Whirlpool Update - 19.3 Million Taxpayer Dollars

Disclosure: Whirlpool Corporation is not a competitor to my own company.

A company's reputation and public image is very important.  Companies often spend a bundle to carefully craft their image for consumers and no company looks forward to bad publicity.

A brand name is carefully developed and promoted with the hope it will embed itself in the conscious and subconscious minds of consumers.  I cultivate and guard the reputation of my own brand as will my son after me.

Whirlpool, the company and the brand enjoyed decades of consumer trust and regard. They are a splendid example though of how a brand is betrayed.

I wrote a post in September 2009 about Whirlpool and there is now more to write about the company.

Whirlpool is presently engaged in damage control. There is fallout from their decision to close their Evansville, Indiana plant.

Whirlpool is not committed to U.S. manufacturing, precisely why they sit on our watch list. They've spent years closing U.S. plants and moving production abroad to low wage countries. They have several plants in Mexico where they will pay inexperienced workers $70.00 per week after they close the Evansville plant. Whirlpool is presently busy removing equipment & machinery from the plant and shipping it to Mexico.

It does not matter that my company and the thousands we list on our site can compete in the marketplace. It does not matter that G.E. returned to the U.S. to manufacture appliances. It does not matter that Evansville extended numerous tax breaks to Whirlpool and community members, including Whirlpool employees actually subsidized the corporation. It does not matter that Whirlpool applied for and received $19.3 million taxpayer dollars in stimulus funds to offset their research costs. It also does not matter that Whirlpool enjoys about $19 billion per year in sales.

Even though the rest of us can compete - what matters is that appliance giant Whirlpool is unable to compete, even with taxpayer assistance. Whirlpool Corporation can only afford $1.75 per hour employees.

This is Mr. Jeff Fettig, CEO of Whirlpool Corporation.

You and I know the buck stops at his desk but you'll have to excuse him because he's been preoccupied.

Whirlpool Corporation is headquartered in Benton Harbor, Michigan. Ever since Whirlpool and other manufacturers moved production from Benton Harbor, the area has been in decline and a state of decay set in with high unemployment and poverty. The cruel and deplorable results of offshoring lay just outside Whirlpool's doors. Rather than witness & comprehend what their management & policies delivered to their fellow Americans, Whirlpool sought to remake the area as a community befitting a global corporation.

Mr. Fettig, like the CEO before him wanted a "world class community" with a world class golf course. Mr. Fettig and a developer were busy for several years battling with local residents over a public park.

In 1917, 73 acres of land situated on Lake Michigan were donated to the townspeople of Benton Harbor in perpetuity. It was known as Jean Klock Park.

John & Carrie Klock deeded the property to the city in honor of their deceased daughter, Jean.

"Perhaps some of you do not own a foot of ground, remember then, that this is your park, it belongs to you. Perhaps some of you have no piano or phonograph, the roll of the water murmuring in calm, roaring in storm, is your music, your piano and music box... The beach is yours, the drive is yours, the dunes are yours, all yours. It is not so much a gift from my wife and myself, it's a gift from a little child. See to it, that the park is the children's." - John Nellis Klock

The community treasured their park and fought for it but Whirlpool needed that lakefront property for their world class golf course. The majestic Lake Michigan views are now for Mr. Fettig and other Whirlpool executives to enjoy.

The developer, Harbor Shores did receive at least 120 million in funding and tax incentives from the state of Michigan. To compensate for the community's reduction in public parkland, Harbor Shores swapped some other parcels of land for the desired public property. It turned out that those other parcels were contaminated with dangerous levels of lead, arsenic, volatile organic compounds, and polynuclear aromatic hydrocarbons. The Harbor Shores Board President is David Whitwam, retired Whirlpool CEO. I'm sure Mr. Whitwam considered a swap of contaminated inland parcels for pristine lake front public property a square deal.

This is Mr. David R. Whitwam, Retired Whirlpool CEO, Harbor Shores Board President.
 
Whirlpool insisted that the course would benefit the community. Per capita income for Benton Harbor is $8,965, the lowest in Michigan. If you are in the area and you'd like to play this course rather than the numerous other courses in the vicinity, schedule a tee time two weeks in advance and take about $175.00 with you - the cost of a round of golf.

I have no doubt that such a course is a morale booster for Whirlpool executives. As I recall time spent at my club, the course is a relaxing place to discuss business. I don't expect any Whirlpool executives to catch a clue though by the 18th hole as they ponder ways to approach damage control.

You see the 1,000 American workers in Evansville are understandably displeased with the closure of their plant. As Americans with strongly held views will do, they planned a demonstration outside their workplace. Upon learning of these plans, one of Whirlpool's executives laid down his golf club long enough to send a memo to those employees explaining that "these negative activities will only hamper employees when they look for future jobs."

