Deere to combine divisions, cut 200 jobs
PITTSBURGH (AP)--Deere & Co., the world's largest maker of farm machinery, said April 14 it plans to combine its agricultural and its commercial and consumer equipment divisions, resulting in the elimination of about 200 salaried jobs.
The Moline, Illinois-based company has benefited from strong sales of farming machinery despite a drop in construction equipment orders amid the housing slump.
But the global credit crisis and lower crop prices have made it more difficult for buyers to obtain financing for new equipment, and Deere earlier this year slashed its 2009 earnings outlook and suspended quarterly forecasts.
Deere said the new operating model, effective May 1, will help it meet customer needs more efficiently and cut costs. Deere expects to record a pretax charges of about $25 million mainly in the fourth quarter of 2009.
Deere's worldwide agricultural equipment sales--its biggest operation--leaped 18 percent during the company's first fiscal quarter ended Jan. 31 as higher prices and increased volumes offset greater raw material costs and a stronger dollar.
But sales of commercial and consumer equipment--including products such as riding mowers and chain saws--slumped 25 percent, hurt partly by lower volumes amid the continued housing slump. Its construction and forestry sales slid 28 percent.
The new unit, to be called the agriculture and turf division, will have two presidents. David C. Everitt will be responsible for tractors and turf and utility products. Markwart von Pentz will oversee crop harvesting, hay and forage and crop care products.
The job cuts will take effect by the end of September. Deere employed about 56,700 people at the end of 2008, but the company has cut more than 1,000 jobs since the beginning of this year, citing the global economic slowdown.