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.