Deere says 800 workers to leave under voluntary program; 1st-year savings of $75M seen

Deere says 800 workers leave in voluntary program

MOLINE, Ill. — Deere & Co. said Tuesday about 800 salaried workers have decided to leave the world’s largest farm machinery maker under a voluntary separation program.

The number of workers taking the offer was about four times as many as the company expected when it announced the program in April and represents about 3 percent of Deere’s overall salaried work force.

The company expects to realize $75 million in savings in the first year, after pretax expenses of about $100 million recorded mostly in the fourth quarter. Previously, the company expected $50 million in savings.

In April, the Moline, Ill.-based company said it would combine its agricultural and commercial and consumer equipment divisions. The job cuts are intended to help the company reduce costs and meet customer needs more efficiently.

Deere said at the time it expected to eliminate about 200 salaried jobs.

Spokesman Ken Golden said Tuesday more employees — many with more than 20 years experience — took the offer to leave. The company has 27,500 salaried workers, he said.

Golden did not know what the terms of eligibility were.

Deere 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 have made 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.

Shares fell $2.20, or 5.2 percent, to close at $39.95 Tuesday.