Deere & Co to reduce output in North America
Deere & Co to reduce output in North America
By Andy Collings
DEERE & Company is to scale back equipment production in North America after a slowdown in the demand for certain product sectors.
As a result, earnings for the second quarter ending Apr 30 are expected to fall below those for the same period last year.
But the company insists that, with no major adjustments concerning the production planning of European factories, only North American operations are affected.
Chairman and chief executive, Robert Lane, says: "Continued caution on the part of customers has prompted our decision to reduce production."
He adds that products primarily affected include construction equipment – due to an extended retail sales slowdown – and ground care equipment – due to poor weather conditions. Mr Lanes list of affected sectors also includes big farm tractors.
Sales of row-crop tractors have also been relatively flat recently, which has resulted in a decision to close Deeres tractor manufacturing plant in Waterloo, Iowa, for one week in April.
Closer to home, the company continues to monitor the foot-and-mouth disease situation in Europe but concedes its impact on farm machinery sales is uncertain.
"The key issues affecting this uncertainty include the ultimate extent and severity of the disease, and the amount of government payment farmers are likely to receive for the loss of affected livestock," says Mr Lane.
"While we continue to set our sights on higher earnings for the year, the current environment is making this goal more challenging to reach." *