Strike Causes Deere $192.6-Million Loss

Deere & Co. said it lost $192.6 million in the first quarter of fiscal 1987 and attributed the loss to a work stoppage that shut down production for more than five months.

The first quarter, which ended Jan. 31, fell during the company’s labor dispute with the United Auto Workers. The employees went on strike Aug. 23 at three plants, and the company locked out workers at its 10 remaining farm and industrial equipment production facilities in Iowa and Illinois the next day.

The loss, the largest quarterly deficit in the company’s history, compared to a restated loss of $26.9 million during the same period in 1986, Deere said.

The Moline, Ill.-based firm said revenue for the quarter ended Jan. 31 declined 32% to $478 million from $701 million.

“North American farm equipment production was down 59% and farm equipment sales to dealers decreased 22%,” mainly because of the labor dispute, which ended Feb. 1, said Chairman Robert A. Hanson. There was some production during the quarter because factories in Canada were operating and there was slight output by salaried employees.

The company’s overseas business also incurred a loss.

“The farm equipment business overseas weakened . . . due to deteriorating economic conditions for farmers in Europe and elsewhere,” Hanson said. “This trend is expected to continue.”

He said that while higher production levels are expected for the remainder of the year to make up for the first-quarter lag, it will still be well below available capacity.

“Earnings will remain under considerable pressure” but should be above those of last year, Hanson said.