Deere to Shift Production from China to U.S.

According to a recent report from SeekingAlpha, Deere is expanding its factory in Thibodaux, Louisiana, and adding 70 jobs.

“This investment by Deere & Company demonstrates not only the strength of Louisiana’s manufacturing sector, but the resilience and recovery of the Bayou Region,” Louisiana Governor John Bel Edwards said in prepared remarks.

The report stated Deere would produce "medium-chassis cotton harvesters to replace models currently built in China." Deere plans to begin building the harvesters in the Thibodaux facility within the next 2 years and have full capacity production by 2025. The Thibodaux facility is currently a design center for sugar harvesting and earth-moving equipment and produces some ag and construction equipment.

The decision to move cotton harvesting equipment isn't Deere's only recent move in the Chinese market. According to SEC filings, Deere had also closed a factory in China in 2020 that produced small ag equipment, then sold the factory for a $27 million pretax gain in 2021.

EDITOR’S TAKE:

Given recent tensions between the U.S. and China, this is not a shocking development. It is our belief that we can expect to see even more moves similar to this from Deere and other companies as we move forward. It wasn’t that long ago that many companies invested heavily to manufacture products in China. However, the reality of intense government intervention, unreliable quality and difficult oversight by management based in the U.S. has also contributed to such pull-back decisions. Also, the continuing theft of intellectual property has cost U.S. manufacturers billions over the years. Moves such as this will eventually mean a more reliable supply of equipment in the U.S. It is a strategic move and hopefully replicated in other industries that are critical to the health and welfare here at home.