Rheem to layoff 100 in Fort Smith by January 2013 (Updated)

by The City Wire staff ([email protected]) 254 views 

Officials with Rheem have confirmed a layoff of 100 jobs at the company's Fort Smith operation by Jan. 11. Rheem employees were told Thursday morning of the layoff plans.

Rumors of the layoffs began circulating on Monday. Rheem officials did not respond to numerous attempts to get comment about the layoffs until Thursday morning (Dec. 13).

While it is uncertain if the layoffs planned for January are seasonal or demand related, uncertainty has surrounded the future of Rheem’s Fort Smith operation.

“Today's HVAC manufacturing process is cyclical in nature, and to remain competitive, we often have to make staffing adjustments to reflect changing business conditions. Today in Fort Smith, we’ve announced a layoff of 75-100 hourly employees, effective Jan. 11, 2013, as a result of seasonal adjustments in volume. Today’s adjustment is consistent with annual staffing changes at this time of year. Rheem is constantly evaluating its employment needs for competitiveness, and we will make staffing modifications in the future as market conditions change."

Lindsey Ford, a senior public relations specialist with Rheem, said the layoff is just seasonal and does not signal any planned changes for the Fort Smith operation.

“With regard to your question from yesterday, we wanted to confirm that Rheem's Fort Smith plant is an integral part of our manufacturing footprint and we have no plans to close the facility,” Ford said in an e-mailed statement.

However, concerns remain about the future of Rheem’s Fort Smith operation.
Rheem officials confirmed in July 2012 they were moving some production from Fort Smith to a plant in Mexico, but would not provide detail on how the move might change employment levels at the Fort Smith plant.

The transfer is part of a three-year plan the company announced in June 2011 to move production and 250 jobs from Fort Smith to Mexico.

The company also announced in May it would cut 16 salaried jobs at its Fort Smith plant and a distribution center in Lewisville, Texas. A company official said at the time the move is not an indication the Fort Smith plant and its production is going away any time soon.

As of May 2012, the company had 290 salaried and 900 hourly workers in Fort Smith, a reduction from the 300 salaried and 1,100 hourly as of June 2011.

The Rheem plant in Nuevo Laredo, Mexico, produces air conditioners and heat pumps, and is also producing residential heating and cooling equipment once made in Fort Smith.

Rheem announced in October 2012 layoffs of about 50 Fort Smith employees in Fort Smith as part of a planned seasonal layoff. However, John Anthony, director of human resources for Rheem’s Air Conditioning Division, said at the time the layoffs were  the result of lower demand for their products.

Rheem recently moved to consolidate operations because of reduced demand.

“Based on business conditions and the slow recovery from the severe economic downturn, Rheem Manufacturing Company has made a difficult decision to permanently close Water Heater Innovations, Inc. (WHI) in Eagan, MN the second quarter of 2013,” noted a Nov. 1 statement from Peter Reynolds, a Rheem vice president and general manager. “Production will be consolidated into our Montgomery, Alabama Water Heating location.”