Oct. 04--WATERLOO -- At midnight last Wednesday, a sleepy sense of unease seemed to descend on a large portion of the local economy.
Contract time had arrived for the largest employer in the Waterloo-Cedar Falls metropolitan area.
Deere & Co., which builds all of its large tractors in Waterloo and employs more than half of its 10,000 manufacturing employees here, and the United Auto Workers launched negotiations on a new master labor agreement late in the summer and talks continued into last week.
The most recent six-year deal expired at midnight Wednesday.
A short time after midnight, Deere and union officials announced they had made a deal -- also covering six years.
"We've got a tentative agreement. It's something we can be proud of," said Tom Ralston, president of United Auto Workers Local 838 in Waterloo, who participated in the negotiations. "We'll bring it back, and we're going to give our members a chance to vote on it."
Ralston declined to disclose contract details until the ratification vote, which is scheduled for today at the McLeod Center at the University of Northern Iowa.
Eli Lustgarten, a stock analyst who tracks Deere for Longbow Research in St. Louis, speculated the contract would be fair to both sides.
"A six-year contract is probably going to outweigh the weaknesses," he said.
Lustgarten also commended both sides for not dragging out an already-difficult process.
Company and union officials after just one month of negotiations reached tentative agreement on the fourth consecutive six-year contract in the long history of bargaining between Deere and the UAW. Previous contracts were only three years in duration. The company and the union have avoided a major work stoppage for nearly 30 years.
The master agreement applies to numerous operations across Iowa, including plants in Davenport, Des Moines, Dubuque and Ottumwa, as well as five in Waterloo and Cedar Falls -- Drive Train, Engine Works, Tractor and Cab Assembly, Foundry and Product Engineering Center.
Deere and the UAW agreed at the outset of talks they would negotiate without commenting publicly.
"They're really close to the vest here with the news boycott," said Waterloo native Ron Seeber, a labor expert and professor at Cornell University in Ithaca, N.Y.
Seeber has some local Deere-UAW pedigree; he worked for the company in Waterloo in 1972-75, and his father, Jack Seeber, was president of UAW Local 838 in the 1970s and also later served on the Waterloo City Council.
Seeber noted the rank-and-file members wouldn't "rubber-stamp" the master agreement. Members will examine the agreement, discuss it and then vote on it.
"It is rare that the agreements are not ratified by the membership," he said, but negotiations would have to restart if that is the case.
Both sides went into contract talks knowing Deere was facing uncertain times globally, Seeber said.
"I don't know specific figures, but their export business has to be in a bit of difficulty because of the turmoil in China, and Brazil's economy stinks, as well," Seeber said. "It's hard for the union to argue that they should be getting a lot more out of the company."
A former Local 838 president, Dave Neil, mayor of La Porte City and former Iowa labor commissioner, as well as former member of the Iowa Board of Regents, said "Every negotiation takes on its own character."
Generally, "Both sides come forward with proposals and things they want to change and you start to weed things out," he said. "Every one seems to take on its own life, so to speak, and are based around those issues."
Neil also noted the union and Deere have maintained a "healthy relationship" for years. He said it's positive they chose not to make any part of their talks public.
"I think the worse thing people can do is start second-guessing," he said.
Waterloo resident and former Black Hawk County Supervisor Don Page knows how badly negotiations can go. He was president of Local 838 during the 1986-87 strike and lockout, which lasted 163 days. He agreed each contract takes on its own character.
"You don't know from year to year whether it's money issues or in the plant problems or wages or seniority," he said. "Every one is different. One time, years ago, it was unemployment benefits. Another time, it was the dental program. And, there's always the wage situation."
State Sen. Bill Dotzler, D-Waterloo, was part of Deere's rank and file for 31 years, 1973-2004, filled roles with Local 838 and "got to see a lot about negotiations" during his tenure.
"But it was always tight-lipped, and a lot of times people don't understand it's for the best they keep negotiations private and not get people worked up in the community," Dotzler said.
That philosophy comes, in part, from harsh lessons learned in the past.
"The union guys would make some kind of statement about how things were going and they got into back-and-forth, and the thing just made it more difficult," Dotzler said. "I think those times were reflective of when it was more adversarial between the company and the union. Now, the labor unions and John Deere have really worked in more of a partnership, so they don't want to talk about it (publicly). In fact, the local-level people don't get to hear."
There were local representatives at the talks in the Quad Cities, but they were there to work on items specific to local operations, "what they call 'local agreements,'" Dotzler said.
"I think the workers are kind of hoping optimistically they can kind of hang on to what they've got," Dotzler said, including, for example, health benefits.
"The health care stuff is out there in everybody's negotiations across the whole manufacturing industry," he said. "I suspect the real issues are going to be around health care because those costs are eating up a lot of individuals' wages and what they can give as an overall total package. With the volatility of the health care industry, that's a big concern."
"In most of these big unionized companies, it's been an issue for some time and it's been a lot easier to shift a lot more costs onto workers in terms of higher co-pays or lower contributions to health plans," Seeber said. "A lot of employers have been trying to figure out how to get out from underneath that burden a bit."
Negotiations generally focus on three general areas: health care, wages and "operating procedures within the factory," Dotzler said.
Talks also tend to address issues specific to certain types of workers the union represents, Dotzler said.
It's called "pattern bargaining."
In that case, a contract that might fit the auto industry might not work in the agriculture implement sector, Dotzler said.
"They try to pick a target within the ag implement stuff," he said. "The agreements they reach with Deere and Cat (Caterpillar) are all pretty similar, so you don't get an unfair advantage between one company and the next."
Nobody on either side ever wants a strike, Dotzler said.
"One of the things you have with a young workforce -- and you saw that with the layoffs -- you get a lot of young people who get accustomed to a reasonable salary and overcommit to what they buy and are unprepared for a strike vote," he said. "They don't want to strike because of their financial situation."
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