Whirlpool to lay off 360 come November
Posted on Tuesday, September 18, 2007
Whirlpool Corp. will cut 360 Fort Smith manufacturing positions Nov. 2 as the start of a previously announced layoff plan targeting 700 jobs at the Jenny Lind Road plant by mid-2008.
In October, the world’s largest appliance manufacturer said production of 22-cubic-foot refrigerators would be sent to a new facility in Ramos Arizpe, Mexico. About 730 Fort Smith jobs have been lost to that plant, which started making side-byside refrigerators in May 2006.
The plant employs about 2, 900 people. Company officials said about 2, 600 workers will remain in Fort Smith after the transfer of the refrigerator product line has been completed, down from 4, 600 workers as recently as 2005.
As global producers seek out efficiencies in other parts of the world, states such as Arkansas continue to take a hit on higherpaying manufacturing jobs.
At the end of December, manufacturing represented 195, 700 jobs in the state, according to the Arkansas Policy Foundation and Bureau of Labor Statistics. Arkansas manufacturing jobs peaked in 1995 when 247, 400 were employed in the sector.
In August, manufacturing jobs across the nation were down by 46, 000 compared with the same period last year, the bureau reported earlier this month. Manufacturing jobs are down 215, 000 for the year, according to the report.
The “voluntary” layoffs will be effective this fall, Monica Teague, a spokesman for the Benton Harbor, Mich.-based company, said in an e-mailed statement.
The work force at Whirlpool’s Fort Smith site has avoided permanent layoffs since 1994 when a voluntary layoff agreement became part of the labor contract.
Voluntary layoffs allow more senior employees to take time off without forfeiting accumulated seniority upon recall. If not enough workers volunteer for the layoff, then people are laid off on the basis of the lowest ranking in seniority.
Randall Wright, a labor education specialist at Little Rock’s Institute for Economic Advancement, said that having a voluntary layoff agreement in place becomes critical as manufacturing jobs head out of the country and are not replaced.
“In the old classic layoff and recall [scenario ], a layoff kicked in with a slowdown in demand,” he said. “From what I understand, that’s not what’s being considered here.”
An involuntary, or mandatory, layoff puts the least senior workers out of work with no guarantee of returning and resuming seniority.
Employees of Arkansas companies were hit hard by several layoffs and closings over the past year.
Most recently, Little Rockbased Acxiom Corp. said this month that it would lay off 266 people, including 138 in Arkansas, before its $ 3 billion buyout is finalized in an unscheduled shareholder vote.
In July, two factories that service Sanyo Manufacturing Corp. said nearly 400 people would lose jobs. The Forrest City TVmanufacturing facility will close in October. Wheatland Tube Co. is set to close by the end of this month.
In January, Nuvell Financial Services in Little Rock announced nearly 1, 000 workers would be laid off over the next two years. The company services General Motors Acceptance Corp. loans.
Workers at Fort Smith’s 1. 2 million-square-foot Whirlpool plant make trash compactors, ice makers and three different sizes of side-by-side refrigerators. Whirlpool makes and markets major home appliances under the Whirlpool, Maytag, Kitchenaid, Jenn-Air, Amana, Brastemp and Bauknecht brands.
Whirlpool completed its $ 1. 7 billion acquisition of Newtown, Iowa-based Maytag Corp. in March.
Sweden-based appliance manufacturer AB Electrolux, maker of the Frigidaire brand, closed its Greenville, Mich., plant in 2005 to move the operation to Juarez, Mexico. Greenville lost 2, 700 jobs, The Associated Press reported.
Fairfield, Conn.-based General Electric Co. moved a refrigerator plant to Celaya, Mexico in 2004, costing a Bloomington, Ind., plant 525 jobs.
The timing of the Whirlpool layoff coincides with a national economic slowdown affected in part by a slumping housing market, higher gasoline prices and reduced consumer confidence.
On Friday, reports from the U. S. Commerce Department and the Federal Reserve on retail sales and industrial output had analysts concerned that consumers would slow spending. Consumer spending accounts for two-thirds of total economic activity, The Associated Press reported.
Consumer confidence fell to 71. 1 in early September, according to the RBC Cash Index, the lowest since May 2006.
The current economic situation provides a social justification for starting the planned layoff, Wright said, “but I wonder about the odds that workers will be hired back in totality.”
Whirlpool declined to comment on whether the workers would all return.
Union officials remain hopeful that production levels will be increased with the addition of a new product line.
“I’m optimistic that they’re going to get some more product in there and that employees will be recalled,” said Clyde Dailey, a spokesman for the United Steelworkers Union, which represents the Fort Smith workers through Local 370.
Dailey said the union settled a labor agreement with Whirlpool six months in advance of its expiration date in hope of attracting management’s interest.
Union officials said news about a replacement product line might come as early as the first of the year.
Unemployment figures show Fort Smith to be leading the rest of the state and nation.
July’s unemployment rate of 8. 1 percent for the Fort Smith Metropolitan Statistical Area was nearly double the national rate of 4. 6 percent for the same time frame. Arkansas’ unemployment rate equaled 5. 5 percent in July — the most recent figure available.
Whirlpool shares rose 8 cents, or 0. 09 percent, to $ 91. 28 per share Monday on the New York Stock Exchange. Its stock has traded as high as $ 118 per share and as low as $ 72. 10 per share over the last year. Information for this article was contributed by Stacey Roberts of the Arkansas Democrat-Gazette.
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