John Deere scales back U.S. manufacturing, shifts some production to Mexico

Moline, IL — Agricultural machinery giant John Deere is moving forward with plans to shift some of its U.S. production to Mexico, reaffirming its global operations strategy amid economic pressures and evolving market demands. The company has confirmed that production of mid-frame skid steer loaders and compact track loaders will be relocated from its Dubuque Works facility in Iowa to a new plant in Ramos Arizpe, Mexico, expected to be operational in 2026.

This move is part of a broader initiative to optimize manufacturing efficiency, address rising operational costs, and better position the company for future growth. John Deere cited increasing material costs, labor shortages, and declining market demand as key factors influencing the decision.

Despite the relocation, John Deere emphasized its continued commitment to U.S. manufacturing. The company plans to invest $20 billion over the next decade to modernize and expand its American operations, which include more than 60 facilities across 16 states. These investments will focus on automation, advanced manufacturing technologies, and workforce development.

“This is not about leaving the U.S.,” a company spokesperson reiterated. “It’s about building a more resilient and efficient global supply chain while continuing to invest in our American workforce and facilities.”

The announcement has raised concerns among labor unions and local communities, particularly in Iowa and Illinois, where John Deere has long been a major employer. Union leaders have called for transparency and support for affected workers, as the company has already announced layoffs impacting hundreds of employees in Iowa this year.

The new $55 million facility in Mexico will produce equipment previously manufactured in the U.S., including mid-sized tractors and loaders. John Deere says the move will enhance its ability to serve global markets and improve delivery times, while freeing up U.S. facilities to focus on other high-demand products.