Deere Moving Utility Vehicle Production to Wisconsin

-- Associated Construction Publications, 9/5/2008

Deere & Company is closing its manufacturing facility in Welland, Ontario, Canada, and transferring production to company operations in Wisconsin and Mexico. The Welland factory manufactures utility vehicles and attachments for the commercial and consumer equipment and agricultural equipment businesses. Deere said that by consolidating manufacturing capacity the move supports ongoing company-wide efforts aimed at improved efficiency and profitability.

Production of Gator utility vehicles, made at Welland, will move to Horicon, WI, where other models of the popular product, as well as riding lawn equipment, are built. The Gator utility vehicles are often used for transportation on construction jobsite. Production of cutting and loading attachments will be transferred to Deere installations in Monterrey and Saltillo, Mexico. The Welland plant is scheduled to close by the end of 2009.

Approximately 800 employees will be affected by the closure. The company has advised the Canadian Auto Workers, which represents production workers at Welland, of the decision. If the union should request to do so, Deere will have further discussions about the transition associated with the closure and its effect on employees.

Deere’s action is expected to result in after-tax charges of approximately $90 million, about half of which will be recorded in the fourth quarter of 2008. This amount was not reflected in the company's earnings forecast for the quarter of $425 million issued last month.