Whirlpool Faces Union Questions, Loses Trade Dispute

It’s been a tough public relations week for Whirlpool Corp.

On Tuesday (April 17), Whirlpool CEO Jeff Fettig and the Whirlpool Board of Directors faced pointed questions from union officials during a shareholders’ meeting in Chicago.

According to a press release from the United Steelworkers (USW), the union officials questioned Fettig and the Board about closing two refrigerator plants in Arkansas (Fort Smith) and Indiana, over the past two years, “while giving their top five executives more than $75 million in so-called ‘golden coffin’ commitments.” “Golden coffins” are payments made to an executive’s family after his or her death.

“We wanted to ask them, face to face, why they turned their back on us, after we worked so hard to help the plant stay in business,” USW Local 370 President Rick Nemeth, who works at Whirlpool’s Fort Smith plant.

Whirlpool announced Oct. 27, 2011, it would close the large Fort Smith plant that produces refrigerators and has also produced ice-makers and trash compactors.

The plant closure, expected by mid-2012, will mark the end of more than 45 years of Whirlpool operations in Fort Smith. The closure also will result in the loss of 1,000 existing jobs. However, Whirlpool’s Fort Smith plant employed more than 4,500 in early 2006. The loss of the about 1,000 Whirlpool jobs in Fort Smith will result in the overall loss of 1,550 jobs and a labor income reduction of $56.9 million.

Clyde Dailey, an international representative with the United Steelworkers who spent 32 years working in Whirlpool’s Fort Smith plant, said he and other union officials briefly reminded Fettig about a union proposal for the Fort Smith plant. In Fort Smith, Whirlpool operates in two buildings, the large manufacturing building and a smaller distribution and warehouse building. The union previously presented a plan in which Whirlpool would move all production and warehousing to the smaller of the two buildings.

“Mr. Fettig said they looked at all the options, but because of the (reduced) demand for the side by sides (refrigerators), he told us it wouldn’t be effective for that,” Dailey explained during an interview with The City Wire. “The answers we always get from them (Whirlpool management) is that it just boils down to lack of demand for those (side-by-side refrigerators).”

Rick Nemeth, president of Local 370, the USW affiliate representing Whirlpool workers in Fort Smith, has another opinion on the plant closures.

“It’s nothing more than greed. They will pay cheaper wages in Mexico,” Nemeth said in the union statement. “This is going to be devastating to our community.”

Whirlpool have been asked for a response to the union comments.

Also at the shareholders’ meeting, retired IUE-CWA member Davey Jones, who worked at the Evansville, Ind., refrigerator plant, which Whirlpool closed in 2010, presented a proposal that would require shareholder approval before “golden coffin” payments could be made. His plan received support from 39% of the shareholders and will appear on next year’s ballot.

Whirlpool Corp. is a global manufacturer and marketer of home appliances, with annual sales of approximately $19 billion in 2011. The company employs around 68,000 in 66 manufacturing and technology research centers around the world.

TRADE RULING
The U.S. International Trade Commission ruled Tuesday that bottom-mount refrigerators imported from South Korea and Mexico did not cause material injury to the U.S. industry.

Whirlpool in 2010 filed a trade complaint alleging that Samsung Electronics, LG Electronics and other foreign appliance makers unloaded appliances in the U.S. by selling them at less than fair value. Whirlpool asked the ITC to place duties on the transactions.

Whirlpool said Tuesday in will review the ITC ruling to determine if it will appeal.

“Of course we’re extremely disappointed by today’s ruling and the implications it has for our U.S. production of bottom-mount refrigerators,” Marc Bitzer, president, Whirlpool North America, said in a statement. “We believe the facts clearly demonstrated that dumped imports of bottom-mount refrigerators from South Korea and Mexico are causing injury to the U.S. industry. Despite today’s ruling, Whirlpool remains committed to taking action against any unlawful trade practices that threaten our 23,000 U.S. employees or our ability to produce in the United States the innovative and high-quality products that consumers demand.”

The Whirlpool products affected by this case are made in Amana, Iowa, where the company employs approximately 2,200 people.

Samsung officials welcomed the ruling.

“Whirlpool’s action in bringing this case simply resulted in a lengthy investigation that has been costly to the U.S. taxpayer, the result of which has been to prove that Samsung is in compliance with U.S. trade law,” noted a Samsung statement.

This article was written by Michael Tilley with our content partner, The City Wire. He can be reached by e-mail at [email protected].