John Deere: Thousands of Employees Go on Strike! (October-November 2021)
Case Controversy
John Deere is a company that manufactures agricultural, forestry, and lawn care machinery and equipment, as well as diesel engines. They have proven immense success as profits have never been this high. However, the business is being looked down upon after the release of a six-year contract in September of 2021. The employees were upset because it does not include new tiers to retirement benefits. In fact, the contract presents that anyone hired after November of 2021 will lose benefits. The overwhelming majority of workers rejected this offer, and the strikes began in multiple states this year during the week of October 11th.
Timeline of Notable John Deere Events
The employees’ strike against John Deere has continued to extend into its third week as the business refuses to release a new and improved contract (Bloomberg). In September of 2021, workers represented by United Auto workers (UAW) voted 99% in favor of authorizing the strike against the six-year contract proposal from the company. Within the contract employees were to receive a larger wage increase, a bonus of $8,500, and no new tiers to retirement. In early October close to 90% of union members rejected the contract. Many of the employees feel as though their work deserves better rates than what they have been offered. Staff wanted new improvements to the contract but instead were informed that all new hires after November 2021 will lose retirement benefits. The regular payments made during each person's retirement from any John Deere investment funds are being taken away. This was not the ‘upgrade’ the workers were expecting. On top of this, workers report feeling that they should be receiving more from the business considering that company profits are the highest they have ever been. This year alone, John Deere is on track and expected to produce between $5.7 billion and $5.9 billion dollars (Bloomberg). From 2016 to September 2021, John Deere managed to profit $1.667 billion dollars. About $5 billion was spent on dividends with another $4.95 billion put towards share repurchases. This means $10 billion in total was given to shareholders during the six years of the previous contract (Times). This seems like a positive action; however, it can take on a second view.
The employees see it as the company taking advantage of staff by not paying each of their 69,600 employees an additional $142,000 over the last six years. It was also brought to attention that the CEO gave himself a 160 percent raise. Employees were not happy to hear that he did not keep their salaries in mind when making new changes.
The workers feel cheated out of the system and were forced to take a stand. They felt what they were offered was not acceptable considering all the extra participation they provided the company with throughout the seemingly never-ending COVD-19 pandemic. They were there when the business needed them the most. When the virus first broke out and started becoming a problem in August, about 4.3 million people quit their jobs. The people who continued to hold their position at John Deere during such a chaotic time feel like they deserve more from the company. They were forced to work an excessive number of overtime shifts consisting of 10-12 hours daily during the week and Saturdays. An employee of 17 years states, “…they don't understand that it's not like we make a substantial amount of money. I mean, nobody's getting rich here, and if you do make more money, it's because you work so much that you might as well live here,” (Insider). He makes it known that this entire situation is about employee respect, not greed. He feels as though if the workers do not push back for the benefits that they deserve, then businesses will continue to strip them of their rights. People are tired of the layoffs and profit losses when the business is doing better than it ever has.
For these reasons, during the week of October 11, 2021, more than 10,000 John Deere workers committed to going on strike. This spread across 14 John Deere plants in Iowa, Colorado, Illinois, Georgia and Kansas.
Unfortunately for everyone who is on strike, “Deere & Co. said the new contract it provided to striking union employees is the company’s best and final offer, and they aren’t returning to the bargaining table,” on November 3, 2021 (Bloomberg). As of today, November 14, 2021, workers remain on strike while the John Deere company holds firm on what they have to offer in the contract.
Stakeholders
The stakeholders in this specific case would include the CEO of John Deere, the employees who currently work for the company, the employees who are on strike against the company and future new hires of John Deere. The CEO, John C. May, is in a great position when it comes to his profits. The current employees and those on strike will be affected positively if the company decides to make changes to the six-year contract. People who are hired after this month will be better off if changes are made as well. How the future shareholders are affected depends upon how the establishment decides to handle this entire situation. The positions that the business is taking against the employee's opinion are affecting their reputation. Back in the day one family member could work for this firm and provide for a family. Today, employees need a second income to assist John Deere to provide for a family. In addition to that, this is now the second big strike against the corporation, the first taking place in 1986. John Deere’s next move will also affect the general public because if they choose to benefit their employees, the prices of products may rise, and consumers will be forced to pay more.
