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What's in Deere's new offer: Changes to incentive programs for UAW workers
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What's in Deere's new offer: Changes to incentive programs for UAW workers

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Janet Harris, of Davenport, center, and other picketers strike outside of the John Deere Parts Distribution Center Monday in Milan.

More than a month into a strike, 10,000 Deere & Co. workers with the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America are set to vote on a third tentative agreement on Wednesday.

The latest includes modifications to the company's Continuous Improvement Pay System (CIPP). These changes are the only differences from the second agreement, rejected in a 55% to 45% vote earlier this month. That agreement gained majority support from some Quad-City union locals but was rejected by locals in Waterloo and Dubuque.

Some Deere officials, workers and union representatives said the incentives program could be confusing. One worker from the John Deere Parts Distribution Center in Milan, who has been working at Deere for over a decade, said for newer employees, it could be difficult to grasp the full extent of how the program impacted their pay. 

"If you're not the people who work with this every day, they are having problems chewing through some of it," the worker said.

What is CIPP?

CIPP is a team-based sharing system that provides an opportunity for employees to make extra money when they demonstrate a level of performance over a long period of time. Workers are put into CIPP teams that can make extra money when they perform at or above baseline productivity set by Deere. Only some Deere production workers are under the incentive program, so the language doesn't impact all employees. 

The program aims to streamline production processes among workers to increase productivity. New production goals are set for teams that hit benchmarks, and workers earn additional pay based on their ability to hit the benchmarks.

In the latest tentative agreement, there would be an expected productivity increase of 4% each year, instead of being divided into half years. This way, employees adjust production levels only once a year but maintain the same increase in productivity goals. 

Employees would also be paid more in weekly incentive bonuses under the new agreement. In the new tentative agreement, the base level productivity pay for employees on CIPP would equal 120%, a 5% increase.

Workers' concerns

Workers who've criticized the program say while it's designed to boost productivity, it's often difficult to hit the threshold that triggers pay increases. Workers want the company to make further investments in tools and equipment as production goals increase.

“The company says we're supposed to make enough improvements, that we're supposed to compensate for that,” a worker at Davenport Works said. “But the company itself has not made those improvements over time.”

Although workers are officially required to work toward productivity levels that reach 120%, employees reported being told they should reach 130%. A Davenport worker said reaching increasingly higher production goals began to take a physical toll. 

“I realized real fast I just tore up my body and slowed me down as a human,” the worker said.

Also in the contract are terms that protect worker earnings in case of supply-chain disruptions, a common problem across the industry during the COVID-19 pandemic. Although there were supply-chain protections for workers in the new tentative agreement, workers said that it would have been ideal to see specific wording on under what situations their earnings are protected.

“To me as a person working on the floor, the machine breaks down for a week or two, that's catastrophic downtime,” a worker at the John Deere Parts Distribution Center in Milan said. “That's a large impact on my wages. But to the company, they say, well, the roof has to fall on the building before it can get catastrophic. They left it very vague.”

Some workers said they'd vote in favor of the contract despite their concerns over how the new contract was worded. 

“Deere talked about shifting a little bit of contract language, which is what they told us in the beginning,” one worker who plans to support the deal said. “CIPP has always been a problem. (Deere) stuck to their guns.”


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