Posted 10/27/2011 03:00 pm
Updated 2 years ago
Whirlpool Corp. of Benton Harbor, Mich., said Thursday that it will close its 45-year-old side-by-side refrigerator manufacturing plant there, which employs 1,000 people, by "mid-2012."
Employees who talked to Fort Smith CBS affiliate KFSM-TV, Channel 5, said layoffs at the 1.2 million-SF plant will begin in January.
In a statement, Whirlpool attributed the "difficult but necessary" move to "a decrease in demand for the side-by-side refrigerator platforms that has resulted from the continued weakness in the global economy, and the aggressive pricing actions of global competitors ..."
The company said the move will affect its 1,000 active employees, including 90 salaried and 884 hourly workers, along with 800 employees on layoff from the plant. Whirlpool said it is working with local and state officials to make sure "all available training resources are made available to affected employees."
"Obviously it's a blow, a large blow, to the economy," Kathy Deck, director of the Center for Business & Economic Research at the University of Arkansas' Walton Business College, said Thursday.
"I think Fort Smith, like many communities across the country, faces the questions of, ‘What do we do with our workforce now?'" she said.
Production Moves to Mexico, Other States
U.S. Rep. Steve Womack, R-Ark., said he was "disappointed" by the announcement. Womack represents Arkansas' 3rd District, which includes Fort Smith.
"Despite the news, I consider the Fort Smith region one of America's most attractive areas for economic development. It is ideally situated with incredible infrastructure and a quality of life second to none in the country," he said.
"With a qualified workforce and the supporting institutions, I am confident we'll find another corporate partner who believes in Fort Smith and the enormous opportunities it offers."
Whirlpool said production at the Fort Smith plant will shift to the company's other North American sites, with trash compactor production moving to Ottawa, Ohio; built-in refrigerator production moving to Amana, Iowa; and side-by-side refrigerators moving to Ramos Arizpe, Mexico.
"The employees at our Fort Smith location are among the best you will find anywhere," Al Holaday, vice president of integrated supply chain and quality, said in the company's statement.
"While Fort Smith certainly has produced top quality products consistent with our longstanding strategy, we have not been cost competitive due to the extremely low production volumes at the facility."
Gov. Mike Beebe said the company has made it clear that its decision was based "solely on economic factors" and doesn't reflect on the quality of its employees.
"Our efforts will begin immediately to replace these jobs and get these hundreds of skilled employees back to work once Whirlpool leaves," he said.
Fort Smith Mayor Sandy Sanders told The Associated Press the city will do all it can to retain its manufacturing base.
"But (Thursday's) announcement underscores the importance of developing a broader base of employment opportunities," Sanders said.
City Administrator Ray Gosack said the city will work to place Whirlpool workers locally.
"During the past several years, approximately 3,500 Whirlpool workers have been laid off, and most have found other employment in the regional economy," Gosack said.Ripple Effect
Deck said it's likely that Whirlpool's closing will have a "large ripple effect" of other companies shutting their doors.
She said there are other regional companies that directly depend on the Whirlpool plant for business, including Fortis Plastics, which announced last week that it will close next month, affecting 93 workers.
Gregory Hamilton, senior research economist at the University of Arkansas at Little Rock's Institute for Economic Advancement, said about 500 regional jobs, plus an additional 80 throughout Arkansas, depend on the Whirlpool plant.
Not A Surprise
Rumors that a closure was coming intensified at the end of the summer. In August, Whirlpool said that low demand for its products and the recession has prompted "a study of options" for the plant.
Low demand and a shift in production to a plant in Mexico had already chipped away at employment, which stood at more than 4,000 workers in 2007, making it the state's ninth largest employer that year.
Deck said the community business leaders have been preparing for the plant's closure.
"For the better part of this year, there has been talk of it, and community leaders have been discussing how to deal with it," she said. "If there's any silver lining to something like this, it's that at least the community wasn't caught flat-footed."
Whirlpool purchased what was then the Norge Refrigeration plant in Fort Smith in 1966. It remained one of the region's key employers despite hundreds of layoffs in recent years.
The plant property, at 6400 Jenny Lind Road, was appraised this year at $28 million, with the 145-acre parcel valued at $872,500, and improvements valued at $27.5 million.
Whirlpool is scheduled to release third-quarter earnings before the market opens on Friday.
(Paul Gatling and The Associated Press contributed to this report.)