Deere & Co. has announced layoffs for more than 160 production employees in the Quad-Cities.
Because of decreased customer demand, Deere lowered its expectations for sales and net income as FY2019 progressed, Ken Golden, director, global public relations at Deere, said in an email.
“In response to these market conditions, Deere employees at two Quad-City locations were informed they will be placed on indefinite layoff," he said.
Golden said Oct. 1 about 50 workers at Harvester Works were informed they will be placed on indefinite layoff as of Oct 28. About 113 workers at Davenport Works also were informed they will be placed on indefinite layoff effective Nov. 18.
Each Deere factory balances the size of its production workforce with customer demand for products from their individual factory, he said.
No other Deere location is included.
"Despite uncertainties of current market conditions, we remain confident in our business strategy and long-term future," Golden said.
Mark Grywacheski, investment adviser with Quad-Cities Investment Group, said a number of factors are involved with the layoffs.
"Obviously, there is the U.S.- China trade dispute," Grywacheski said.
China has two key targets: The U.S. agriculture industry and the U.S. manufacturing industry.
"Deere has significant ties to both of these industries that have been targeted by China," he said. "Deere is really getting pummeled on both sides."
Additionally, the global economy is very weak, he said.
"In my opinion it is the biggest factor impacting the U.S. manufacturing industry," he said.
In 2019, the global economy is predicted to have its slowest pace of growth in 10 years.
China, Canada, Mexico and the European Union compose about 64% of U.S. trade.
"The economic growth rate of these four nations is a fraction of what is was two years ago," he said.
China, in 2019, is predicted to have the slowest pace of economic growth in 30 years.
ISM Manufacturing Index, a key measure of the health of the U.S. manufacturing industry, has been in gradual decline since August 2018, when it hit a 14-year-high. On Oct. 1, the index measured 47.8, the lowest index level since June 2009, he said.
The index benchmark is 50:50 and more means U.S. manufacturing is growing and expanding. Below 50 means it is contracting, he explained.
In May, Deere & Co. scaled back production at some of its major North American plants after trade disputes and bad weather hurt farmers’ incomes and lowered the demand for farm equipment.
Deere reported second-quarter earnings of $1.13 billion, or $3.52 per share, down from $1.21 billion, or $3.67 per share, during the same quarter in 2018.
Deere officials said forecasts were lowered because farmers weren’t buying as much equipment and were worried about dwindling crop prices, international trade disputes and extreme weather that delayed planting.
Deere manufactures large agriculture equipment, such as combines and tractors, in East Moline and Waterloo.