MOLINE, IL (AP) Unionized workers at Deere & Co. on Monday ratified a new six-year contract with the farm equipment maker covering retirees and employees in five states.
The agreement boosts newer workers’ salaries, maintains company-paid health care benefits and prohibits Deere from closing plants.
The Moline-based company and the United Auto Workers reached a tentative deal last week, just hours before the old six-year contract was set to expire for nearly 7,000 workers and 17,000 retirees.
Eleven UAW locals ratified the agreement. The deal covers production facilities in Illinois and Iowa, and parts depots in Colorado, Georgia and Minnesota.
"This new contract provides solid economic gains, protects health care and pensions and strengthens job security," said Cal Rapson, a UAW vice president who heads the union’s agricultural implement department.
The new contract will bump the pay of workers hired since 1997, who were paid less under a two-tiered wage system under the previous agreement.
Those workers will see income rise by about $30,000 over the length of the contract, compared to about $25,000 for union employees hired before 1997, according to the UAW.
Only newer workers will receive wage increases under the new contract, which expires Sept. 30, 2009. Newer employees will receive 3 percent raises this year and in 2006, and a lump-sum bonus of 2 to 3 percent of annual earnings in the remaining years of the contract.
Workers hired before 1997 will receive similar lump-sum payments during the last five years of the agreement. All union workers will be given a $3,000 contract ratification bonus this year.
Deere will continue to pay employee health care premiums but will create a preferred-provider network beginning next year that specifies physicians employees can use, according to the UAW. Employees who use other doctors will be reimbursed at 80 percent of the network rate.
Deere also guaranteed that no plants will close during the length of the contract and agreed to review its subcontracting practices with the union, Rapson said in a letter to UAW members.
Deere is one of the world’s largest farm machinery makers, producing tractors, tillers and harvesting equipment. The company also makes construction equipment and other non-farm products, such as backhoes, chain saws and snow blowers.