week. If a team exceeds the goal of 15%, members receive a 15% pay raise on their weekly check.
If the team exceeds the goal by more than 15%, the company still only pays them an extra 15% for that week. In these cases, the company sets aside more money for the workers, but only pays them every 13 weeks.
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For example, if a team member normally earns $ 1,000 per week and the group exceeded their production goal by 20% in a given week, the company will pay the worker $ 1,150, or 15 % more than the employee’s base salary.
At the same time, the company takes an additional $ 50 for each worker – the extra 5% they haven’t received for this week – and puts it in the fund. After 13 weeks, or once a quarter, the company distributes the amount of this fund among all team members.
The new incentive system will pay off more often
As part of the new contract, the company said it would increase the amount it pays each week to 20% above the production target. This means that a worker who earns $ 1,000 per week will receive $ 1,200 on a check instead of $ 1,150. Generally speaking, change accelerates when workers receive the extra money.
Managers also promised not to increase production targets as aggressively as in the past.
Previously, if a team averaged over their 20% goal for six months, the company would change their goal. Either managers have told workers to produce more goods each week, or they have reduced the size of the team while expecting them to produce at the same rate.
Increasing goals is supposed to make the business more efficient. But raising the bar also means weekly wage cuts, even though workers are performing as well as before.
Abe Elam, a worker at Deere’s Ottumwa Works and the sergeant-at-arms of United Auto Workers Local 74, said workers have long complained about the way the company runs the program. Even when teams struggle to meet goals, he said, managers shift some of the workers to other tasks, leaving the rest of the team on the verge of reaching the goal with less. members.
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Elam said these employees were doomed. And yet, he said, managers have not listened. To voice their concerns, workers had to file grievances with the union, triggering legal proceedings with a mediator that could take years.
“Basically you didn’t know what you would have paid week to week and year to year,” Elam said. “… Often (leaders) simply say, ‘It is the worker who is lazy, who does not want to produce.’ Well, it is not. The 7,000 employees (based on incentives) are lazy, aren’t they? It’s ridiculous.
“It’s because of a lack of parts. It’s because of a lack of manpower. It’s because of the standards they gave us.”
As part of the new deal, the company said it will task specific managers to investigate why some teams are not meeting their goals. Union leaders hope managers will make changes to support these groups.
Diana Swartz, an assembler on the spray line at the John Deere Des Moines plant in Ankeny, said she voted for the contract because of her 10% pay rise, but hoped the changes made to the incentive program would work.
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She said her team members have become frustrated this year because Deere has struggled to get parts from suppliers. Even as workers continue to do their jobs, she said, her team’s goal of making 22 sprayers a day has been impossible since this summer. On their best days, they made 16.
“Our (incentive program) was so bad,” she said. “It’s happening. Nothing is being done about it.”
Tyler Jett covers jobs and the economy for the Des Moines Register. Contact him at [email protected], 515-284-8215, or on Twitter at @LetsJett.