Summary
Deere & Company (DE) filed an 8-K on June 17, 2002, reporting significant operational changes within its Commercial & Consumer Equipment Division. The company announced plans to consolidate production capacity, which will involve closing facilities in Williamsburg, Virginia, and Jeffersonville, Indiana, while streamlining operations in Horicon, Wisconsin. These actions are expected to incur pretax charges of $50 million over the third and fourth quarters of 2002, but are projected to improve the division's annualized pretax operating performance by approximately $25 million starting in the following year. This restructuring is designed to improve asset utilization and lower costs. In parallel, Deere & Company also announced a strategic agreement with The Home Depot to sell a new series of John Deere-branded lawn tractors through The Home Depot's retail stores, marking the brand's entry into the mass retail channel. This new line, the 100-series, will also be available through John Deere dealers, who will provide service and support for all units sold through both channels. This agreement is expected to increase overall lawn tractor sales and production, with the new models manufactured at the Greeneville, Tennessee facility.
Key Highlights
- 1Deere & Company to close production facilities in Williamsburg, VA, and Jeffersonville, IN, impacting the Commercial & Consumer Equipment Division.
- 2Streamlining of operations at the Horicon, WI facility is also part of the production consolidation effort.
- 3The company anticipates pretax charges of $50 million related to these consolidation efforts in Q3 and Q4 2002.
- 4Projected annualized pretax operating performance improvement of approximately $25 million starting in fiscal year 2003 due to these actions.
- 5Announcement of a new agreement with The Home Depot to sell a new series of John Deere lawn tractors in mass retail channels.
- 6The new 100-series lawn tractors will be sold at both The Home Depot and John Deere dealers, with dealers providing service and support.
- 7Production of the new 100-series lawn tractors will be at the Greeneville, Tennessee facility.