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JD tractor cost. What % is wages?

A

Anonymous-0

Well-known Member
Any guesses? 40, 50, or 75% ????

None of the above is the correct answer. And this answer is not probably a totaly clear picture, or should I say fair picture.

The reason I say not a fair picture is because when JD purchases parts, such as seats, starters etc., their is indeed a certian amount of labor involved that this picture does not reflect.

I know a lady who worked in JD in the mid 90's and she could loose her job for leaking information so no details will be exposed.

I can't trust my memory either 100%, but I'm reasonably sure it was approx 12-13%. She claimed research and development was a very big chunk of the pie. And for all who wonder???? She was not a on the clock wage earner.

And you probably ask if her type of ---LABOR---was included in that number???? Sorry, I never thought to ask at the time. She and I no longer comunicate as she married and moved away. As I understand her husband is not the trusting type, and rather she not comunicate with her past friends. By the way, as far as looks goes...She was hotter than ANY hands down...YES... ANY JOHN DEERE TRACTOR!!!OH YEA...She should have been a keeper.
 

I know in the automotive world, GM has been under 10% for labor for years. That doesn't account for the white collar overhead.
 
It is not a defensive point for the UAW / bail out ordeal. But myself like most others in our area (we used to have alot of Deere workers) probably assumed it was closer to 75% labor costs. JD workers had the best of the best, and if you could once get your foot in the door, you had it made big time.

So therefore we all assumed a very high % of a tractors cost was wages. No other point,

North East IA
 
B&D just reported not long ago that a plant was shut down in Canada. Probably to influence profit from a lack of labor, so yes, a big portion of that tractor is labor cost.
 
I have never been in a tractor plant, but in auto plants the cost of purchased parts is the major item. 20 years ago, a engine plant used 1400 employees to produce 1600/day. New plants use 700 workers to do 3000/day or more.
 
You forget that EVERY PRODUCTS cost is 100 per cent labor. From the time the raw material is dug from the ground, labor, to the salesman that sells it, labor. ANY product did not just spring into existence.

Kent
 
All this due to new technology and the over paid and under worked skilled tradesmen who design, build, and maintain the equipment that makes it possible. Right? rw
 
They consider it the cost the can manage. The other costs, purchased parts, energy, money ( for financing ) they have little control on. Plus they gotta have somebody to blame.....
 
Not quite true.

If I'm receiving royalties for coal or oil being mined from my property, that's not in exchange for labor.

Similiarly when the coal company pays interest on an operating loan they use to pay for extracting that coal, that interest isn't in exchange for labor -- it's in exchange for someone loaning them capital.

That said, 12-15% is probably reasonable for Mother Deere for primarily assembling the tractors. I'm sure there's a significant amount of labor upstream of them at their suppliers, the steel plants, the crew of the super tanker carrying the oil that makes the petrochemicals that go into the tires that go on the tractor, etc. A good portion of their capital expenses also were in labor costs building the buildings and millwrighting the machine tools and assembly lines.
 
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