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Deere (NYSE:DE) is investing $29.8 million to begin making harvesters in the United States instead of China. The agricultural machinery giant is expanding its factory in Thibodaux, Louisiana, and adding 70 jobs, the state’s development agency announced.
“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 Gov. John Bel Edwards said this week in prepared remarks.
Deere will produce medium-chassis cotton harvesters to replace models currently built in China. The new jobs pay an average salary of $47,472 a year, and add to Deere’s existing work force of 311 employees in the state.
"Our employees at our Thibodaux factory have demonstrated remarkable resiliency and commitment to our customers," a Deere spokesperson said in an email that described how workers restored operations after Hurricane Ida plowed through Louisiana last year. "This investment is not only an investment in the community and our facilities, but also an investment in the incredible team who works there."
Louisiana offered Deere incentives that include a performance-based retention and modernization grant of as much as $1 million and support for recruiting and training workers, according to Louisiana Economic Development.
Deere's Thibodaux site currently serves as a design center for sugar harvesting and earth-moving equipment. It also makes a variety of agriculture and construction machinery. Deere plans to start making the new cotton harvesters within the next two years and to reach full capacity by 2025.
The company's stock has risen 2% this year, contrasting with a 26% decline for the S&P 500 Stock Index (SP500). Deere's net income rose 13% from a year earlier to $1.88 billion in fiscal Q3 as revenue climbed 22% to $14.1 billion.
Seeking Alpha columnist Leo Nelissen rates Deere (DE) as a Buy on its long-term outlook for growth. Contributor Beersheba Research has a Buy rating on Deere (DE) because of the company's technological advancements.