Latest round of John Deere layoffs unfortunate but not surprising, conservative think tank associate says
Manufacturing workers in Illinois suffered yet another blow this week when a major machinery manufacturer announced the layoffs of hundreds of workers in Illinois, an associate for a Chicago-based conservative think tank said in a recent article.
"These layoffs are unfortunate, but not surprising considering Illinois’ toxic business environment, which makes the state unattractive to employers looking to set up shop or expand their operations," Brendan Bakala, a marketing associate at Illinois Policy Institute in Chicago, said in an article posted on the institute's website. "Illinois has the highest property taxes in the nation, as well as one of the costliest worker’s compensation systems in the entire country. Both high property taxes and an expensive workers’ compensation system hurt production businesses, such as manufacturers, disproportionately."
On Aug. 22, Deere & Co. informed employees at two locations, its Davenport and Waterloo works, that about 145 production workers will be placed on indefinite layoff. Around 30 employees in the Quad Cities area will be laid off at the Davenport Works on Sept. 30, while about 115 employees will be laid off Sept. 23 at the Waterloo Works in Southwest Illinois, all based on seniority, according to published reports.
That announcement came exactly one month after Deere & Co. informed employees at its John Deere Harvester Works in East Moline to expect 120 production workers to be placed on indefinite layoff Sept. 6. The factory's workforce includes about 1,050 production employees, according to the July 22 announcement.
In March, Deere & Co. also announced the indefinite layoff of 125 employees in two Iowa factories. That workforce adjustment affected about 75 employees at John Deere's factory in Dubuque and about 50 at the facility in Ankeny, according to the March 10 announcement.
Deere & Co., still popularly known as "John Deere", is an agricultural, construction, forestry machinery manufacturer founded in 1837 that maintains facilities around the world.
Earlier this month, Deere & Co. reported its third-quarter earnings were $488.8 million, or $1.55 per share, down from the $511.6 million, or $1.53 per share, reported over the same period last years. Worldwide net sales and revenues were down by 11 percent over the first nine months of this year, compared to the same period last year, and there was a 9 percent decline in this year's third quarter, the earnings report said.
The company said in its layoff announcements that it continues to adjust the size of its production workforce to market demand for products manufactured at each of its factories.
"However, this news is only the latest in a downward trend Illinois manufacturers experienced in the past several months," Bakala said in his article. "In July, Illinois lost 300 manufacturing jobs and while June saw a slight gain of 100 manufacturing jobs, this was dwarfed by the 1,100 factory jobs lost in May. In 2015 Illinois lost 6,200 manufacturing jobs while other states in the region saw gains in factory employment. Indiana had a better 2015, as it gained a net of over 4,000 manufacturing jobs. Indiana workers also enjoyed higher wages than their Illinois neighbors when adjusted for cost of living and taxes."
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