Last week Whirlpool announced that it will close its manufacturing facility in Fort Smith, AR by mid-2012, laying off 1200 salaried workers in addition to the 800 the company had already laid off. "As we previously stated, in a period of uncertain economic growth and consumer demand, we would be prepared to take the necessary actions in order to expand our operating margins and improve our earnings," said Jeff M. Fettig, Whirlpool chairman and CEO in an Oct. 28 announcement. "Given the weakening global economic environment, we are today announcing plans that will result in substantial cost and capacity reductions."

Whirlpool Mexico

The Fort Smith plant made refrigerators, and according to the company's information, the work is being moved to Whirlpool's other manufacturing facilities in North America. Some of the work from the Fort Smith facility will be transferred to plants in Iowa (built-in refrigerators) and Ohio (trash compactors), but the refrigerator products will likely go to Mexico, where Whirlpool has numerous manufacturing plants to serve its growing Latin American consumer demand. North American revenues fell 2% to $2.4 billion during the 3rd quarter, while revenues for Latin America rose 8% to $1.2 billion. In total, the company announced plans to cut 5000 positions from its global workforce in light of falling shipments in all regions of the globe except Asia.

Dumping fridges or dumping employees

There's a bit of a dichotomy going on with Whirlpool given that on Oct. 27 the Commerce Department issued a preliminary determination finding that foreign producers in South Korea and Mexico - including Samsung Electronics and LG Electronics - violated United States and International trade laws by dumping bottom-mount refrigerators in the United States.

"The Commerce Department's preliminary finding of dumping validates the legal actions we are taking to protect our 23,000 employees in the United States and the communities in which they work," said Whirlpool Corp. spokesperson Kristine Vernier. "When foreign companies like Samsung and LG violate trade laws, they destroy the ability of United States producers to invest, innovate and create jobs here in America."

Um-m-m, did I miss something here? This is the company that for a number of years has acquired other appliance makers such as Maytag, closed plants (to get of redundancy in manufacturing operations), laid off workers by the thousands, and moved much of its manufacturing to Mexico. In mid-2010, the company closed the Evansville, IN, plant and 1100 people lost their jobs as that work went to the facility in Ramos Arizpe, Mexico. In October 2009, Whirlpool announced a $55 million investment in a new manufacturing plant in Apodaca, Mexico that would employ 1100 people.

It's true that Whirlpool has made several recent investments in the U.S., including construction of a new plant to manufacture built-in, premium cooking appliances and a distribution facility in Cleveland, TN, at an investment of $120 million; a $175 million investment in its laundry facilities plant in Ohio; a $20 million investment in its Amana, IA refrigerator plant; and a new $40 million, 1-million-sq-ft distribution center in Wilmer, TX.  

Vernier said, "Whirlpool Corp. spends $7.4 billion each year in the United States to offer innovative products consumers are seeking. Of the products we make, more than 80% of what we sell in America is built in America."

That may be true, but the Whirlpool washer and dryer I purchased a few years ago was manufactured in Mexico. (I won't go into my story about the washer!)

"Maintaining jobs in the United States requires restoring fair competition through the strong enforcement of United States and International trade laws," Vernier said.

Well, it also takes companies dedicated to being competitive no matter where they manufacture their products. And let's face it, these companies manufacture their products in Mexico to serve the North American market just like Whirlpool does.

"The Commerce Department found company-specific dumping margins for four Mexican producers (Samsung 36.65%, LG 16.44%, Mabe 36.21%, and Electrolux 19.80%) and two Korean producers (Samsung 32.20%, and LG 4.09%)," said Whirlpool's information. Well, three of those four "Mexican" producers aren't really "Mexican" producers but Asian and Swedish OEMs manufacturing in Mexico, just as Whirlpool is a U.S. OEM manufacturing in Mexico.

Mabe, founded in 1946 in Mexico City, is a Mexican producer. In 1986, Mabe (Ma-bay) entered into a joint venture with General Electric (which took a 48% minority stake in Mabe) to produce appliances for GE for the U.S. market. By the mid-1990s, said one resource, more than two-thirds of all gas ranges and refrigerators imported into the U.S. were designed and manufactured by Mabe in Mexico; 95% of those sold under the GE name were manufactured in Mabe's plant in San Luis Potosí.

I find it difficult to believe that Whirlpool can't compete with these companies given the fact that they all manufacture in Mexico!           

"As a result of the Commerce Department's action, affected importers will be required to post bonds as security for future payment of anti-dumping duties if United States' wholesale sales prices on bottom-mount refrigerators are not raised to fair value," said a Whirlpool release.

If Whirlpool wants consumers to see the value in their appliances, perhaps the company needs to mark its products more clearly - for their "premium" Made in the USA appliances, they should proudly and clearly state "Made In the USA!" For those appliances made in Mexico, clearly state that as well: Made in Mexico. 

It's sort of like that quote from Ted Turner: "I don't mind paying more if the value is there."  Sell the value of "Made in the USA." Let consumers choose which products they want to buy, and how much of a "premium" can be placed on "Made in the USA." Given the climate of late, I'm almost certain that Made In USA would win consumers' hearts and minds.