The United Auto Workers (UAW) announced late Sunday that its membership voted down a proposed two‑year extension of the collective bargaining agreement with John Deere that would have carried the contract through 2029.
The proposed extension included 4% annual wage increases and $3,000 bonuses each year, with no changes to pensions or health care benefits.
Positions from both sides
UAW president Shawn Fain sharply criticized Deere for layoffs and said the union wants a more lucrative package now that the company’s financial position has strengthened. “Our members rejected Deere's offer to extend their contract because they know their worth and what they deserve,” Fain said in a statement. He added that the company failed to address members’ chief concerns, especially job security, and signaled: “We'll see Deere at the table in 2027.”
Deere said it was “disappointed” by the vote and expects to return to negotiations before the contract expires in October 2027. “We proposed the extension because we believe added stability and certainty would benefit our employees, customers and business in a challenging environment,” Deere’s statement said.
Why this matters now
Traditional equipment makers like John Deere have experienced a sharp sales and stock rebound in 2026 tied to demand related to artificial intelligence. Deere’s stock rose about 40% in 2026. The company reported that sales in its construction and forestry segment increased 18% year‑over‑year to $3.62 billion. Operating profit in that segment jumped 84%, and the operating margin rose from 7.7% to 12.1%.
At the same time, Deere warned that overall demand remains well below 2021 levels, competition is intensifying, and the outlook for a significant recovery is uncertain.
Broader labor context and political implications
Union leaders have become more vocal about the effects of AI on work, calling for protections and criticizing wealthy executives who seek automation. Liz Shuler, president of the AFL‑CIO, told Axios in June: “You're either with workers or you're with millionaires.”
Shawn Fain gained national prominence in 2023 after leading an unprecedented strike against General Motors, Ford and Stellantis that produced record pay increases. He is running for reelection as UAW president this year, and in recent months his name has been floated as a possible dark‑horse candidate for U.S. president.
Labor experts say the Deere negotiations could serve as a test of how aggressively the UAW will press gains in a sector that is benefiting from AI‑driven demand. Arthur Wheaton, director of Labor Studies at the Cornell ILR Buffalo Co‑Lab, told Axios: "I think they're going to learn that he bargains hard and he has a lot of people behind him. And it's an election year — the last thing he wants is a soft contract."
What to watch next
If talks break down or lead to work stoppages, reduced availability of construction equipment could become a bottleneck for data center construction tied to AI expansion. That risk is amplified by existing order backlogs at equipment makers such as John Deere and Caterpillar.
The parties are expected to return to the bargaining table before the contract’s October 2027 expiration; the outcomes will determine pay, job security and benefits as Deere navigates stronger near‑term results amid uncertain longer‑term demand.
