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Published: Tuesday, 8/28/2012

Whirlpool CEO says firm committed to Ohio plants

BY TYREL LINKHORN
BLADE BUSINESS WRITER
Whirlpool Corp. CEO Jeff Fettig addresses  the Toledo Rotary Club. Whirlpool Corp. CEO Jeff Fettig addresses the Toledo Rotary Club.
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Whirlpool Corp. may be based in southwest Michigan, but nowhere is the appliance-maker's manufacturing base stronger than in Ohio.

Chief executive Jeff Fettig said Monday the company has no plans of changing that.

"When you think about manufacturing and you think about Whirlpool, Ohio is Whirlpool for us," Mr. Fettig said Monday. "We have more assets invested in Ohio than any other state. We have more employees in Ohio than any other state. We're investing today in more new capital than any other state."

Five of Whirlpool's eight U.S. plants -- and almost half its 22,000 U.S. employees -- are in Ohio. It has a particularly strong presence in northwest Ohio -- the company makes washing machines in Clyde, dishwashers in Findlay, and freezers in Ottawa. Mr. Fettig spoke Monday in Toledo before the Toledo Rotary Club, using his address to talk about the company's commitment to and belief in U.S. manufacturing.

Whirlpool says 82 percent of what it sells in the United States is built in this country. The company, which is the world's largest major appliance manufacturer, pledged in 2010 to invest $1 billion in its U.S. operations by 2014.

In addition, it recently insourced mixer production from China to Greenville, Ohio, and brought some operations previously done in Mexico to its Clyde plant.

"We're doing it not because it's Ohio," Mr. Fettig said. "We're doing it because it's the right business decision and Ohio is our most competitive spot in the world to be doing this."

The company's labor and benefit costs are considerably higher in Ohio than they would be in some other countries, but Mr. Fettig said they're more than offset by productivity gains and money saved in logistics.

In general, Mr. Fettig said he doesn't buy claims that companies can't manufacture their products cost effectively in the United States. He believes the offshoring storm has calmed, and expects to see some operations continue to shift back to U.S. soil.

"I think companies have gotten smarter about what the real costs of doing business are," he said. "Is it a massive trend? No, but I think it's a continuous trend in the right direction."

Whirlpool had revenues of $19 billion last year. About half of that came from the United States, which still represents the world's most valuable appliance market. Still, the company says market demand in the United States is 28 percent below 2006 levels. Mr. Fettig said the company's strongest growth over the past few years has been in Latin America and Asia.

Earlier this year Whirlpool filed complaints with the U.S. Commerce Department and the U.S. International Trade Commission, alleging LG Electronics Inc. and Samsung Electronics Co. -- both based in South Korea -- were violating trade laws by selling washing machines in the United States for less than fair market value.

In July, the Commerce Department granted Whirlpool's request and instituted preliminary tariffs on those imported machines. A final decision is expected in January.

"We believe they're serial offenders in terms of violating trade law and it's costing jobs in Ohio in Clyde, and we aim to stop it," Mr. Fettig said in an interview after his speech.

LG and Samsung have denied Whirlpool's claims.

The Clyde plant employs about 3,400 people and can build a washing machine every four seconds. It is the largest washing machine factory in the world.

"The simple fact is we're selling less washing machines because of this," Mr. Fettig said. "It's not a cost advantage, it's not a product advantage, they're simply selling at uneconomical levels to try to gain, in our opinion, U.S. jobs."

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.



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