Tuesday, February 23, 2010

Whirlpool Exec Responds: The System Made Us Do It

By Dave Johnson, February 22, 2010

In last week’s post, Whirlpool Bites Hands Of American Taxpayers That Feed It, I wrote about Whirlpool closing a factory in Evansville, Indiana. In summary,

• Whirlpool closes a plant in Evansville.
• Taxpayers will shoulder the unemployment and other costs.
• All the local supplier, transportation and other third-party jobs are destroyed.
• Even more home foreclosures in the area as a result.
• Local businesses are stressed or have to go out of business.
• They are playing nearby Iowa against Indiana for tax breaks and subsidies to keep just a few of the jobs.
• Whirlpool is profiting from making all this someone else's problem.
• And, of course, Wall Street celebrates the move.

This would be just one more “dog bites man” story – a company closes a plant and moves production out of the country, destroys workers’ lives, devastates communities and small businesses, sets states against each other, increases their profit margin, and Wall Street cheers. We read the same story over and over again for decades now, and the economy and the country of course have reached a limit of what can be lost. So what? What else is new?

But at Huffington Post a Whirlpool spokesperson responded, saying the post is “based on misinformation that’s floating around the Internet.” He wrote that their decision was based on “competitive factors.” In other words, Whirlpool says that the system made us do it. (The response in full is at the end of this post.)

The spokesperson for Whirlpool is exactly right. It is the system that makes them do this. They are only following the market’s orders.

Set aside for a minute the lack of humanity in Whirlpool's response, the lack of patriotism, the placing of market values (privatize the profits, socialize the costs) above human values, and the lack of concern for the destructive effect of their moves on the larger American economy. The system - the market - lets Whirlpool plead that those things are not Whirlpool’s job or concern. They are only trapped in the rules of the playing field and it is the job of We, the People to set those rules. It's OUR fault, not theirs...

So to the extent that we are upset that Whirlpool moves jobs to Mexico, devastates surrounding communities, sets Indiana and Iowa bidding against each other for a few scraps and killing off the supplier and other businesses it isn’t Whirlpool’s fault, “WE” have fallen down on the job. WE have allowed a few large monopolistic corporate giants to take over the job of defining national policy. And of course those monopolist giants set the rules to their own advantage and against the interests of the rest of us, including all of the Whirlpools (unless Whirlpool becomes lucky enough to be the biggest, then THEY get to set the rules.) A few monopolistic giants benefit greatly from keeping this system the way it is, so their lobbying power keeps the country from changing the rules to benefit anyone else.

The rules are what they are. Yes, that’s a huge part of the problem.
BUT while Whirlpool pleads a “competitive factors” case, let’s look at Whirlpool’s competitor GE. GE isn’t perfect, but they are finding ways to move jobs BACK to the US. For example, look at this recent news report, General Electric announces new product coming to Appliance Park GE announced Appliance Park will get a new product - a "hybrid" or energy efficient water heater. The product line will arrive in 2011 and bring with it 400 new jobs.
How was GE able to make Louisville work for producing durable goods, when Whirlpool is not able to make Evansville work? Is it a lack of corporate imagination on Whirlpool’s part? Why isn’t Whirlpool inspired to go the extra mile to find ways to keep jobs here, to help the communities that surround them and to help the workers who build their products for so many years? Are Whirlpool's executives just happy enough with their profit margins, and this is all that matters? Will Whirlpool work to change the system that makes them do the things they do?

And more importantly in the big picture, I conclude this post with the same question as the previous post concluded: Will Congress listen?

Here is the Whirlpool spokesperson’s response:
Dear Dave Johnson and readers of the Huffington Post:
In reviewing your blog post, I noticed it appears to be based on misinformation that’s floating around the Internet. I’d like to contribute the following facts for the sake of context and clarity.
• Whirlpool has approximately 17,000 U.S.-based manufacturing employees - more than any of our competitors.
• We produce the majority of our major appliances in the U.S., while some of our competitors do not produce any of their major appliances in the U.S.
• The economic downturn and other factors lead us to expect lower demand for the refrigerators produced by our plants in Evansville, Indiana and Apodaca, Mexico, and we therefore decided to consolidate their manufacturing in one location.
• We based our decision to consolidate in Apodaca on a full analysis of all the competitive factors between the two plants.
• We worked with Indiana state and local officials to keep the company’s Product Development Center of 300 design engineers in Evansville.
• As a recipient of $19 million in stimulus funds from the Department of Energy’s (DOE) Smart Grid Investment Grant program, we are required to match that amount with an investment of equal value in the development of new smart products. The grant and related investment are completely unrelated to the manufacturing of existing product lines such as these refrigerators.
• We have honored the Union and others’ requests for meetings to discuss the decision, but given the competitive nature of the industry and the state of the markets, no combination of changes proposed at those meetings could make the plant competitive.
We appreciate the support shown for our Evansville employees, and hope that this message helps clarify the facts.
Thank you,
Christopher Wyse, Corporation Director, Communications & Public Affairs, Whirlpool Corporation