Retired John Deere employee Chris Laursen has responded to recent layoffs at the company related to a production shift to Mexico, as reported on “The Bottom Line.” Former President Donald Trump announced on Monday his intention to impose a 200% tariff on John Deere imports into the United States if the company proceeds with its planned production move to Mexico.
John Deere disclosed earlier this year that approximately 600 employees would be laid off from three plants effective August 30, as part of a strategy to transfer production of skid steer loaders and compact track loaders to an existing facility in Mexico by the end of 2026. The layoffs affected John Deere facilities in Davenport and Dubuque, Iowa, as well as East Moline, Illinois.
At a rally in western Pennsylvania, Trump stated, “They’ve announced a few days ago that they are going to move a lot of their manufacturing business to Mexico. I am just notifying John Deere right now that if you do that, we are putting a 200% tariff on everything that you want to sell into the United States.” This marks the first instance of Trump extending such a tariff threat to an agricultural equipment manufacturer, although he has previously threatened automakers with similar measures for moving production to Mexico.
John Deere has justified the move to Mexico as an effort to optimize its factories for future products, enhance operational efficiency, and capitalize on locations both in the U.S. and globally with a growing labor force.
The company highlighted its substantial investments in U.S. factories, totaling over $2 billion since 2019, which include a new X9 combine assembly line in East Moline, Illinois, a See & Spray line in Des Moines, Iowa, new tractor line assemblies in Waterloo, Iowa, and a new excavator factory in Kernersville, North Carolina.
John Deere elaborated that to enable its U.S. factories to engage in high-value activities, it is sometimes necessary to relocate less complex operations, such as cab assembly, to other locations. This includes the production of certain models of skid steer loaders and compact loaders moving to the facility in Mexico, which has been part of John Deere’s global operation for nearly 70 years.
The company has been navigating economic challenges over the past year, including high interest rates and lower commodity prices, leading to forecasts predicting a 24% decline in farmer net income in 2024. These factors have influenced farmers to delay purchasing new equipment, prompting John Deere to adjust its production and optimize operations to align with current market conditions.
This report included contributions from Reuters.