The purpose of the memo was to limit publicity and public awareness of Whirlpool's actions. Whirlpool prefers to discreetly export American jobs while reaching into taxpayers pockets. After all, they do have a brand to protect.

Whirlpool attempted to intimidate their employees who held their demonstration anyway and have now filed a Federal case against Whirlpool with the National Labor Relations Board.

In a recent interview Mr. Fettig was asked the following question:

"Ethics has also been a big issue in the press. Some companies and some sectors in particular have been hit very hard by ethical issues. Are you doing anything differently in this arena?"

This was Mr. Fettig's answer to the question:

"We have had a long history, dating back to the beginning of the company, of being a very ethical and morally responsible company. It is part of our culture. We evaluate people on ethics. We have a very broad compliance and training program. We have a saying at Whirlpool: There's no right way to do the wrong thing. At the same time, we are a big global company. We have 70,000 people in 170 different countries. You always worry that someone somewhere could do something that is not appropriate."

Next year, Whirlpool will market their new smart dryers which you, the American taxpayer helped finance. They will only cost you about $10.00 to $20.00 more and are expected to save you between $20.00 and $40.00 per year in electric costs. Sales are down for Whirlpool and they no doubt have high hopes for this innovation. By 2015 they will incorporate this technology into all their electric appliances they produce worldwide.

This U.S. taxpayer funded innovation could improve sales for Whirlpool - well, unless someone somewhere did something that was not appropriate and hurt their brand.

Mary - Proud American manufacturer and webperson for FindUSMade.com

Do You Have What It Takes To Be An American Manufacturer?

Could I interest you in some role-playing? Would you like to test yourself by making some important business decisions? Would you like to explore your ethics and values as well as your business savvy? If you’re game, please keep reading.

Let’s review our respective circumstances in this role-playing exercise.

I’m a manufacturer in the US and I must pay at least the minimum wage for labor.

I operate according to guidelines, regulations and laws that govern my product and my conduct. There’s a set of standards and regulations for every manufacturer operating in the US. They govern what I can and can’t do when I manufacture.

Perhaps you’re thinking that my circumstance is somewhat stifling, enough possibly to get in the way of profits. I’m thinking though that I have the easy role in this exercise.

You are a manufacturer in China. Technically, there is a minimum wage but you can ignore that if you like and pay what you wish for labor.

The Chinese government takes no proactive role in manufacturing and only addresses problems if they become known and made public. It’s extremely doubtful that your product will ever be inspected or tested. With no regulations in place to get in your way, you are free to make all sorts of choices.

That sounds rather splendid doesn't it? As a theory, regulations are an unnecessary burden that would just get in the way of your profits, right? Let’s take that theory to the real world and test your ability to make decisions.

All sorts of US companies have come to your country, China, looking for the absolute cheapest price for goods. Quality & innovation can be had elsewhere so everyone comes to you solely for cheap prices. You’re positioned well with great flexibility on how you manufacture and how low you’re able to keep labor costs. You’re ready to make some money, aren't you?

This exercise could be accomplished with a variety of products from any industry, but we’ll use simple, familiar examples.

For now, you get to manufacture paint. It’s okay if you don’t know much about chemicals because I have only 1 decision for you.

Do you use lead pigment in your paint or a more expensive alternative?

I know you just started manufacturing and this is new to you but this decision must be made in your new business. Do you have an answer? You can secure a contract and move product out the door if you've sharpened your pencil. How badly do you want a contract? Using lead pigment lowers your product cost, right?

How nice that the government - delighted with their role in the global economy, doesn't care about the decisions you make in your business. You deserve to succeed, correct? You certainly deserve the contract.

Somehow I sense that you haven’t yet committed to a decision on the lead pigment. Does something give you pause about such a choice? Oh, you know that lead is a poison, don’t you? You might worry that your paint would be used on toys. Children would be exposed to the lead in your paint and they could suffer with blood and brain disorders.

Is there any reason though to drag ethics and conscience into a business decision?

Don’t look at me, I face no such choice. I could have contracted product in China but it never crossed my mind because I don’t want any part of such a decision so I’m manufacturing in the US. You’re the one with the freedom and flexibility, which should serve business well, right?

So, do you use lead pigment in your paint or a more expensive alternative?

I understand your hesitation, believe me, I understand.

Your fellow manufacturers in China will readily make that decision so we’ll leave the paint manufacturing to them and find you another role.

Okay, how about a fun business like making toys? Congratulations, you’re now a toy maker in China. Disney is already knocking on your door with a contract for swell and cool looking painted toys. They want them of course, as cheaply as possible.

