April 9, 2009
Deere puts 160 workers on indefinite layoff on weak demand
US agricultural equipment company, Deere & Co., announced 160 indefinite layoffs at its Des Moines, Iowa, factory, set for later this month due to reduced demand for the factory's products.
The world's largest manufacturer of farm equipment has been placing workers at several of its factories, including several other factories in Iowa, on layoff because of the demand slump.
The 160 layoffs will take place April 27. The Des Moines Works manufactures tillage, planting, spraying and cotton-harvesting equipment.
Many farmers have opted to delay buying higher-priced equipment like tractors ahead of the planting season, leaving sellers stuck with inventory produced during last year's boom. Crop choices are also likely to reduce the demand for new farm equipment this year, industry experts and financiers have said.
An increase in soy productions and a move away from corn will reduce farmers' production expenses and put less wear and tear on tractors, because soy do not require the nitrogen fertiliser needed to grow corn.
Sales of tractors and combines in the US this year are expected to fall by 5 percent to 15 percent from 2008, according to industry estimates, ending the record rise in revenue and profits experienced by machinery makers Deere, CNH Global NV and Agco Corp.
Deere's shares closed Tuesday (Apr 7) at US$34.98 and haven't traded premarket.
