Summary
Deere & Company announced a significant restructuring of its global operations, effective May 1, 2009. The company is consolidating its Agricultural Division and Commercial & Consumer Equipment Division into a single Worldwide Agriculture and Turf Division. This strategic move aims to leverage combined strengths, improve efficiency, and develop a more comprehensive product portfolio to better serve global customer needs while reducing overall costs. Key objectives of this new operating model include enhanced competitiveness, profitable growth across diverse geographic markets, and improved operational performance throughout economic cycles. The restructuring involves a new leadership structure with two presidents overseeing distinct product platforms and sales/marketing regions. While this initiative is expected to generate pre-tax charges of approximately $25 million in the fourth quarter of fiscal 2009 and result in about 200 salaried position reductions, management views it as a bold step to strengthen Deere's competitive position during the current economic disruption.
Key Highlights
- 1Deere & Company is merging its Agricultural Division and Commercial & Consumer Equipment Division into a new Worldwide Agriculture and Turf Division, effective May 1, 2009.
- 2The primary goal of this consolidation is to enhance efficiency, reduce costs, and create a more complete product portfolio to meet global customer demands.
- 3The new division will operate under a global model utilizing five product platforms for worldwide development, manufacturing, and delivery.
- 4The company is implementing a new leadership structure with two presidents, David C. Everitt and Markwart von Pentz, each responsible for specific product platforms and sales/marketing regions.
- 5The restructuring is expected to incur pre-tax charges of approximately $25 million in Q4 2009, which were not included in the prior 2009 earnings forecast.
- 6Approximately 200 salaried positions will be reduced through voluntary separations by September 30, 2009.
- 7This organizational change specifically excludes the Construction & Forestry Division and John Deere Credit.