Moline-based agricultural machinery giant John Deere has publicly addressed concerns regarding its manufacturing footprint, firmly denying claims of shifting production to Mexico in response to potential tariffs. This rebuttal comes after former President Donald Trump threatened the company with a significant 200 percent tariff, should he win the upcoming election and if Deere were to move manufacturing out of the US to Mexico. The company clarified its position, emphasizing its long-standing presence in Mexico is strategic and not indicative of a broader shift away from US-based manufacturing.
Rumors of production relocation have circulated following recent layoffs at John Deere, leading to speculation about the company’s future strategy. However, Deere has consistently maintained its dedication to American manufacturing. In a recent statement, a company spokesperson reiterated that less than 5% of John Deere’s US sales originate from products manufactured in Mexico. Conversely, over 75% of all sales within the United States are attributed to products manufactured in US-based facilities. This data underscores the company’s continued reliance on its domestic manufacturing capabilities.
“We have maintained operations in Mexico since 1952,” the John Deere spokesperson stated, highlighting the history of their international presence. The company clarified that considering various global factors is a normal part of their business operations. This strategic approach allows them to optimize their global footprint while simultaneously investing in new product development within the United States, citing examples like the See & Spray technology in Des Moines and the 9RX tractor in Waterloo. The spokesperson directly linked recent layoffs to the current downturn in the agricultural economy in 2024 and a subsequent decrease in customer orders, firmly separating these workforce adjustments from any production shift to Mexico.
Addressing specific instances of operational changes, John Deere acknowledged the previously announced move of cab production to Ramos Component Works in Mexico, a decision made in 2022. This transition, affecting approximately 250 jobs at the Waterloo plant, is slated for completion this year. Furthermore, plans are in place to transition the production of mid-size skid steers and CTLS to Mexico by 2026. Similarly, in 2022, work at the Ottumwa plant was also identified for relocation to Monterrey, Mexico. These targeted movements, however, are presented as strategic adjustments for specific product lines, not a wholesale abandonment of US manufacturing.
Tami Hedgren, Vice President and Manufacturing Lead for US/Mexico Ag & Turf at John Deere, reinforced this commitment in a video posted on the company’s website. Hedgren explained that “tough business decisions” are necessary based on economic forecasts. Referencing USDA predictions of a 24% decrease in net farm income in 2024, she emphasized the need for layoffs and workforce reductions as responses to these economic pressures. Hedgren conveyed optimism for future economic recovery, stating that these difficult decisions are essential to ensure the long-term success of both John Deere’s customers and the business itself during fluctuating economic cycles.
In conclusion, John Deere has firmly responded to tariff threats and clarified its manufacturing strategy. While acknowledging a strategic presence in Mexico for specific operations, the company underscores its enduring commitment to US-based manufacturing. The recent layoffs are attributed to a weakening farm economy, not a shift in production to Mexico, reinforcing John Deere’s dedication to American manufacturing even as it strategically leverages its global operations.
