{"id":375352,"date":"2010-03-01T10:05:02","date_gmt":"2010-03-01T15:05:02","guid":{"rendered":"tag:www.southernstudies.org,2010:\/\/5.12161"},"modified":"2010-03-03T08:56:16","modified_gmt":"2010-03-03T13:56:16","slug":"sucked-into-the-offshoring-whirlpool","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/375352","title":{"rendered":"Sucked into the offshoring Whirlpool"},"content":{"rendered":"

By Phil Mattera, Dirt Diggers Digest<\/a><\/i><\/p>\n

Critics of the $787 billion Recovery Act complain it is not doing
\nenough to revive the economy, but they rarely ask why the companies
\nthat are receiving stimulus contracts and grants are not hiring more
\npeople. Now one of those recipients is facing a growing controversy
\nover its employment practices in a case that helps explain why jobs
\nremain in short supply.<\/p>\n

Appliance maker Whirlpool is under fire<\/a>
\nfrom organized labor for its decision to shut down a 1,100-worker
\nrefrigerator plant in Evansville, Indiana and shift the work to a
\ncompany factory in Mexico. The announcement<\/a>
\nwas actually made last August, but it did not get national attention
\nuntil recently, when union activists realized that Whirlpool had been given<\/a> a $19.3 million grant<\/a>
\nby the U.S. Department of Energy to develop “smart appliances.” The
\nfunding was part of the Recovery Act’s $4.5 billion pot of money to
\nencourage the development of the smart transmission grid.<\/p>\n

The grant was not directed to the Evansville plant, but unions are
\nnonetheless indignant that a company engaged in exporting jobs to a
\nforeign low-wage location is receiving federal aid. The company made
\nthings worse for itself by warning<\/a>
\nworkers not to participate in a planned protest demonstration featuring
\nAFL-CIO President Richard Trumka. The union at the plant, IUE-CWA Local
\n808, has filed an unfair labor practice charge<\/a> over the warning.<\/p>\n

This situation shows the difficulty of using stimulus funds or other
\nincentives to generate employment at a time when so many large
\ncorporations no longer have an interest in producing things in the
\nUnited States.<\/p>\n

Consider Whirlpool. For decades its production activities were
\nalmost entirely located in the USA. In the 1980s that began to change
\nas the company started to focus more on overseas markets. It bought
\nlarge shares in the Canadian company Inglis, Mexico’s Vitromatic and
\nthen the European appliance business of the Dutch company Philips. In
\n1990 Forbes<\/em><\/i> wrote that Whirlpool was “going global — with a vengeance.”<\/p>\n

If Whirlpool’s foreign expansion was meant only to meet demand in
\nforeign markets, that would be one thing. But the company began a
\nprocess of reducing its manufacturing in the United States and other
\ndeveloped countries while increasing it in foreign low-wage havens. One
\nof its favorite havens was Mexico. In the late 1980s the company closed
\nnumerous U.S. plants and shifted production to Mexican maquiladora
\nplants. In 1996 the plant in Evansville lost about 265 jobs when some
\nrefrigerator production was moved to Mexico. In 2003 Whirlpool shifted
\nsome production from its facility in Fort Smith, Arkansas to a new
\nplant south of the border.<\/p>\n

The latter move came a decade after a bitter dispute between the
\ncompany and the workers in Fort Smith represented by the Allied
\nIndustrial Workers union. In 1989 Whirlpool unilaterally imposed
\nconcessions on members of AIW’s Local 370, prompting the union to
\nlaunch a national boycott of the company. In 1991 the head of the local
\nconfronted Whirlpool executives and directors at the company’s annual
\nmeeting, calling on them to abandon their “narrow-minded, shortsighted,
\nunion-busting behavior.” The dispute was not settled until 1993.<\/p>\n

In 2006 the Evansville and Fort Smith plants lost a total of about
\n1,200 jobs to Mexico. Or, in the antiseptic terms of Whirlpool’s press release<\/a>: “The company also is adjusting its workforce levels at several of its
\nNorth American manufacturing facilities to optimize production levels
\nand take advantage of its expanded manufacturing footprint.”<\/p>\n

In other words, the current shutdown plan in Evansville is just the
\nlatest in a series of “adjustments” by which Whirlpool is ridding
\nitself of decently paid U.S. workers and replacing them with much
\ncheaper labor abroad. The 1,100 losing their jobs are the remnant of a
\nWhirlpool workforce in Evansville that back in the early 1970s totaled nearly 10,000<\/a>. Companywide, 26 of Whirlpool’s 37 production facilities are now located<\/a> outside the United States.<\/p>\n

It did not seem to occur to Whirlpool that there was anything
\nunseemly about accepting federal stimulus funds at a time when it was
\nclosing a domestic plant. In fact, something similar happened seven
\nyears ago. In 2003, during a period when the downsizing of the
\nEvansville plant was already under way, the company accepted a $1.3
\nmillion grant from the U.S. Department of Energy — via the Indiana
\nDepartment of Commerce — to help develop a new manufacturing process
\nfor energy-efficient refrigerators produced in Evansville (source:
\nAssociated Press, February 8, 2003 via Nexis<\/i>).<\/p>\n

Until the federal government is prepared to do something serious
\nabout offshoring, it should at least refrain from giving financial
\nassistance to firms that engage in the practice, even if the aid is
\ngoing to a different part of the company — and even if it is for a
\nlaudable purpose such as promoting energy efficiency. The federal
\ngovernment now has a (non-public) contractor misconduct database<\/a>
\nto help it avoid giving procurement awards to bad actors. Perhaps there
\nshould also be a list of job-exporting companies which would be
\nineligible for federal aid until they reaffirm their commitment to
\ndomestic production.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Phil Mattera, Dirt Diggers Digest Critics of the $787 billion Recovery Act complain it is not doing enough to revive the economy, but they rarely ask why the companies that are receiving stimulus contracts and grants are not hiring more people. Now one of those recipients is facing a growing controversy over its employment […]<\/p>\n","protected":false},"author":4533,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-375352","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/375352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4533"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=375352"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/375352\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=375352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=375352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=375352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}