MOLINE, Ill. (AP) _ A bigger-than-expected decline in demand for farm equipment has led Deere & Co. to extend summer plant shutdowns by up to five weeks.
``We’re responding to the marketplace,″ Deere spokesman Ken Golden said Thursday. ``Retail demand for farm equipment in North America we now predict to be declining by 25 percent this year. Just three months ago we were talking about 20 percent. So, it continues to weaken.″
The 1,400 employees at the Harvester Works in East Moline will be out of work for three weeks in May and again for two weeks at the end of July. That July shutdown leads into the plant’s annual shutdown, which runs July 26 to Aug. 8.
The Seeding Group in Moline, with 280 factory workers, will shut down from May 3 to the end of the month. The company had also previously announced that its plant north of Des Moines, Iowa, which makes cotton-harvesting equipment, would shut down four separate weeks of the summer.
Earlier this week, Deere reported a 75 percent drop in first-quarter profits from a year ago.
Golden said the decision to extend the regular vacation shutdowns has less to do with profits and more to do with the level of inventory owned by Deere and in dealer showrooms.
``We are attempting to match our production with customer demand,″ he said. Demand for combines and large tractors has fallen sharply from a year ago as farmers try to cope with commodity prices driven down by a glutted global marketplace at a time of financial turmoil in Asia, Russia and Latin America.