Individualism
An individualist would view John Deere’s way of handling this event as permissible. The rules of individualism state that business actions should be made in efforts to maximize profit within the extent of the law. In order for these actions to be ethically wrong, the business would have to be making less money than they are capable of, or the business would be responsible for breaking the law. There are two views on this theory created by Friedman and Mechan, both are satisfied by John Deere’s decisions.
Friedman believes, “The goal of business is to profit, so the only obligation that the businessperson has is to maximize profit for the owner or the stockholders within the law of the land” (Salazar Slide 10). Mechan’s approach is similar in the sense that he believes, “The only direct goal of business is to profit, and the primary obligation of the business is to maximize profit within the law” (Salazar slide 12). The difference is that he has a side note of understanding that the direct goal, “...may need to be met by indirect goals which are not aimed at profiting” (Salazar 12). This comes into play in the John Deere predicament when it comes to judging the companies’ choices.
First, it must be confirmed that the business hasn’t broken any laws by offering this six-year contract. This is true, and business owners are allowed to create contracts that employees may not be satisfied with. These employees have The Right to Work, which is the freedom to leave a job at any time for any or no reason with no adverse legal consequences. If the employees are not happy with what the company has to offer, then they can remove themselves. According to Individualism, just because something doesn’t make people happy doesn’t mean that it is wrong. John Deere was permitted to release the six-year contract.
Secondly, we analyze the company’s profits to make sure that they have been maximized.
Profit statistics:
First 9 months of 2020: $1.99 billion; First 9 months of 2021: $4.68 billion
Additionally, “Deere’s international net sales and revenues for the third quarter of 2021 increased 29 percent, to $11.527 billion. Equipment operations net sales were $10.413 billion for the quarter and $29.461 billion for the first nine months of the year, while for the same time period last year they were, respectively, $7.859 billion and $22.612 billion” (WSWS).
In essence, John Deere is currently very successful and has been growing substantially over the years. They haven’t broken any laws along the way of producing and offering the six-year contract. Indirect goals that assist the direct goal are now becoming visible and the company must make a choice. They need to decide if keeping their staff or standing their ground on the contract is the indirect goal. In the scheme of things, the business may decide that keeping those employees is not important when it comes to maximizing profit. The firm is in fact making permissible decisions either way according to the individualism theory of ethics.
Here it is visible that over the past five years John Deere has been increasing their profits as their stock trends are great while reaching an all-time high in May of this year
Utilitarianism
Utilitarianism is defined as making the choice among all possibilities that maximizes happiness for all individuals able to feel happiness (conscious or sentient) while also considering short & long-term consequences. A utilitarian would not view John Deere’s approach to the situation as the most beneficial. Utilitarianism is considered as the choice among all possibilities that maximizes happiness for all individuals able to feel happiness (conscious or sentient) considering short- & long-term consequences. Rather they did something that would more-so benefit them while looking good to the public, which is what resulted in the employees to decline the offer.
John Deere (Executives): Rather than meeting the demands that the striking workers had, they chose to create a contract that would only slightly benefit the workers, and after they had been rejected, the company refused to speak of the workers on strike and are replacing them. This approach only benefits the executives as it ultimately did not change what was happening.
Striking Workers: The workers would not benefit from the approach John Deere has been taking, as the offers the company has given them still do not allow the workers to have a livable wage, or any other benefits besides healthcare. They are still on strike, even as it gets closer to winter.
Future Employees: Future employees will benefit from this case depending on its ending. If the company gives what the workers are demanding, then future employees will be able to work with a livable wage and multiple benefits that can help them and their families. If the company does nothing for the workers, then future employees will continue to struggle with the pay that the company provides given the dangerous work environment.
General Public: The general public will also benefit from the case depending on its ending. If the case ends well, then production rates will increase, and customers will be able to buy products much more easily due to an increase in stock. If the case ends badly, production will drop, making it harder for products to always remain in stock. It can also make the public not want to purchase the products knowing the way the company treats their workers.
