CNH Industrial has followed through on plans to lay off 200 workers at its Racine, Wisconsin plant, with plans to move those jobs to Mexico, according to U.S. Sen. Tammy Baldwin (D-WI), as part of a broader company-wide reorganization intended to reduce operating costs by $150 million.
The burden of those cost savings, according to Baldwin, is falling almost entirely on 660 unionized workers, with additional cuts possible, reducing the Racine workforce to as low as 150 workers.
In a scathing letter to Scott Wine, CEO of CNH Industrial, Baldwin urged CNH to "reverse course," noting the company posted record profits in 2023.
“Agricultural machinery has been made in Racine by your workers for over 175 years — they have made Case-New Holland into the international manufacturing powerhouse it is today,” Baldwin wrote.
“Moving production to Mexico as you are considering would not only be a slap in the face to the workers who have given so much, it would destroy the institutional knowledge that your workforce has developed over decades of building agricultural equipment.”
The CNH Racine facility produces Case IH and New Holland large two-wheel drive and front wheel assist agricultural tractors between 180 horsepower and 380 horsepower.
The Racine facility also assembles drive line components for several North American CNH Industrial facilities that are used in combines, large four-wheel drive agricultural equipment, and cotton picker equipment, according to the UAW 180 website.
Racine built hydraulic valves are shipped worldwide for use on agricultural and construction equipment built under the CNH Industrial brand name.
The announced layoffs come after more than 1,000 CNH Industrial workers in Racine and Burlington, Iowa, went on strike for a better contract for more than 260 days, starting in 2022.
CNH and its workers reached an agreement in January 2023, with a new contract that included wage increases, shift premium increases, classification upgrades, and other improvements, according to the UAW.
“Given the fact that layoffs came so shortly after the company signed a new collective bargaining agreement, it raises concerns that these layoffs were made as retribution,” Baldwin said. “I suspect that the majority of the burden of the $150 million in cost reduction you have planned will fall almost entirely on the shoulders of your unionized workforce in the United States, particularly in Wisconsin.”
While CNH did not respond to request for additional details, the company had announced a restructuring plan last November that included trimming 5 percent of its salaried workforce costs and reducing its total workforce expenses by 10 to 15 percent, citing a slow-down in farm equipment sales in South America, according to Reuters.
But according to Baldwin, despite claims by CNH of the need to save money, the company earned record profits last year, compensated its executives handsomely, and spent $652 million on stock buybacks last year — four times more than the $150 million the company hopes to save by reducing its workforce.
“Despite delivering record profits for your company, your workers in Racine are being told their services are too expensive and are no longer welcome. An average worker at your Racine plant earns $52,000 annually,” Baldwin wrote to CNH’s Wine.
“Last year, you made nearly 350 times that, $18 million. In 2022, you made $22 million and in 2021 you made $44 million. During those three years, you have earned more money than you paid to all of the workers in Racine — the ones you have now told are too expensive to invest in — combined.”
Baldwin also noted that CNH was recently “awarded four contracts by the Defense Logistics Agency at the Department of Defense worth a total of $1 million — a sizable investment in CNH by American taxpayers.”
Baldwin, who serves on the U.S. Senate Appropriations Committee and Defense Appropriations Subcommittee, wrote, “It is always my expectation that when we spend taxpayer dollars, we should be investing those dollars in American workers.
“Abandon plans to move production to Mexico and make clear to the workers in Wisconsin that you are committed to manufacturing the best agricultural equipment in the world in the city where it all started—Racine, Wisconsin,” Baldwin concluded.
A full version of this letter is available here.