Whirlpool?s Layoffs Ripple Through Banking Community

On Dec. 12, Whirlpool Corp. of Benton Harbor, Mich., announced 730 more layoffs at the company’s Fort Smith plant as it prepares to begin operations at a new manufacturing facility in Mexico.

With 400 layoffs announced in August, that brings the total number of Fort Smith jobs to be cut in 2006 to 1,130. That will leave 3,470 people working at the plant, which currently manufactures refrigerators, trash compactors and ice-maker components.

Banks have kept a close eye on what Whirlpool’s next move will be. Many people in the mortgage lending business face a challenge when potential customers have a significant change in their financial circumstances, said Jim Patridge, president of BancorpSouth Bank’s Fort Smith division.

Patridge said the city’s Chamber of Commerce will have to look at a long-term structural change away from manufacturing because the layoffs won’t only effect the workers at Whirlpool but also other businesses that serve them.

The city, although it may have dodged a bullet, is still trying to do whatever it can to retain the manufacturing plant, said Dean Kruithof, deputy city administrator. But he said it’s apparent that the city needs to look to restructure the local economy and attract businesses other than manufacturing.

The outsourcing of the 730 jobs to Mexico has nothing to do with the city’s infrastructure and what it can and cannot provide, other than Whirlpool is trying to compete globally and it has to go to a market where labor is less expensive, Kruithof said. The previous announcement of 400 jobs cut was “oversupply,” as it is with many manufacturing companies, he said.

Kruithof said he couldn’t guess what kind of multiplier effect it would have on the city because the loss of Whirlpool jobs has a different effect than those that are lost through attrition.