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Deere plans major investment in tractor facilities

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By Jennifer DeWitt | Thursday, August 28, 2008 |

With global demand growing for its tractors and combines, Deere & Co. expects to invest nearly $180 million in its plants in Waterloo, Iowa, and in Brazil.

The company said Thursday that it will spend approximately $97 million to expand its Waterloo facilities, including the foundry, engine and drive train operations. The expansion comes on top of a $90 million investment at Waterloo announced in February.

The latest project will add 103,000 square feet to the drive train operation at Waterloo Tractor Works. In addition, part of the total investment will be spent on improvements at a Deere plant in Coffeyville, Kan., where transmissions and other drive train components are built.

Deere spokesman Ken Golden said the new expansion and the earlier project, when combined, will help Waterloo increase its capacity to build high-horsepower tractors, other tractor components and service parts by about 40 percent.

He said the earlier expansion dealt with improving tooling, technology and processes in tractor manufacturing. “This adds the drive trains, foundry and engines and adds to the overall system of building tractors. This is a real vote of confidence for the people who build high-powered tractors.”

Both projects are expected to be complete by 2010. However, Golden said it is too early to discuss how many new jobs will be added or the timeline for job creation. “As production increases, we anticipate jobs being added,” he said, adding that Waterloo already is in a hiring mode with retirements and increased production.

Deere said tractors built in Waterloo are exported to more than 130 countries, including the key North American market.

Along with the Waterloo expansion, the Moline-based Deere said it will invest an estimated $80 million in its agricultural manufacturing and parts distribution operations in Brazil. The investment is aimed at increasing Deere’s manufacturing capacity of tractors and combines.

The project will expand its combine and planter factory in Horizontina, its tractor factory in Montenegro and includes construction of a new parts distribution center in Campinas.

The projects, which are expected to be complete in 2009, will increase manufacturing capacity by about 35 percent in South America. Deere said the project will improve manufacturing flexibility, optimize the use of assets and improve the factory layout and assembly lines. It also will help suppliers improve capacity and logistics.

The latest expansion plans come just two weeks after Deere announced that it will add 300,000 square feet to its Milan (Ill.) Parts Distribution Center. Deere also will renovate three emergency parts depots in the western United States and Canada into regional distribution centers. The total investment was not disclosed.

Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com.