Deere’s actions during this case were not ethical. Despite having similar situations in the past, Deere continues to only do what is best to make them look good to the public, rather than supplying their workers with the best living conditions.
Kantianism 1
Under Kantianism the basic principles are to act rationally and consistent in your actions within the rules you expect others to follow. Don’t lie, cheat, steal or deceive others, be truthful and honest and not disrespect people and treat them like a mere means. People should be motivated by goodwill, seeking to do what is right because it is right holding back from impermissible actions, doing what is morally required and rightly motivated (Salazar 5-6). Throughout this case John Deere has been impermissible because they are inconsistent with their employees. They ask so much of their employees, especially through and since covid and won’t give them what they deserve in return. Between the wages, benefits, and schedules John Deere has not put their employees at value. The formula of humanity says, “Act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a mean” (Kant, MM 429). Basically, saying to act rationally and treat people with value instead of using them for something else.
It is all about the respect the company should be giving the employees but aren’t. According to Kant there are only three maxims that are morally praiseworthy. I will be honest in order to gain trust, I will be honest because that is the kind of person I am or because I like them, and I will be honest because that’s the right thing to do (Salazar 14). John Deere doesn’t have any motivation to do the right thing and isn’t acting out of respect. I understand John Deere is running a company and needs to be successful, but they must think of their actions and if they harm others. By working their employees the way they are and not giving them what they deserve it harms their employees and could down the line harm the consumers.
Kantianism 2
The ethical theory Kantianism supports four main ideas. Acting rationally, so do not be inconsistent in your own actions or consider yourself exempt from the rules. Allowing and helping people make rational decisions. Respecting people for their individual differences and needs. Lastly being motivated by Good Will, which means seeking to do right because it is right. Kantianism stresses not lying, cheating, or manipulating. The categorical imperative is the law of rationality which is the supreme law of reason that will tell you if something is rational or not. If the action passes the test, it is rational and permissible, but if not, it is irrational and impermissible. One of the formulas of the categorical imperative is the Formula of Humanity. This formula guides you to act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means. If you don’t, you are allowing other people and yourself to be lied to and it may lead to irrational things. Looking at the John Deere case and comparing it to Kantianism, the case is impermissible because out of the formula of humanity the John Deere employees are not treated with the respect they should be getting from their authority. Therefore, Kantianism fits the John Deere case the best because the main issue within this case is that the employees are not respected within the company they are working for, and the company is walking all over them.
Overall, the main reason for the strike for the workers must deal with the lack of respect they are getting from their company and authority figures. The employees have tried many times to go to the authority figures and discuss the issues they were having only to not even be heard or considered. If the employees were respected their voices would be heard and the strike would not have occurred if they were getting the proper pay that they deserved. That is the reason that Kantianism is the ethical theory that fits this case the best.
Virtue Theory
Virtue theory is defined as a good person who functions well and that means rationality to get along well in society, character traits that enable this are virtues. In simpler terms, in order for us to get along in society and function well we use our rationality and by doing this we will become good people. The main virtues are honesty, courage, temperance, justice, and fairness. In the John Deere case, the virtue theory can help us decide if the stakeholders were following the virtues or not. Then once we figure that out, we can conclude with whether virtue theory would judge this case as permissible or impermissible.
CEO John C. May: John C. May has been the CEO of John Deere Company since November 2019. Looking at his main virtues of honesty, courage, temperance, justice, and fairness. I believe in this case May does not follow any of the virtues. May was not honest with himself or his employees. May knew the amount of money the business was making and was going to generate in the future and still decided to have poor wages for his employees and give them barely any benefit after they retire. Making his employees feel like they did not do a good enough job for a pay raise which they did. Instead of giving his employees a raise he gave himself a raise. May did not have courage. He let it get to a point where workers needed to strike to get his attention. May is too worried about money rather than being courageous. John C. May did not follow the temperance virtue. He could not refrain himself from proposing a horrible six-year labor contract. Lastly, May did not follow justice or fairness as you can see from the contract he gave out and the result of many of his employees striking.
