Deere, its employees, retirees, suppliers drive QC’s success

Quad Citians have long known that John Deere helps drive our economy. But a new, more comprehensive study of the extent to which that big green engine fuels the region has produced some rather high-octane results. Among the findings of the report, commissioned by Moline-based Deere & Co. and shared exclusively with the QCBJ, are these: In 2022, Deere & Co. not only generated $9.3 billion in direct economic impact in this community, but the indirect economic value created by Deere’s activities through its employees, retirees and their spouses totaled $12.9 billion. That amounted to 15% of the Quad Cities gross domestic product (GDP) in 2022.  Then there was the $3.6 billion in goods and services provided to Deere by its army of suppliers during that same period, according to the first-of-its-kind report. The study, entitled “John Deere’s Economic Contributions to the Quad City Community Area,” came in response to a key area of concern the community previously shared with the Moline-based global equipment maker.

“Just this year, we sent out a survey and we learned that people in our community care about economic security in our region above anything else,” said Laura Eberlin, John Deere’s global corporate social responsibility lead. “So that prompted us to do this analysis to understand the economic impacts that John Deere has in our region to support the economic security of the people in our region.” To make it happen, Deere hired the experienced Des Moines-based firm Regional Strategic Ltd. to conduct an economic analysis of Deere’s impact in Iowa as well as in the regions in which Deere has its biggest presence.  In the past, she said, “We’ve always talked about John Deere’s impact in terms of headcount.” For example, Deere knew that in 2022 there were 9,700 employees working in the Quad Cities region making industry-leading wages and benefits. But this analysis went “much, much deeper than just that mere number,” she said.

Analysis opens eyes

Some of the results the analysis produced for the Quad Cities were “eye-opening,” Ms. Eberlin said. The fact that Deere’s $9.3 billion of output in 2022 generated $12.9 billion in economic activity, for example, “was a huge wow for us,” she added. So was the $4.6 billion economic value added to the Quad Cities community through Deere’s activities.

Kanlaya Barr, director of corporate economics for John Deere, told the QCBJ the overall study also took into account the wages and benefits that active Deere workers and the region’s 6,200 Deere retirees invested in the community in 2022. She said those investments are “what happens when workers, proprietors and investors spend their earnings, i.e. for groceries, automobiles, dance lessons, houses, bowling, etc. To the extent that these expenditures are made within the Quad Cities Community Area they induce additional impacts within the local economy.” Ms. Barr also said that by considering that additional data this study offers a clearer picture of the ripple effect Deere and its facilities have on the entire seven-county area.  The four major impacts considered for the purposes of the study were: Deere’s production complex; the Quad Cities headquarters complex; income received by John Deere employees living in the region and those commuting to Deere facilities outside the area; and pension incomes received by Deere retirees and surviving spouses. The study defines the Quad City Community as the seven-county area of Rock Island, Henry and Mercer counties in Illinois, and Cedar, Clinton, Muscatine and Scott counties in Iowa. The analysis also showed that in addition to the direct impact of John Deere facilities in the Quad Cities and its corporate offices, activity at the Moline-based corporation also drives significant area job creation.  In fact, Ms. Eberlin said, another “big wow moment” from the study was learning that one in nine jobs in the region are created because of John Deere’s success in the Quad Cities. Those jobs  provide $2.8 billion in direct labor wages that go back into the community. When asked to share her takeaways, Ms. Eberlin told the QCBJ, “What makes me most proud is our longstanding success as a company and being a part of this community for 175 years and the most surprising to me was that over 32,000 jobs were created because of John Deere.” 

Suppliers help Deere leap

Contributing heavily to that job creation is the economic impact made by the suppliers whose products and services help keep the global equipment maker’s Quad Cities locations running like a Deere. Quad Cities Chamber CEO LaDrina Wilson told the QCBJ the report “really shined a light on appreciating not only our employees and our retirees, but our supply base and everything that they do to support our local economies.” She added, “As one of the top employers, this Fortune 100 company is important to the QC for a variety of reasons including growing our economy as well as providing great jobs that help build families and strengthen our community. In addition, John Deere partners with hundreds of suppliers in our region that create products that drive their supply chain and grow our GDP.”

