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Rising living costs due to inflation and a few other reasons (such as global supply chains being a mess), will force workers into a scenario where they have no

Rising living costs due to inflation and a few other reasons (such as global supply chains being a mess), will force workers into a scenario where they have no other reasonable choice but to strike as a bargaining tactic (if they can), as the companies aren't going to often voluntarily outpace inflation (ie inflation adjustment + normal yearly raises). The John Deere offer to labor for example was very mediocre. Deere can do a lot better, they're doing quite well right now, their operating income has climbed from $2.7b in 2017 to $7b in the last four quarters (and heading toward $9b). That kind of stinginess toward your unionized workers while the company is prospering will get you a strike. Societal turmoil (worker, consumer, business) is one of the many not fun consequences from higher rates of inflation.

refurb 5y ago
Deer goes through waves of big profits then loss. Looking at the last 4 quarters doesn’t give you the full picture. https://www.macrotrends.net/stocks/charts/DE/deere/revenue https://www.macrotrends.net/stocks/charts/DE/deere/revenue
- adventured 5y ago
  > Deer goes through waves of big profits then loss. No they don't. There's no magical set cycle of outsized profits and losses waves for Deere. Globalization and the world adding 80 million new people per year has created a potent demand for their product, which is why their sales have done well over the last ~5 years ($26b to $42b) - there's another 400 million mouths to feed in that time and another billion more on the way. And those people have more money to spend on calories than past generations. It adds up to the world needing a lot more farm output and a lot more farm equipment. > Looking at the last 4 quarters doesn’t give you the full picture. I wasn't only looking at their last four quarters. Their last five fiscal years have been stellar in fact and getting better by the year. Covid only barely slowed them down. This past decade has been the best, by a dramatic margin, in the history of Deere.
  - refurb 5y ago
    Look at the link. -30% growth in 2008, then 2015, then 2020. What do you mean “no they dont”?
angelzen 5y ago
What's the point of striking in the globalization era? The number of hungry would be workers that would gladly take 1/10th the meager salary of a Western worker is in the billions. What's to keep John Deere from uplifting the whole plant and shipping it to, for example, SouthEast Asia? Note that this is a long term lose-lose proposition for both workers and capital, see ARM China debacle for a textbook example. Alas I see no medium term disincentive on the horizon.
- LurkingPenguin 5y ago
  Offshoring has existed for decades but picking up and moving on a whim is not something companies do overnight. Things like access to raw inputs and availability of skilled labor are major viability factors. Also, global transportation is a mess right now. Container shipping rates are high and ports are backed up. It doesn't do a company a lot of good if it can't get its goods from the factory to the market they're sold in efficiently and at reasonable cost.
- Spooky23 5y ago
  Good luck getting your tools to Vietnam and your tractors back.
- wolverine876 5y ago
  There are many factors to factory location, labor cost being only one of them. As context, we would have to know what portion of their expenses are labor; it could be materials or machine tools or something else.
- bluGill 5y ago
  Shipping large equipment isn't easy, it doesn't fit in a standard shipping container, and there isn't enough demand to make custom ships (cars get custom ships )
- lotsofpulp 5y ago
  > What's to keep John Deere from uplifting the whole plant and shipping it to, for example, SouthEast Asia? They already would have decades ago if the labor cost arbitrage was worth it.
jdavis703 5y ago
My current job just gave me a double digit raise out of the blue recently. To be fair 2 of the 5 engineers on my time had quit recently. But still, the smart companies are giving raises before people strike or quit.

refurb 5y ago

Deer goes through waves of big profits then loss. Looking at the last 4 quarters doesn’t give you the full picture. https://www.macrotrends.net/stocks/charts/DE/deere/revenue https://www.macrotrends.net/stocks/charts/DE/deere/revenue

adventured 5y ago
> Deer goes through waves of big profits then loss. No they don't. There's no magical set cycle of outsized profits and losses waves for Deere. Globalization and the world adding 80 million new people per year has created a potent demand for their product, which is why their sales have done well over the last ~5 years ($26b to $42b) - there's another 400 million mouths to feed in that time and another billion more on the way. And those people have more money to spend on calories than past generations. It adds up to the world needing a lot more farm output and a lot more farm equipment. > Looking at the last 4 quarters doesn’t give you the full picture. I wasn't only looking at their last four quarters. Their last five fiscal years have been stellar in fact and getting better by the year. Covid only barely slowed them down. This past decade has been the best, by a dramatic margin, in the history of Deere.
- refurb 5y ago
  Look at the link. -30% growth in 2008, then 2015, then 2020. What do you mean “no they dont”?

angelzen 5y ago

What's the point of striking in the globalization era? The number of hungry would be workers that would gladly take 1/10th the meager salary of a Western worker is in the billions. What's to keep John Deere from uplifting the whole plant and shipping it to, for example, SouthEast Asia? Note that this is a long term lose-lose proposition for both workers and capital, see ARM China debacle for a textbook example. Alas I see no medium term disincentive on the horizon.

LurkingPenguin 5y ago
Offshoring has existed for decades but picking up and moving on a whim is not something companies do overnight. Things like access to raw inputs and availability of skilled labor are major viability factors. Also, global transportation is a mess right now. Container shipping rates are high and ports are backed up. It doesn't do a company a lot of good if it can't get its goods from the factory to the market they're sold in efficiently and at reasonable cost.
Spooky23 5y ago
Good luck getting your tools to Vietnam and your tractors back.
wolverine876 5y ago
There are many factors to factory location, labor cost being only one of them. As context, we would have to know what portion of their expenses are labor; it could be materials or machine tools or something else.
bluGill 5y ago
Shipping large equipment isn't easy, it doesn't fit in a standard shipping container, and there isn't enough demand to make custom ships (cars get custom ships )
lotsofpulp 5y ago
> What's to keep John Deere from uplifting the whole plant and shipping it to, for example, SouthEast Asia? They already would have decades ago if the labor cost arbitrage was worth it.

jdavis703 5y ago

My current job just gave me a double digit raise out of the blue recently. To be fair 2 of the 5 engineers on my time had quit recently. But still, the smart companies are giving raises before people strike or quit.