John Deere Closes Canadian Plant, Opens European and South American Locations

Deere & Company announced it will close its manufacturing facility in Welland,
Ontario, Canada, and transfer production to company operations in Wisconsin
and Mexico. The Welland factory manufactures utility vehicles and attachments for the commercial and consumer equipment and agricultural equipment businesses. Deere said that by consolidating manufacturing capacity the move supports ongoing company-wide efforts aimed at improved efficiency and profitability.

Production of Gator utility vehicles made at Welland will move to Horicon, Wisconsin, where other models of the popular product as well as riding lawn equipment are built. Production of cutting and loading attachments will be transferred to Deere installations in Monterrey and Saltillo, Mexico. The Welland plant is scheduled to close by the end of 2009.

Approximately 800 employees will be affected by the closure. The company has advised the Canadian Auto Workers, which represents production workers at Welland, of the decision. If the union should request to do so, Deere will have further discussions about the transition associated with the closure and its effect on employees.

Today's action is expected to result in after-tax charges of approximately $90 million, about half of which will be recorded in the fourth quarter of 2008. This amount was not reflected in the company's earnings forecast for the quarter of $425 million issued last month.

Deere & Company also announced it plans to establish a European Technology &
Innovation Center (ETIC) in Kaiserslautern, Germany. Deere plans to have
the center operational in the spring of 2010.

The facility will accommodate up to 200 engineers to further enhance Deere's advanced engineering capabilities in Europe with a focus on developing and applying technological advances to serve customers in the region.

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"Our customers expect John Deere products and services to increase their productivity by integrating technology with machinery," said Mark Von Pentz, President, Agricultural Division -- Europe, Africa and South America. "This center allows John Deere the opportunity to provide even more focus to our industry-leading research and technology efforts."

In addition, the new center will provide engineering support for Deere's work in intelligent mobile equipment technologies and agricultural management solutions.

"The new European Technology & Innovation Center will be both an integral part and extension of our existing technology and engineering network in support of Deere's global growth strategy," says Klaus Hoehn, Vice President, Advanced Technology and Engineering. "The ETIC will allow us to develop and leverage critical technologies in order to meet the requirements of our growing customer base throughout the world."

Deere said Kaiserslautern provides an excellent environment with such activities as the highly specialized research operations at the University of Kaiserslautern, providing John Deere excellent opportunities to recruit talented employees. Deere said the ETIC location also is beneficial because it is located between the product engineering centers at John Deere factories in Mannheim and Zweibruecken.

In addition, Deere & Company announced that it will invest approximately $80 million in its agricultural manufacturing and parts distribution operations in Brazil to increase manufacturing capacity for both tractors and combines as well as
to improve service to customers.

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The company said the investments were being made in its combine and planter factory in Horizontina, its tractor factory in Montenegro, and for the development of a new parts distribution center in Campinas.

The investments will allow Deere to increase manufacturing capacity by approximately 35 percent in its Horizontina and Montenegro factories. The funds will improve manufacturing flexibility, optimize the use of assets and improve aspects of the factory layout and assembly lines. Investments will also assist suppliers to improve capacity and logistics.