The wages and benefits of a union-represented job at John Deere Dubuque Works may be hard to match, but local economic development leader Rick Dickinson said other jobs are available to help recently laid-off workers stay on their feet and remain in Dubuque.

For the 100 blue-collar workers getting put out of work, Dickinson said demand is high for similar positions at other companies in Dubuque, particularly skilled jobs such as welding.

“It’ll be difficult to match the wage, but I do have confidence that there are jobs out there,” said Dickinson, president and CEO of Greater Dubuque Development Corp.

For white-collar workers, it could be harder to switch jobs without leaving Dubuque, but GDDC has 180 employers that list openings on AccessDubuqueJobs.com, and Dickinson is working with local companies to list more, particularly for those positions.

“We have a unique opportunity where talent is available,” Dickinson said. “The last thing we want to lose is anyone impacted by the Deere layoffs.”

John Deere officials announced last week the layoff of 34 people at the Dubuque Works plant amid global reductions to its salaried staff. And last month, the company announced plans to lay off about 100 Dubuque production employees effective Aug. 30, also as part of broader staff reductions.

Deere has cited industry factors such as rising manufacturing costs and falling demand as reasons for the layoffs.

“While the decision to reduce roles across the company was a challenging one, the company is confident that these adjustments, coupled with our ongoing efforts to reduce costs and align production and inventory levels, will position John Deere strongly for the future,” Deere officials wrote in a statement last week.

Dickinson said GDDC plans to reach out to everyone affected by layoffs individually while also holding a job fair Sept. 5 at Steeple Square focused on laid-off Deere employees but open to the general public.

Dickinson said he expects layoffs connected to John Deere to rise to about 200 people in August and September as the loss of production at the Dubuque facility ripples into locally based suppliers and distributors, including trucking companies. While noteworthy, that number is a fraction of the overall labor force in Dubuque, and he does not expect the local unemployment rate to rise substantially.

Fiscal year 2023 looked like a banner year for John Deere. The company’s net income attributable to Deere was $10.2 billion, up from $7.1 billion the fiscal year before, according to a news release.

“2023 looked great from a short-term perspective but not a long-term perspective,” said Peter Orazem, an economics professor at Iowa State University. Even as Deere enjoyed the moment, the stock value began declining.

Orazem said John Deere’s production decline in Iowa is being driven by two different, unrelated factors.

“John Deere is getting squeezed by higher costs and less willingness to spend on the part of the customer,” Orazem said. “Clearly, interest rates are a problem if you are selling very expensive equipment” and buyers aren’t paying cash for it.

Long term, the company would like to cut labor costs by moving some of its production to Mexico — particularly its lighter, more competitive implements such as skid loaders. That move will lead to fewer blue-collar jobs in Dubuque and other cities.

But the white-collar job losses are driven by more immediate problems in the market for Deere, namely higher interest rates to finance heavy equipment and a downturn in commodity prices.

“Once you start laying off your salaried management workers, it shows you have a real problem and don’t expect an easy solution,” Orazem said.

Prices for corn and soybeans are at historic lows, with the lowest rates per bushel, adjusted for inflation, since 2005. Commodity prices for wheat are not quite that low but still down to their lowest level since before the pandemic.

A look at two competitors shows John Deere is protected somewhat against negative agricultural trends thanks to its construction equipment division, which has seen increased demand driven by federal infrastructure investments.

The stock price for Caterpillar, which manufactures construction equipment, increased 30% in the past year, while Case New Holland, which primarily manufactures ag implements, has seen its stock price dip by 30% since July 2023.

Deere, one of the largest agricultural implement manufacturers in the world, focuses about half its production on construction, forestry and residential lawn mowers and has seen its stock fall 12% in the same 12 months.

Lucas DeSpain, assistant director at United Auto Workers Region 4, held out hope John Deere jobs would return when the ag market improves but said the planned longer-term move of production to Mexico would make that harder.

“Many of us who have been around the ag and construction manufacturing sector for a while have seen this story play out, several times,” DeSpain wrote in an email. “That doesn’t comfort anyone wondering where their next paycheck will come from, but the farm economy is historically cyclical. What does inflict additional pain is the fact that Deere & Co. is choosing to outsource work to Mexico, on top of this downturn. That may mean, in essence, UAW members facing layoff now may not have a job to come back to when orders pick back up.”

Deere earlier this year announced plans to shift some production from Dubuque Works to a planned facility in Mexico in 2026.

Officials said the move aims to add manufacturing flexibility for the construction and forestry division, which includes the Dubuque plant, “by establishing a new, globally competitive manufacturing operation.”