The Union: The Union followed all the virtues except temperance. Their job was to help John Deere Company propose a labor contract for the employees of their company. They did what they thought was in the best interest of John Deere’s employees. The Union followed honesty, courage, temperance, justice, and fairness virtues the best they could with what they were given. They are still looking to make changes as they see the workers are upset with the labor contract. The union stated “The company’s best interest is in the hands of the employees and the public view. We will do everything we can to propose a plan that suits everybody well” (The Union).
Employees of John Deere: The employees of John Deere Company follow all of the virtues except temperance. It is not easy standing up to a big company in order to get justice for yourself. The employees of John Deere had the courage to be able to walk out of work and strike for better wages and working conditions for themselves and future employees. They followed fairness and justice virtues by making sure they got justice for all of the employees of John Deere while making sure it was fair. The employees had every right to go on strike. They were honest with themselves and thought they deserved better pay so they did something about it. However, they did not follow temperance as they did go on strike. Usually that is the last option. But what needed to be done was done.
After going through some of the important stakeholders and deciding whether they were following the main virtues. The virtue theory can judge this case as impermissible. The workers nor John Deere executives used their rationality to get along in society. This resulted in conflict between John Deere and their employees. Although some stakeholders followed some of their virtues, nobody followed them all. The employees and executives of John Deere wanted what was in their own self-interests instead of being rational and creating a contract that will make everyone body content and that way the workers would not have had to strike, and John Deere would not have gotten all this bad press.
Action Plan
The problem with the John Deere case is that the company is recording record profits, but they are not keeping the employees in mind when releasing new contracts. With all this money being made some of it should eventually trickle down to those who helped make it all possible. These workers have made the decision to go on strike as they feel disrespected by the company. They state over and over that it is not about getting rich, that all they expect from the business is a pay rate which one can live off. While on strike these people are demanding higher wages and better benefits from the company but John Deere refuses to give in and alter the recent six-year contract.
The course of action that John Deere should follow as this event drags on can be summed up in three major steps. First, the business should allow the workers who have gone on strike to communicate their needs for returning, not just to the public, but to John Deere directly. The company needs to understand what these people are going through and why they made the decision to go on strike. If their side is not explained to powerful people of the business who are willing to listen, then nothing can be done for them. Secondly, John Deere needs to analyze and come up with a contract that covers these problems. This can be started by looking over the old contract and finding the flaws based off what the people on strike had to say. Once the company comes to a new agreement that satisfies the asks of its current ex-workers, it can be released to all employees. Third, if there is a reasonable request that is not met, employers of the company need to communicate why the firm will not agree to include the appeal for solution and come up with an alternative way to solve the issue.
A statement that could be used to guide John Deere throughout this process is, “Listen to the people, and find a new way to accommodate their reasonable needs”. This statement maps out the major steps of the action plan. Listen, look over the old contract, make changes to the old contract based on what the workers on strike have to say, and release the new contract. The mission statement is the complete opposite of what John Deere is doing right now. Currently they are not making themselves available to speak with those on strike, and they are refusing to release a new and improved contract. This new approach to the situation is better than the way the company is handling things right now because it will bring the employees back to the business. John Deere will get all of their ex-workers back if a new contract is accepted by the people and they will not have to search for new help to hire. John Deere’s reputation will also improve as the public realizes that the business does indeed care about the wellbeing of their staff. The way things are being delt with right now is making the company look selfish and forcing employees to leave left and right.
Some core values that the firm may want to keep in mind as they go about their new plan of action would be to always keep the employee's safety first and to always be honest with them. The company John Deere seems to have been more focused on the profit within the company they overlooked how their employees were being treated. Another core value would be to set more consistent workdays and hours for their employees so that they are not being schedule with very short notice and they have more of a consistent wage to life off. One more core value would be to secure more job safety for their long-time employees so that they are not inconsistently hiring and firing new employees. The last core value would be to increase their pay wage with minimum wage so they are not falling behind the livable salary.
