PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 16:36 UK, 25th Mar 2010, by Agrimoney.com
Deere takes $150m hit from healthcare reforms

Deere & Co has become the second US company to warn of a loss to President Barack Obama's controversial US healthcare reforms, saying that the legislation will cost it $150m in earnings.

The maker of John Deere tractors said the hit would be taken primarily in the February-to-April quarter, for which analyst had been expected the group to report earnings of about $450m.

The warning follows Wednesday's statement by Caterpillar, a rival in the market for construction machinery, that the reforms would prompt it to take a $100m charge to account for the expenses it would no longer be able to put against tax.

Deere decline to detail the rationale behind its warning, which continued the controversy over President Obama's landmark legislation, which introduces measures such as a penalty on larger employers who failed to provide healthcare benefits to employees.

'Premature and irresponsible'

However, Gary Locke, the US Commerce Secretary, condemned as "premature and irresponsible" the Caterpillar and Deere statements, saying that some the details of the package were still being ironed out.

"A lot of the regulations on how this will affect big business haven't even published yet," Mr Locke told television channel CNBC.

One particularly controversial measure has been the removal of tax deductibility on payments companies make to provide employees with prescription drugs.

Deere shares stood 1.6% higher at $61.44 in morning trade in New York.

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