LITTLE ROCK — Fort Smith's 1.2-millionsquare-foot Whirlpool Corp. manufacturing plant is in contention for jobs that will come from a soon-to-be-closed plant in Evansville, Ind.
Benton Harbor, Mich.-based Whirlpool announced Friday that it will close its refrigerator factory in Evansville by next year and cut 1,100 jobs as it continues a push to trim excess capacity.
Whirlpool said it will move production of refrigerators with freezers on top to a company location in Mexico, where costs are lower. Ice-maker production in Evansville will be moved to a yet-to-be-decided location.
Whirlpool's refrigeration product development center also could be eliminated, but Whirlpool said it has not decided the fate of the center's 300 employees. It expects to in the "near future."
The production jobs will be eliminated in mid-2010. The world's largest appliance maker has aggressively cut costs as demand for big-ticket items has shrunk in the recession.
"We're going to work very hard to see if we can grow the production here at the Fort Smith facility,'' said Paul Harvel, president of the Fort Smith Regional Chamber of Commerce.
The business organization is likely to know more about the pending change in the coming month when Whirlpool and chamber officials expect to meet, said Harvel who is also on the board of the state's economic development commission.
The Indiana layoff announcement comes nearly a month after Whirlpool notified the hourly work force in Fort Smith about a mid-September layoff at the Jenny Lind Road plant.
Hourly workers in late July were also told that Whirlpool planned to cut 50 salaried positions. At the time, Whirlpool said layoff dates for those workers would be staggered depending on their jobs. Whirlpool said Thursday that it notified 30 workers that their positions were being eliminated, with the remainder lost to attrition and retirement.
Whirlpool has yet to confirm the number of affected hourlypositions.
Whirlpool's estimated 1,450 workers in Fort Smith make three sizes of side-by-side refrigerators at the Jenny Lind Road plant, as well as trash compactors and ice makers.
As recently as 2005 the plant employed as many as 4,600 people.
Whirlpool spokesman Jill Saletta, speaking at a Friday morning news conference webcast by Evansville television station WFIE, said the plant closing had nothing to do with worker performance.
"This decision is around cost," she said.
"We had to take a look at which plant we could get the best cost position in, and because top-mount refrigerators are not in the demand that they used to be and they're more of a commodity item, Mexico offers us the best cost platform to continue to produce [them]."
The "difficult but necessary decision" to close the plant allows Whirlpool to streamline its operations and reduce product overlap, said Al Holaday, Whirlpool's vice president for North American manufacturing facilities, in a statement.
The plant's closing fits into Whirlpool's bigger plan of reducing excess capacity that it built between 2004 and 2007, said Brian Sozzi, an analyst with Wall Street Strategies.
Cowen and Co. analyst Laura Champine noted that most Whirlpool factories are only running one shift, and the bigger plants have room to take up production from smaller locations like Evansville. She estimated that Evansville accounted for about 2 percent of Whirlpool's work force.
"If you look at what they've done over the past few years, it's been all about closing their smaller plants so they can maximize production at their larger plants," she said.
The company's profit outlook for 2009 remains unchanged from a July forecast of $3.50 to $4 per share. Whirlpool shares rose $1.15 to $65.28 in afternoon trading Friday.
Information for this article as contributed by Tom Murphy and Vinnee Tong of The Associated Press and Laurie Whalen of the Arkansas Democrat-Gazette.
Business, Pages 30 on 08/29/2009