United States-More staff layed off at John Deere.
UNITED STATES-MORE LAY-OFFS AT TRACTOR MAKERS.
Deere & Co.’s layoffs grew Wednesday as its Ankeny factory announced plans to cut 160 of the plant’s 1,400 employees, effective April 27.
This year, Iowa ’s largest manufacturing employer has laid off 813 employees in the state, or 6.8 percent of its 12,000-employee factory work force.
The company said the Ankeny layoff is due to reduced market demand for products, such as tillage, planting, spraying and cotton harvesting equipment.
The Ankeny layoffs follow the indefinite layoffs of 305 production workers at the Davenport Works and 308 at the Dubuque Works. Those plants both make construction and forestry equipment.
Deere also has announced the indefinite layoff of 40 of the approximately 900 employees at the Ottumwa Works.
"We are adjusting the size of the work force to meet market demand," Deere spokesman Ken Golden said.
Deere’s Ankeny workers were informed of the layoffs Wednesday..
The layoff is the first at Ankeny since a 10-week shutdown in August 2001. The plant had 700 workers at that time, about half the work force of today.
Deere had foretold of tightening in February when it announced a 45 percent drop in its first-quarter profits and said its 2009 earnings would likely be 21 percent less than previously expected. Securities analysts said the layoffs reflect a U.S. farm sector that has been softened by low corn and soybean prices.
"Deere’s earnings will be under pressure for the rest of this year because of low commodity prices and serious weakness in foreign markets," said Eli Lustgarten of Longbow Research in Cleveland , Ohio .
Lustgarten said Deere’s sales would stay steady from demand for its mainstay tractors and combines, but "the problems in the global markets are spilling over to the U.S. "
Corn and soybeans are selling for about half of what they brought in U.S. cash and futures markets last summer. At Iowa elevators, corn rose an average of 1 cent Wednesday to $3.73 per bushel, and soybeans were up 16 cents per bushel to $9.59. On the Chicago Board of Trade, corn closed down 6 cents per bushel to $3.95 and soybeans dipped a cent to $10.03 per bushel.
Analyst John Kearney of Morningstar Research in Chicago said the U.S. agricultural sector "is down from where it was six months ago."
"Things are stronger for agriculture in the U.S. than in South America and Europe," Kearney said.
"For the U.S. farmers, the year 2008 was pretty robust. But there’s a psychological effect when they see corn and soybean prices go down."
Credit Suisse analyst Jamie Cook earlier cited a "more cautious view of farm equipment demand globally."
The analyst cited South America and Eastern Europe as regions where "the global financial crisis continues to restrict access to credit for farmers."
Deere’s shares closed down 55 cents to $34.43 per share Wednesday on the New York Stock Exchange.
The stock has traded as high as $94.89 in the last 12 months but fell to $24.51 in February as part of the general stock market slide. Deere’s shares had rallied with the rest of the market beginning in March.
The company also employs about 1,000 workers at the Deere Credit division in Johnston .
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