Iowa Town Hit Hard by Whirlpool Job Cuts
Whirlpool today announced the elimination of 4,500 jobs at several manufacturing sites around the country and also in Mexico and Canada. The company has about 80,000 workers in all. Last March, Whirlpool bought its smaller rival, Maytag, for $1.7 billion. In business terms, that's what's called consolidation. In people terms, it means that in a town called Newton, Iowa, 1,000 people are losing their jobs at a washer and dryer making plant.
Many of the cuts will come from the closing of plants in Newton, Iowa. Robert talks with Pete Slings, who has worked at Maytag for 20 years and owns a town sports bar.
That must be a real kick in the gut. You have a good job with a good employer; somebody buys them out; and, all of a sudden, they close your plant and move your job to Mexico. That's real "job creation" there! How about another round of tax cuts so we can see a few thousand more jobs disappear?
Arkansas town braces as Whirlpool shuts big plant
(Reuters) - Eleanor Roller says she and her husband Bob opened their 24-hour diner 'Bob and Ellie's' ten years ago a stone's throw from the big Whirlpool plant because a good piece of property was for sale.
But the closeness to thousands of round-the-clock manufacturing workers at Whirlpool certainly didn't hurt.
"Whirlpool used to have two and three shifts," Roller said in an interview. "But then they only had one, with no lunch break. So we felt that."
They felt it even more last week. Whirlpool, the world's largest manufacturer of household appliances, said that it would close its Fort Smith plant by mid-2012.
The plant, the biggest in the city of 86,200, employed 4,600 people as recently as 2004. But Whirlpool has down-sized steadily since then, with the final shuttering to eliminate 90 salaried and 884 hourly employees.
"Given the weakening global economic environment, we are today announcing aggressive plans that will result in substantial cost and capacity reductions," Whirlpool's chief executive Jeff Fettig said in a statement on Friday.
The job cuts are among 5,000 positions -- one in 10 in North America and Europe -- cut by Whirlpool, which employs 71,000 people around the world.
Whirlpool said the plant's remaining production, mainly side-by-side refrigerators, would be taken over by a plant in Ramos Arizpe, Mexico. But Gosack said consumer demand for those refrigerators was weak and he expected them to be phased out completely before long.
Such commercial logic was harder to cope with for people like Roller, who is near retirement age and says thinking of a new career won't help. Rising food costs, the bad economy and the Whirlpool news have just made her weary, she said.
"It's my regulars I depend on and hopefully they'll keep coming," she said. "The last three years have been the worst. I can't raise the menu prices because people can't afford to eat out now.
As Whirlpool downsized in recent years, the city also wooed several non-manufacturing businesses. Sykes Enterprises recently opened a call center that employees 500 people. Golden Living, a healthcare company, plans to add 200 jobs. Mitsubishi Power Systems will bring another 300.
But Fort Smith, once considered the state's manufacturing capital, has lost 33 percent of its manufacturing jobs in the last 10 years, Gosack said.
One study estimated an annual loss of $57 million in wages for the 974 Whirlpool workers and about 500 other local workers like plastic makers connected to the Whirlpool plant, according to Gregory Hamilton, an economist at the University of Arkansas at Little Rock.
(That's the "ripple effect" that has consequences beyond the plant itself.)
The tax base and the services it supports, especially school districts, will also be squeezed. In 2010, the company paid $1.1 million in local property taxes, Gosack said.