Consider that the products purchased directly by Deere totaled $2.7 billion in 2022 and included everything from $306 million worth of steel to $4 million in paint, fuels and environmental services. In addition, the study said Deere’s activities touched 358 of the Quad Cities regions’ 375 industries in 2022. Olympic Steel is one of the suppliers that feeds the Deere engine. “At Olympic Steel, our decisions and behaviors are guided by 10 Core Values,” said Jeff Carson, general manager of the company’s Bettendorf facility. “We choose to partner with organizations that fit our business and share those values.” He told the QCBJ “John Deere is also a values-based company, committed to serving communities around the world and right here in the Quad Cities. That’s why it is our privilege to support John Deere’s mission of innovation – at home and abroad.” In addition, Mr. Carson said, “John Deere is an industry leader and a role model for corporate citizenship. We’re proud to call John Deere a key customer and premier partner.” Sears Seating, Davenport, also has had a longstanding relationship with John Deere that dates back to the 1940s. “In many ways, our partnership with Deere has challenged us to become the global leader in work vehicle seating we are today,” Sears Seating CEO Jim Sears told the QCBJ. “Deere continues to be one of our largest and most valued customers.” 

Small towns, big impact

The economic impact of Deere and its employees also stretches beyond the places they work to the places they live, big and small.  Among the small business owners who benefit from Deere’s reach is Donna Merideth. “Having been a pharmacist in the QC area for over 30 years, I have witnessed firsthand the impact that John Deere has made in our area,” Ms. Meredith said. “My husband and I currently own three independent pharmacies in the Quad Cities, two of which are in small rural towns,” she added. “A large number of our customers at Alwood Pharmacy (Alpha) and RidgeWood Pharmacy (Cambridge) are either current or past John Deere employees,” Ms. Merideth told the QCBJ. “Serving the retirees of this company is a significant portion of my business so the effects of the John Deere corporation are far reaching. Thank you to all who have been loyal John Deere employees and pharmacy clientele.” Deere’s Ms. Barr also said that this new analysis allows both Deere and the community to see how the company impacts the quality of life in communities its facilities and its employees call home. 

Taxes boost communities

In 2022, the study said, tax revenues generated from the economic contributions of the John Deere Quad City Production Complex alone totaled $741 million. That included $124.7 million to local governments, $17.5 million to county governments, $209 million to the states of Iowa and Illinois. The federal government also collected $389.6 million from the production complex.

Moline Mayor Sangeetha Rayapati knows firsthand the “tremendous” impact Deere’s presence has on her city. “Not only is it a company with global reach and impact, its local influence helps to keep us healthy and prosperous,” she told the QCBJ. “Perhaps one of the undersung benefits of their presence is the community service of  employees sitting on boards and committees who are charged with delivering on quality of place and our economy; committees like the (Moline) Plan Commission, Project Management Team, Police and Fire Commission, to name a few,” the mayor added. “This work complements the tremendous economic impact the company has on our town and region.” Illinois State Sen. Mike Halpin, D-Rock Island, said “When I go door-to-door in my role as an elected official, there’s hardly anyone that doesn’t have some connection to John Deere. Whether someone in their household works there, or a parent or grandparent, or their family has farmed land in the area, the impact runs deep here in the Illinois Quad Cities.” He added, “The money from the good-paying jobs and the pensions that Deere offers, and that the workers themselves have bargained for, stay right here in the community, and fuels the next generation of economic impact.” Speaking of the next generation, schools also win from Deere’s presence and its attention. United Township High School Superintendent Jay Morrow said “Deere has long been a cornerstone of our community. In particular, for the UTHS community, the impact is, arguably, immeasurable.” Consider, he said, that John Deere’s largest combine manufacturing facility, Harvester Works in East Moline, is within UTHS school district boundaries. So is Deere’s product development facility in Silvis and its IT/archives location in downtown East Moline. Its world headquarters in Moline also is just a mile from the UTHS campus, Mr. Morrow said. “The property tax base alone is significant,” he added. “Then of course the related businesses that support Deere as part of the supply chain offer another layer of tax base, as well as employment opportunities.”

