The Lima News
Last week’s announcement that Whirlpool was shifting the production of front-loading washers from Mexico to its plant in Clyde is another sign of a trend that sees more U.S. manufacturers bringing back work from abroad.
The move will mean 80 to 100 new jobs at the Clyde facility, with operations due to begin in April 2014.
The announcement came just a week before Christmas and was quite a gift for U.S. manufacturing. It heralded one of those rare moments where labor leaders, company executives and free market advocates could sit side-by-side on the same bench gloating, “I told you so.”
For labor leaders, the additional work at Clyde is a testament to the quality products produced by the American labor force.
Company executives see it as an authentication of their efforts to improve efficiency.
As for free trade advocates, they point to the switch as a sign that competitive, open markets provide better products more efficiently.
Jeff Durham tied that all together during an interview with the Wall Street Journal. Durham is the vice president in charge of U.S. manufacturing for Whirlpool, which is based in Benton Harbor, Mich.
He pointed out that production workers in Clyde are typically paid around $18 to $19 an hour, roughly five times higher than similar employees make at the facility in Monterrey, Mexico. But that huge wage discrepancy is offset by several things that give the Clyde plant lower costs overall. Electricity costs are much lower at the Clyde plant than in Monterrey, Durham pointed out, and the automation at the Clyde facility is superior to that found in the Mexican plant.
The shifting of work also plays into Whirlpool’s new strategy of making products closer to where it sells them. The products involved in the shift are front-loading washers that typically are used in Laundromats, hospitals, hotels and other commercial settings. Ninety percent of these products are primarily sold in the U.S. with the other 10 percent being exported to Europe, Australia, Latin America and Asia. Manufacturing the machines in Ohio allows the company to save transportation costs because the products won’t have to be shipped across a border before going into the company’s North American distribution network.
The Monterrey plant, which employs about 500, will not be reducing its work force. It will be increasing production of washing machines for the Mexican market. The shifting of work at both plants also will reduce the time needed to respond to changes in demand.
The company said its plan reaffirms Whirlpool’s continued commitment to its U.S. manufacturing base and its confidence in the skilled workforce at the Clyde facility.
At 2.4 million square feet, the Clyde plant is the largest washing-machine factory in the world. It employs about 3,300 people, where it currently manufactures all of its residential washers for the U.S. market. This includes production of washers sold under the brands Whirlpool, Maytag, Amana, Estate, Roper, Crosley, Admiral and Kenmore, as well as the company’s Canadian brand, Inglis.
Whirlpool currently employs approximately 15,000 U.S. manufacturing workers, more than all of its major competitors combined. Eighty percent of the products Whirlpool sells in the U.S. are made in the U.S. The company has committed to investing $1 billion from 2010 to 2014 in its U.S. footprint, including investments at the Clyde facility,
Whirlpool is among a number of U.S. companies who have been shifting their overseas manufacturing operations back to America in recent years, according to Forbes. Those decisions have resulted from a sharp decline in energy prices, advanced factory techniques and the slowness of the economic recovery outside of the United States,
“Since the beginning of 2010, companies have created more than 80,000 manufacturing jobs by moving production to the U.S. from foreign countries,” Harry Moser, president of the Reshoring Initiative, told the Wall Street Journal.
The U.S. continues to lose other manufacturing jobs to offshore plants, but those losses now are being offset by inflows, Moser said, adding: “We’ve stopped the bleeding.”
Source Article from http://www.limaohio.com/news/editorials-opinion/615889/Score-one-for-American-manufacturing.
