Production shift at Rheem could cost 100-150 jobs in Fort Smith

It’s one of those classic “good news, bad news” situations at Rheem’s Fort Smith plant. Two productions lines will end at the plant by the end of summer, reducing employment by as much as 150. But the company says the plant will be the “primary production site” for large commercial air conditioning units.

Changes expected this summer are part of a companywide three-year production plan set in motion in June 2011 that have resulted in several rounds of employment changes at the company’s Fort Smith manufacturing plant.

Several sources recently told The City Wire that two lines were being moved out of the plant, with job losses estimated between 100 and 150. The sources also said the changes would push salaried and hourly employment at the plant below 1,000, and possibly below 800. In June 2011 the plant had around 300 salaried and 1,100 hourly jobs.

Lindsey Ford, a senior public relations specialist with Rheem, said Thursday in an e-mail note that business at “Rheem’s Fort Smith plant, and throughout Rheem, is going well.” She said production in Fort Smith is shifting to commercial HVAC (heating, ventilation, air conditioning) equipment.

“Most importantly, the Fort Smith plant is strategically positioned within Rheem to serve as our primary production site for commercial HVAC equipment. With its central location, Fort Smith provides convenient access to prime commercial markets. We are presently making capital investments at the facility to prepare for future commercial product launches. We are very excited about the great work taking place at this plant and we remain committed to growing in Fort Smith,” Ford noted.

Focusing on commercial HVAC means a residential production line “temporarily” transferred to Fort Smith in August 2014 will close at the end of July. Also, gas furnace production in Fort Smith is being moved to a Rheem plant in Nuevo Laredo, Mexico.

“We have been progressively phasing out gas furnace production in Fort Smith over the last four years. We expect to complete this transition by late summer,” Ford wrote. “We anticipate some staffing adjustments after we fully retire these products. However, we have not determined the total impact at this time.”

The manufacturing sector in 2014 ended eight consecutive years of declines in annual average employment in the Fort Smith metro. Annual average jobs in the region were 27,900 in 2005, falling to 17,500 in 2013 before rising to an average 18,100 in 2014.

Fort Smith metro manufacturing jobs were an estimated 18,100 in March, better than the 17,900 in March 2014, but down almost 35% compared to 10 years ago when March 2005 sector employment stood at 27,700. Based on recent revisions by the U.S. Bureau of Labor Statistics, manufacturing employment in the Fort Smith metro peaked at 31,200 in June 1999.