Iowa Plant gets $100 Million Deere Investment

Bloomberg / Business Week

MOLINE, Ill.

Deere & Co. has announced it will invest about $100 million to modernize the John Deere Foundry in Waterloo, Iowa.

According to Deere, the modernization work will take place over the next 4 to 5 years. The project will allow the heavy equipment maker to improve manufacturing capacity and flexibility.

According to Deere executive David Everitt, the integrated approach in the design and manufacturing of large row crop and four-wheeled-drive tractors gives the company a competitive advantage.

Wednesday's announcement by Moline, Ill.-based Deere was made in conjunction with the Iowa Department of Economic Development. The department agreed to provide tax incentives to Deere to retain the Waterloo Foundry jobs in Iowa.

Deere is the world's largest maker of agricultural equipment. It also makes construction, forestry and landscaping equipment, such as backhoes, excavators, riding mowers and leaf blowers.

Tax Breaks Save 300 Deere Jobs

WCF Courier

DES MOINES --- The state of Iowa saved nearly 300 John Deere jobs in Waterloo last week when it granted state tax credits for a massive company reinvestment in its Waterloo Foundry, according to documents Deere filed with the Iowa Department of Economic Development.

Deere filed the documents in application for the tax credits, approved by the Iowa Department of Economic Development board.

Deere will get $15 million in tax credits and indirect financing from the state of Iowa, as it invests $90 million in modernizing its Waterloo Works Foundry over the next four years. A company press release issued last week placed the investment at $100 million.

In the process, 60 salaried positions and 235 hourly positions in Waterloo were retained. Jobs performed by those employees would have been outsourced, had an agreement not been reached, according to the documents.

Deere also noted in its application for tax credits with IDED that the Waterloo Works Foundry buys more than $82 million in material, supplies and services from Iowa suppliers.

"If the Foundry's operations were outsourced, most, if not all, of these materials, supplies and services would not be purchased in Iowa," the company wrote in its application.

In going forward with the update project in Waterloo, Deere will get a $9 million investment tax credit and a $6 million Doubled Research Activities Credit.

The project's time line is as follows: A new mold line and core processes is scheduled for completion in 2012; new blast and auto grinding processes, completed in 2013; and infrastructure and office renovation, completed in 2014.

Modernizing the Waterloo Foundry, which was built in 1972, was necessary, as "many of the processes are nearing obsolescence," Deere noted in its filing with the state.

According to the documents, the company was not considering moving its foundry operations outside of Iowa if it did not secure the tax credits.

"The objective of the project is to decide whether John Deere should manufacture the casting internally in Waterloo or outsource the production to third-party suppliers," the company said in its application. "If the casting business is outsourced, the vast majority of casting volume will go to suppliers outside the U.S.

"The company is not considering internal manufacturing of these castings in any other state. This project is simply a make vs. buy decision."

According to documents Deere supplied to IDED, at the end of 2009, Deere listed 12,718 workers in Iowa, including 5,664 workers at its Waterloo Works. Other Deere manufacturing plants in the state are in Davenport, 1,070 employees; Dubuque 1,778; Des Moines Works in Ankeny, 1,480; and Ottumwa, 1,026. The company also has John Deere Credit in Johnston, 1,072 workers, and Intelligent Solutions Group in Urbandale, 272, as well as 356 other employees located across the state.

Corn Rises on Pickup in Demand

Associated Press

Corn prices rose Thursday after a monthly Department of Agriculture report showed demand for the crop continued to grow while supplies dwindled.

Corn for July delivery is up 5 cents at $3.4325 a bushel.

John Sanow, an analyst with Telvent DTN in Omaha, Neb., said the USDA's report is proof that demand is strong for corn, particularly from ethanol producers.

The USDA raised its projection for ethanol use based on continued record pace of production of the fuel. While demand for corn rose, supplies fell. The USDA reduced its estimate for ending stocks from the 2009-2010 season.

However, the jump in corn prices could be temporary.

"We still have issues working against us," Sanow said, including what appears to be a sizable crop currently growing. When corn that was planted this spring is harvested in the fall and winter, it could significantly bolster supply and weaken prices.

It would likely take a major weather event destroying corn plants to drive prices to the $4 a bushel level, Sanow said. Corn hasn't traded above $4 a bushel since early January.

Deere Plant Finishes 500,000th Combine

WCF Courier

 

EAST MOLINE, Ill. - More than 80 years after introducing its first combine, John Deere Harvester Works has rolled its half-millionth self-propelled combine off the assembly line in East Moline.

The machine - a 9870 model - will be on display all summer at the John Deere Pavilion in downtown Moline. It also will make an appearance at the Farm Progress Show, Aug. 31-Sept. 2 in Boone.

"Reaching 500,000 self-propelled combines is a significant milestone for us," said Dennis Muszalski, Harvester Works' factory manager.

Muszalski added that the milestone "celebrates generations of dedicated employees who have been part of Harvester Works and part of the greater Quad-Cities community."

On May 19, the combine was presented to its new owner, Greg Briggs of Cisco, Ill., as part of the John Deere Gold Key program. The program provides customers with an exclusive tour of the factory and the opportunity to be the first to start their own machine on the line. Briggs will take ownership of the combine this fall after Deere displays it. Gold Key owners receive special plaques.

The factory first began producing binders in 1910, just two years before Deere broke ground on the current John Deere Harvester Works. The factory initially manufactured horse-drawn grain binders, mowers, rakes and corn binders.

In 1927, Deere introduced its first combine - uniting harvesting and threshing in one operation. Twenty years later, John Deere manufactured the company's first self-propelled combine.

The East Moline facility manufactures four combine models as well as a complete line of front end equipment. It employs about 2,400 people - including employees at the John Deere Product Development Center in Silvis, Ill.