In late September, Donald Trump made a surprising statement during a campaign rally, although Trump’s behaviour is now generally so consistently bizarre that it’s difficult to call any statement surprising. But this one caught the ag community a bit off guard.
Earlier in the year, John Deere had announced it was moving some production out of the U.S. to one of its plants in Mexico. It’s not the only brand to reveal it has moved, or will move, some production there in recent years. In fact, most brands either assemble or source components from plants all across the world, including low-cost production points such as in India.
But in an apparent attempt to gain favour with potential voters in the November presidential election, Trump specifically targeted John Deere, saying he would slap a 200 per cent tariff on any machines manufactured outside the U.S. if it went ahead with that relocation.
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That caused John Deere’s stock price to slump 1.5 per cent following the announcement.
The statement seemed to spark a social media storm as well, where some claiming to be farmers declared a boycott on buying any more John Deere equipment. In all probability, though, that likely remains the equivalent of a tempest in a teapot. Deere is by far the largest ag equipment manufacturer and is likely to remain so for the foreseeable future.
All of this hasn’t gone unnoticed at John Deere. The company itself took to social media to ensure any potential U.S. customers it’s not making a wholesale relocation of its production out of the country. In a statement posted to YouTube, the green brand’s spokespersons spelled out Deere’s commitment to U.S. manufacturing.
“Over the past five years John Deere has spent over $2.5 billion in investing in U.S. factories,” says Fabio Castro, VP and factory manager for the brand’s Waterloo Works. “Deere employs over 30,000 people distributed over 60 locations in 16 states.”
Some of that investment has gone toward installing a new production line for the recently-introduced very-high-horsepower 9RX tractor line at Waterloo, Iowa; a new See & Spray sprayer line at Des Moines, Iowa; and the X9 Combine assembly line at East Moline, Illinois.
Tami Hedgren, vice-president and manufacturing lead for the U.S. and Mexico for the brand’s ag and turf division, addressed the reason for the need to cut production costs during the current downturn in equipment sales.
“This year we’re seeing lower commodity prices and increased interest rates. As a result our customers are choosing to delay some of the purchases of new equipment. This isn’t just impacting John Deere, it’s impacting the entire ag industry and our competition. In this economic climate we’ve had to make some really difficult economic decisions.”
In late October Deere announced an expansion to its ag and turf training centre in Florida. The facility provides training support for dealers across the U.S. and Canada on agriculture, turf, and compact construction equipment. The expansion project is targeted for completion in spring 2025.