Painted toys? Eh. You know a thing or two now about paint in China, don’t you? Your government even signed a meaningless agreement in 2007 that banned the use of lead paint on toys. It’s not enforced and is ignored by your fellow manufacturers.

You’d rather not use any paint on your toys that has lead pigment. Where would you find some and what would it cost? What would it cost to test so you could be certain it was free of lead?

Pressure to produce goods cheaply, always seems to turn you and your fellow manufacturers toward difficult choices, doesn't it? Maybe you can cut back further on payroll and hope your people will still come to work. You can’t save money by cutting frivolous things like safety equipment because unlike me, you never made any such purchases. Ensuring any product safety just adds cost to your product and makes it harder to compete for contracts. You’d certainly like that contract with Disney though…

What do you do?

You haven’t had any fun yet nor have you made any money.

You know it’s possible, but maybe you’re just not cut out to be a manufacturer in China. That’s okay, neither am I.

Maybe you’d like to own an American business and outsource your manufacturing. That role comes with many perks. That could be fun. You see, if you outsource production, you can trade labor & material costs for a massive profit margin. Nice. Retailers love that margin and they'll throw consumers a dollar or three in savings to bait them into buying something imported over something domestic. Your products will get a ton of shelf space.

Go ahead and arrange that fitting for new suits at the tailor. Check out the Hamptons and choose from the many available homes. Select a designer and get the boardroom redecorated.

You'll make lots of money in business and that's what counts, right? You can nail the American dream. Who would have guessed that the path to the American dream ran through China? You'll be part of the global economy and you can have a nice office building with an American flag flying out front.

The likelihood exists that one of your products will one day be recalled, but given your massive profits, you'll be able to handle the loss from such an event.

Would that role suit you?

You don’t have to wonder at all if I envy someone in that role because if I did I would have outsourced my own production.

You know, there’s a reader I lost earlier when they decided in favor of lead pigment. I lost another reader who would have crossed their fingers when they bought paint for their toys. I lost yet another reader who is daydreaming about grand homes in the Hamptons.

I’m left only with you, someone who hasn't yet found a role that suits them in this exercise.

Welcome brother. Come have a seat by me because it’s clear that you have what it takes to be an American manufacturer. Let me tell you about the role. You won’t make massive amounts of money but if you work hard you can make a good living. In addition to income, you’ll have wonderful people who work with you daily and help you succeed in business. You’ll view them not as an expense, but as family.

You'll make decisions that serve you in the long term, not the short term since you're building a business for this generation and the next.

You’ll have to deal at times with retailers that can be downright hostile to your products because of their smaller profit margin, but you’ll take great pride in the products you produce.

You’ll sleep well and contentedly at night except when you worry about competitors foreign made products because you know where they cut corners.

When shoppers question you about your products, you can tell them honestly that quality and safety matter to you because your actions prove it every day. Any time you like you can leave your desk and step out on the shop floor. Keep your eyes and ears open because the same people with hands on your product can offer tips and ideas that you can use.

An especially good part is the customers. You’ll come to treasure them because they’re the ones who value what you produce. You’ll come to recognize their names and faces because they return so often to do business with you. You’ll be thankful that at no point in your lifetime will you likely look one of these people in the eye and apologize because your product harmed one of their family members.

You’ll also get to set up a special file. It’s not for complaints, no, it’s for those hand written letters from your customers. You’ll be surprised and flattered whenever you receive them, yet, there they’ll be with expressions of gratitude. Yep. You’ll get them and treasure them as well. You might even have them framed so they can adorn your office walls because you consider them the most prestigious awards you won this year.

You and I can laugh at those rewarded only with dollars and who don’t realize that ethics and values are very much a part of smart business. We’ll agree that the American way is the very thing we should export in the global economy.

Outside your plant, you’ll likely fly the American flag. You might even raise it yourself in the morning. You’ll know the same as I that the path to the American dream doesn't run through China. You’ll recognize everything that is right and just about that flag flying outside your door. It’s fitting for everyone whose love of country is greater than their love of money.

Mary - A proud American manufacturer and web person for FindUSMade.com

We've Outsourced Our National Security

I recently read a comment on a blog, the topic of which was the ramifications of domestic and foreign manufacturing. A woman offered a comment from her husband. He had told her that he doubted our country could defend itself in the event of a military attack, the reason being that we would most likely be awaiting parts from China. It may have been a flippant comment but it haunts me.

We're friendly with the owners of another small business. One of the lines they distribute was US made until recently. The line is now manufactured in China. The products are used by hospitals, police departments, government offices and our military. While there is no complaint presently with the quality of the products, there is on occasion a back-order of some items. Currently they face a 6 to 8 month wait on delivery of an item requested by a facility in the state of Texas.

Now, what if this was an emergency?

Mary - web person for Find US Made.com