Deere has not publicly commented on changes to its second contract offer, which was rejected earlier this month, but the United Auto Workers (UAW) union, which represents the striking workers, said on Friday the company had made a “last, best and final offer” that included “modest modifications,” without elaborating.

Workers at facilities in Illinois, Iowa and Kansas have been on strike since the middle of October after having turned down Deere’s attempts to tie them down to a new deal, prompting the company to say “all options are on the table.”

The workers are demanding better pay from Deere, which has forecast a record net income of $5.7 billion to $5.9 billion this year, to claw back concessions they made on some benefits in the past (all figures US$).

The striking workers are getting a good amount of community support, which further reinforces their push, UBS analyst Steven Fisher, citing a professor of labour relations, wrote in a research note.

Deere has so far refused to comment on the impact of the strike on production, but Bernstein analyst Chad Dillard estimates the company will forecast fiscal 2022 net income below Wall Street expectations, in part due to the strike impact, when it reports results next Wednesday.

The strike at the Illinois-based company comes at a time when farmers are struggling to find parts for tractors and combines during the U.S. corn and soybean harvest season.

— Reporting for Reuters by Abhijith Ganapavaram in Bangalore.

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Workers at the Illinois-based company continued their three-week-old strike a day after they voted to reject a second contract between Deere and the UAW union that bumped up wages and bonuses.

“We’re focused on getting our employees back to work through an agreement, and as such we’re not ready to discuss detailed next steps, but all options are on the table,” Deere said in a statement, but did not mention whether it will replace workers to restart operations.

Deere and the UAW union will continue to have talks, a Deere spokesperson told Reuters on Wednesday.

UAW had said the strike will continue after 55 percent of the workers voted down the agreement.

Workers at 12 facilities in Illinois, Iowa and Kansas rejected the second tentative agreement, prolonging the first strike by the UAW union since 1986, which had lasted for 163 days.

The union said on Wednesday it was too early to comment on its next steps.

Deere would have invested an additional $3.5 billion in its employees through agreements reached with UAW, Deere Chief Administrative Officer Marc Howze said. It has forecast net income between $5.7 billion and $5.9 billion this year.

The world’s largest farm equipment maker added it will execute the next phase of its “Customer Service Continuation Plan”. It did not immediately elaborate on the details.

Deere has already implemented “cross-training” — or training salaried employees in production — to mitigate the loss of output due to the strike, a person familiar with the matter said.

But brokerage Barclays, using geolocation data, noted Deere’s Construction and Forestry facilities witnessed the biggest drawdown in activity during the strike.

The latest contract would have provided a 10 percent rise in wages this year, 5 percent in 2023 and 2025, as well as lumpsum bonuses amounting to 3 percent of their pay for 2022, 2024 and 2026, according to UAW.

This was an improvement to last month’s contract offer, which was rejected overwhelmingly by the workers, who then went on strike.

– Additional reporting by Radhika Anilkumar, Kannaki Deka, Aakriti Bhalla and Aishwarya Nair

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The decision was a blow to the deal that would create the first direct railway linking Canada, the U.S. and Mexico.

The voting trust would temporarily own Kansas City Southern without CN exerting control. It would have allowed KCS shareholders to receive and keep the $325 per share in cash and stock CN was offering, even if the combination was subsequently rejected by the regulator, the U.S. Surface Transportation Board (all figures US$ except where noted).

The STB said it left the door open for the companies to seek full review of their proposed merger. Regulatory experts said the process would be uncertain and could last more than a year. The companies did not immediately respond to requests for comment on their next steps.

KCS has an alternative suitor, Canadian Pacific Railway (CP), whose $25 billion deal to buy the company in March was later trumped later by CN.

Canadian Pacific’s proposed voting trust was approved in May, and this month the company presented a new $27 billion cash-and-stock bid for Kansas City Southern, confident the STB would reject CN’s voting trust.

CP did not immediately respond to a request for comment, but CP CEO Keith Creel said in a release that the company’s Aug. 10 offer to KCS “still stands.”

The STB’s ruling, Creel said, “clearly shows that the CN-KCS merger proposal is illusory and not achievable” and “knowing this, we believe (CP’s offer) recognizes the premium value of KCS while providing regulatory certainty (and) ought to be deemed a superior proposal.”

KCS shares closed on Tuesday down 4.39 per cent at $280.67. CN shares closed up 7.36 per cent at $148.40, indicating relief from shareholders that the acquisition now looks unlikely. CP shares dropped 4.55 per cent to C$86.69, highlighting trepidation among its shareholders over paying up for a deal with KCS.

After the STB decision, a CN shareholder, hedge fund TCI Management, sent a letter to the company’s board urging it to cancel its deal with KCS and replace CEO Jean-Jacques Ruest with Jim Vena, a veteran of both CN and Union Pacific. Vena could not be immediately reached for comment.

“The board must take responsibility for the company’s recent underperformance and failure,” TCI said in the letter. The fund, run by hedge fund veteran Chris Hohn, has a 5.2 per cent stake in CN and is also CP’s largest shareholder.

The STB said that even though the overlap of CN’s and KCS’s networks was confined to about 113 km between Baton Rouge and New Orleans, the two railways operated parallel lines in the central portion of the U.S. and could be under less pressure to compete if the voting trust was approved.

“The board finds that applicants have not demonstrated that their use of a voting trust would be consistent with the public interest,” the STB said in a statement.

U.S. President Joe Biden has issued sweeping executive orders aimed at promoting competition in the U.S. economy. One order encouraged the STB to consider Amtrak’s statutory rights when assessing whether a rail merger is in the public interest.

Passenger railroad Amtrak, majority owned by the U.S. government, had opposed CN’s voting trust, saying its pledge to divest the Baton Rouge to New Orleans line will harm future passenger service in Louisiana.

— Reporting for Reuters by Shreyasee Raj and Abhijith Ganapavaram in Bangalore and Greg Roumeliotis in New York. Includes files from Glacier FarmMedia Network staff.

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