Deere To Combine Divisions, Cut 200 Jobs

[OhioChick]

Source: AP

April 14, 2009

PITTSBURGH -- Deere & Co., the world's largest maker of farm machinery, said Tuesday it plans to combine its agricultural and its commercial and consumer equipment divisions, resulting in the elimination of about 200 salaried jobs.

The Moline, Ill.-based company has benefited from strong sales of farming machinery despite a drop in construction equipment orders amid the housing slump. But the global credit crisis and lower crop prices is making it more difficult for buyers to obtain financing for new equipment, and Deere earlier this year slashed its 2009 earnings outlook and suspended quarterly forecasts.

Deere said the new operating model, effective May 1, will help it meet customer needs more efficiently and cut costs. Deere expects to record a pretax charges of about $25 million mainly in the fourth quarter of 2009.

Deere's worldwide agricultural equipment sales -- its biggest operation -- leaped 18 percent during the company's first fiscal quarter ended Jan. 31 as higher prices and increased volumes offset greater raw material costs and a stronger dollar. But sales of commercial and consumer equipment -- including products such as riding mowers and chain saws -- slumped 25 percent, hurt partly by lower volumes amid the continued housing slump. Its construction and forestry sales slid 28 percent.


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