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Iowa saved nearly 300 John Deere jobs in Waterloo last week when it granted state tax credits for a massive company reinvestment in its Waterloo Foundry, according to documents Deere filed with the Iowa Department of Economic Development.
Deere will get $15 million in tax credits—$9 million investment tax credit and a $6 million Doubled Research Activities Credit—and indirect financing from the state of Iowa, as it invests $90 million in modernizing its Waterloo Works Foundry over the next four years. A company press release issued last week placed the investment at $100 million.
In the process, 60 salaried positions and 235 hourly positions in Waterloo were retained. Jobs performed by those employees would have been outsourced, had an agreement not been reached, according to the documents.
Deere also noted in its application for tax credits with IDED that the Waterloo Works Foundry buys more than $82 million in material, supplies and services from Iowa suppliers.
“If the Foundry’s operations were outsourced, most, if not all, of these materials, supplies and services would not be purchased in Iowa,” the company wrote in its application.
The project’s time line is as follows: A new mold line and core processes is scheduled for completion in 2012; new blast and auto grinding processes, completed in 2013; and infrastructure and office renovation, completed in 2014.
According to the documents, the company was not considering moving its foundry operations outside of Iowa if it did not secure the tax credits.
“The objective of the project is to decide whether John Deere should manufacture the casting internally in Waterloo or outsource the production to third-party suppliers,” the company said. “If the casting business is outsourced, the vast majority of casting volume will go to suppliers outside the U.S.”