John Deere can ensure ethical productivity and monitoring of ethics in the future to prevent this problem from occurring again. They can ensure this by running frequent surveys within the employees to make sure they are being heard and to see if anything has arisen that is unethical within the company. They can also prevent this from occurring in the future by having authority figures run health and safety checks within the business to make sure there are no major issues that are standing out. They can also schedule monthly or yearly meetings with long-term employees to see if they have any feedback on how the company can improve the productivity and make sure everything is being run ethically.
This new plan will promote business profits and productivity because the John Deere employees will be more willing to work for the company knowing that they have better health and safety standards, better job security, and more livable wages. The company had a major decrease in the number of applications they were getting due to the lack of employee respect and how they were being treated. It conforms to the mission and core values and ensures good ethics because if they focus more on their employees who are the ones that are making John Deere’s profits for them, they are more likely to get harder working employees who will be more efficient with their work. If the employees are not getting treated fairly the strike will continue and John Deere will keep losing their expected amount of profit for the year.
Molly Zaffino
Alyssa Smith
Julia Frappier
Brianna Yashenko
Colleen Furlong
References:
Bloomberg.com. Bloomberg. Accessed November 15, 2021. https://www.bloomberg.com/news/articles/2021-11-03/deere-says-rejected-deal-is-best-and-final-offer-to-workers.
“Deere & Company.” DE - Stock quote for DEERE & COMPANY - MSN Money. Accessed November 15, 2021. https://www.msn.com/en-us/money/stockdetails/fi-a1qvjc?ocid=ansMSNMoney11&duration=1D.
“For the $10 Billion It Gave Shareholders, John Deere Could Have given Each Worker $142,000.” In These Times. Accessed November 15, 2021. https://inthesetimes.com/article/john-deere-strike-shareholders-workers-contract.
Gregg, Aaron. “More than 10,000 John Deere Workers on Strike after Rejecting Contract.” The Washington Post, WP Company, 15 Oct. 2021, https://www.washingtonpost.com/business/2021/10/14/john-deere-workers-strike/.
“I'm Striking at John Deere. We're Tired of Layoffs and Benefit Losses While the Company Hits Record Profits.” Business Insider. Business Insider. Accessed November 15, 2021. https://markets.businessinsider.com/news/stocks/john-deere-strike-worker-on-the-fight-for-fair-wages-2021-10.
“John Deere Announces $1.6 Billion in Third-Quarter Profits, Enough to Pay Every UAW-Deere Worker $160,000.” World Socialist Web Site. Accessed November 15, 2021. https://www.wsws.org/en/articles/2021/08/21/deer-a21.html.
Killin, Jamie. “I'm Striking at John Deere. We're Tired of Layoffs and Benefit Losses While the Company Hits Record Profits.” Business Insider, Business Insider, 28 Oct. 2021, https://www.businessinsider.com/john-deere-strike-worker-on-the-fight-for-fair-wages-2021-10?fbclid=IwAR0tjMK6vdzbvRVUEEYLL2uxpSGVQmTbds13CPW1k_VvYnTZ14uLIv3XW6k.
“More than 10,000 John Deere Workers on Strike after Failed UAW Deal.” NBCNews.com, NBCUniversal News Group, 15 Oct. 2021, https://www.nbcnews.com/news/us-news/more-10-000-deere-co-workers-strike-after-failed-uaw-n1281486.
“Over 10,000 John Deere Workers Strike over 'Years' of Poor Treatment.” The Guardian. Guardian News and Media, October 14, 2021. https://www.theguardian.com/us-news/2021/oct/14/john-deere-workers-strike-contract-union.
Roth, Carol. “What UAW's John Deere Strike Tells Us about Workers and What They Deserve: Carol Roth.” Fox Business. Fox Business, October 19, 2021. https://www.foxbusiness.com/economy/uaw-john-deere-strike-workers-carol-roth.
Scheiber, Noam. “John Deere Workers Strike in Contract Dispute.” The New York Times, The New York Times, 14 Oct. 2021, https://www.nytimes.com/2021/10/14/business/economy/john-deere-strike.html.
Heather Salazar’s Power Point Lecture Slide #2, Business Ethics and Economics and Individualism
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