Deere launches careers

UTHS also has enjoyed since 1990 a partnership with Harvester Works that offers UTHS and Area Career Center students hands-on experience in manufacturing technology that gives the students access to both Harvester Works and the product development plant.  “This partnership has produced many students prepared to enter Deere employment upon graduation, as well as offered select student scholarships to continue in the manufacturing field,” Mr. Morrow said.  UTHS also started an apprenticeship program with Deere in welding and computer science that allows students to be paid while learning, and graduate with a Department of Labor apprenticeship certification transferable throughout the U.S. In all, the recently released report reveals the details of what Mara Downing, vice president, global brand management and corporate communications, only hinted at during a John Deere Media Day held Sept. 18 at the John Deere Pavilion in downtown Moline.  “Our story isn’t just about our equipment. It’s just a small part of it. Our focus remains on our people and on our communities, the places we call home,” Ms. Downing said at that event. “We’re proud to be a part of the economic engine that propels this community forward and proud of the positive changes that we have helped to contribute to in this region.”    

Deere’s QC Community Area:

Deere’s 2022 QC economic impact survey is based on what it calls the John Deere’s Quad City area, which includes seven counties in eastern Iowa and western Illinois:

• Scott County, Iowa.
• Clinton County, Iowa.
• Cedar County, Iowa.
• Muscatine County, Iowa.
• Rock Island County, Illinois.
• Henry County, Illinois.
• Mercer County, Illinois.

Major Deere facilities within the Quad Cities include:

• Moline: John Deere Seeding Group, John Deere Moline Cylinder Works, John Deere World Headquarters, John Deere Pavilion, and IT offices.
• East Moline: John Deere Harvester Works.
• Milan: John Deere Parts Distribution Center.
• Silvis: John Deere Global Crop Harvesting Product Development Center.
• Davenport: John Deere Davenport Works.

SUPPLIER IMPACT BY THE NUMBERS

$2.7 billion of Deere’s $9.3 billion 2022 production value came from other companies which supplied it with goods and services including:

• $306 million worth of steel.
• $178 million in aftermarket ferrous and tracks.
• $109 million in fabrication, welding and assembly.
• $104 million in forgings and steel machining.
• $75 million in metal fabrication.
• $21 million in castings and machining.
• $24 million in warehousing and consolidation services.
• $5 million in plastics.
• $4 million in paint, fuels and environmental services.

DEERE-GENERATED TAX REVENUES

In 2022, direct and indirect tax revenues generated from the economic contributions from the John Deere Quad City Production Complex included:

• Local: $124.7 million.
• County: $17.5 million.
• State: $209.25 million.
• Federal: $389.6 million.
• Total: $741.05 million.

QUAD CITIES COMMUNITY CHARACTERISTICS 

• Population: 489,129. 
• Households: 206,089.
• Total employment: 284,609.
• GDP: $30.479 billion.
• Total personal income: $27 billion.
• Total Labor Income: $17.9 billion.

SOURCE: John Deere’s Economic Contributions to the Quad City Community Area study conducted by Regional Strategic Ltd.

DEERE’S IMPACT BY INDUSTRY

In 2022, John Deere contributed $3.64 billion to other industries in its Quad City Community Area. They include:

• Manufacturing: $220.7 million.
• Wholesale: $973.3 million.
• Retail: $150.3 million.
• Transport & Warehousing: $251.9 million.
• Communications: $127.5 million.
• Finance & Insurance: $263.4 million.
• Real Estate: $236.64 million.
• Professional Services: $576 million.
• Health Care: $148.6 million.
• Recreation & Hospitality: $114.9 million. 

SOURCE: DEERE & CO