UAW and Deere are set to clash amid AI sales boom

The UAW and Deere are barreling toward a contract clash as Big Labor seeks to capture some of the immense wealth being created by the AI boom.

Why it matters: Old-school equipment makers like Deere and Caterpillar suddenly find themselves swept up in a sales-and-stock boom tied to AI, as data center developers gobble up bulldozers, excavators and other construction machines.

The big picture: Union leaders have already been agitating against the AI giants, calling for labor protections and bashing billionaires for seeking to replace workers.

• "You're either with workers or you're with millionaires," AFL-CIO president Liz Shuler told Axios in June. "There's just been a dearth of leadership in terms of elected officials really prioritizing this and putting workers at the center."

The latest: The UAW announced late Sunday that its members had rejected a Deere contract offer, which would've extended its current collective bargaining agreement for two years, through 2029.

• The extension would've included a 4% annual wage increase and $3,000 bonuses each year, plus no changes to pensions and health care.
• UAW president Shawn Fain blasted Deere for laying off workers and signaled the union wants a more lucrative deal now that the company's fortunes have improved.
• "Our members rejected Deere's offer to extend their contract because they know their worth and what they deserve," Fain said in a statement. "The company failed to make an offer that addressed the issues weighing on the minds of our members, especially job security. We'll see Deere at the table in 2027."

The other side: Deere said that it's "disappointed" by the vote and that it expects to return to negotiations before its contract expires in October 2027.

• "We proposed the extension because we believe added stability and certainty would benefit our employees, customers and business in a challenging environment," Deere said in a statement.

Zoom in: Deere's stock price has soared 40% in 2026 as the company finds itself at the center of the AI trade.

• The company reported last week that sales jumped 18% in its construction and forestry segment from a year earlier to $3.62 billion.
• Operating profit in the segment also soared 84%, while operating margin spiked to 12.1% from 7.7%.
• Deere said in its statement Monday that overall "demand remains well below 2021 levels" and that "competition continues to intensify," while "the outlook for a significant recovery remains uncertain."

The intrigue: Fain — who is running for reelection as president of the UAW this year — has reportedly been discussed as a possible dark-horse candidate for president of the United States in recent months.

• He rose to prominence in the labor movement in 2023 when he led an unprecedented strike against General Motors, Ford and Stellantis that culminated in record pay increases.
• At Deere, "I think they're going to learn that he bargains hard and he has a lot of people behind him," Arthur Wheaton, director of Labor Studies at the Cornell ILR Buffalo Co-Lab, tells Axios. "And it's an election year — the last thing he wants is a soft contract."

💭 Our thought bubble: Big Labor is scrambling to present a counterforce to the powerful AI giants — and since none of the Big Tech companies are broadly unionized, the labor movement's most realistic chance might come in the equipment production sector.

What to watch: Any halt to the availability of equipment could present a serious bottleneck to AI data center construction — especially considering that Deere and Caterpillar are already experiencing order backlogs.