Deere plans $70M expansion in Waterloo to upgrade tractor manufacturing – Waterloo Cedar Falls Courier

WATERLOO, Iowa — Deere & Co., already in the midst of a $100 million upgrade of its foundry operation in Waterloo, today announced an additional $70 million investment to expand its Waterloo Works.

The news comes just two weeks after Deere announced a seventh-straight earnings record, with a net income of $532.9 million, or $1.30 per share, for the first quarter, compared with $513.7 million, or $1.20 per share, a year ago.

Deere has reported strong demand for large tractors and said the investments announced today will increase the number of tractors Deere can build in Waterloo by the middle of 2013.

“Through this initiative, we will increase our manufacturing flexibility and speed,” said David Everitt, president of the Worldwide Agricultural & Turf Equipment division, in a news release.

“The market demand John Deere has experienced for large agricultural equipment has remained strong for several years. We believe the time is right to invest in our facilities to meet future demand for the large John Deere tractors that help our customers meet the world’s growing demand for food,” Everitt said.

Thad Nevitt, factory manager in Waterloo, said it’s a vote of confidence in the local workforce.

“It’s exciting for us in Waterloo,” he said. “It’s a vote of confidence in all the folks in the community here. The whole community pitches in to help our company be successful. They support this capacity as well, and it reinforces other discussions of how we continue to build the business and how important the community is to that.”

The expansion will not lead to more manufacturing jobs at Deere’s Waterloo plants, which employ more than 6,000, the company said.

It’s a good sign, nevertheless, said Steve Dust, CEO of the Greater Cedar Valley Alliance & Chamber.

“It shows the kind of strength and partnership Deere and the Cedar Valley have developed, with them relying on this entire economic region and the talented people here to help them fulfill their business plan and, in this instance, to fulfill global demand for tractors,” Dust said. “It should also show everyone that onshoring is a real trend and our corporate partners understand the value of investing in places like the Cedar Valley that can show its productivity and value in the production cycle.”

Tractors built in Waterloo are shipped to more than 130 countries.

Today’s announcement is not just a show of strength in Deere’s recent quarterly statements; it’s a sign of things to come, according to Eli Lustgarten, an analyst who tracks Deere for Longbow Research.

“Looking outside the U.S., they’re going to need more capacity, and that speaks to the coming demand,” Lustgarten said. “You’re not getting hung up on what the demand is now; you’re looking to the next couple of years. Demand already was up 30 percent, and it’s essentially telling you that in a couple of years, the current level of demand is not the peak level but is more of a sustainable level.”

The $70 million investment will increase capacity by more than 10 percent, Deere said, adding that once the expansion is completed, enhancements to the Waterloo Works will have increased manufacturing capacity for large tractors by more than 50 percent since 2002.

“The John Deere Waterloo Works are an important part of the company’s global manufacturing strategy,” Everitt said. “Not only does Waterloo produce whole goods in the form of the large tractors, the operations also manufacture components that are used in John Deere machines built at other facilities.”

EARLIER STORY

WATERLOO, Iowa — Deere & Co. said today it will invest $70 million to expand the manufacturing capacity in its Waterloo operations, where the company builds large farm tractors that are used around the world.

Deere has previously reported strong demand for large tractors and said the investments announced today will increase the number of tractors Deere can build in Waterloo by the middle of 2013.

“Through this initiative, we will increase our manufacturing flexibility and speed,” said David Everitt, president of the Worldwide Agricultural & Turf Equipment division. “The market demand John Deere has experienced for large agricultural equipment has remained strong for several years. We believe the time is right to invest in our facilities to meet future demand for the large John Deere tractors that help our customers meet the world’s growing demand for food.”

 The $70 million investment will increase capacity by more than 10 percent. Once the improvements announced today are completed, enhancements to John Deere facilities in Waterloo since 2002 will have increased manufacturing capacity for large tractors by more than 50 percent.

“The John Deere Waterloo Works are an important part of the company’s global manufacturing strategy,” Everitt said. “Not only does Waterloo produce whole goods in the form of the large tractors, the operations also manufacture components that are used in John Deere machines built at other facilities.”

Tractors built in Waterloo are shipped to more than 130 countries each year and are used by the most productive agricultural producers in North America and around the world. Approximately 6,000 individuals are employed in John Deere’s various Waterloo operations. Today’s investment is not expected to add manufacturing jobs.