Fort Dodge Messenger, IA
03/11/06
A ‘global marketplace’ hits home
Electrolux workers face the future
By SARA KONRAD Messenger staff writer
WEBSTER CITY — Larry Hoversten wasn’t surprised last month when he and
nearly 2,000 other Electrolux employees were told the company had decided to
eliminate about 700 jobs at the Webster City laundry products factory to make
way for a plant in Mexico.
‘‘Anybody who thinks this is a surprise has been sleeping for the last 10 years,’’
said Hoversten, 47, who has worked at the Webster City plant for 6 1/2 years. ‘‘I
understand why the line has to go. It has everything to do with the bottom line.’’
A competitive market
The Feb. 14 announcement by Electrolux officials said production of most of the
company’s current front-load washing machines and companion dryers will move
to a new factory in Ciudad Juarez, Mexico, which is located just across the
U.S./Mexico border from El Paso, Texas.
‘‘We operate in a very competitive global marketplace, and all of our major
competitors including Whirlpool, General Electric and Maytag, are presently
selling front-load washers produced in Mexico or other low-cost countries,’’ said
Tony Evans, vice president of corporate communications for Electrolux. ‘‘The
new factory for front-load washers is needed in order to meet expected growth
and increased demand for those products.’’
The Stockholm, Sweden-based Electrolux, which boasted worldwide sales of
$16.5 billion in 2005, will invest $139 million in its North American laundry
business, including construction of the 800,000-square-foot factory planned for
Juarez.
Electrolux has already invested about $140 million in Juarez. In January 2004,
the company announced it would close the world’s largest refrigerator factory in
Greenville, Mich., moving the 2,700 Michigan jobs to a new plant in Mexico.
Production in Michigan continued until earlier this month, when the plant closed
for good. The Juarez refrigerator plant, which started production in June 2005, is
the largest industrial building in the Mexican state of Chihuahua and employs
3,000 people.
The planned Juarez laundry products factory will begin production in late 2007
and ramp up to full capacity in 2008. Electrolux spokeswoman Blythe Reiss said
Webster City layoffs will likely happen in late 2007 or early 2008. The Iowa plant
will continue production of top-load washers and companion dryers, laundry
centers and one line of front-load washers and companion dryers.
Questions have been raised about the efficiency of top-load washers and
companion dryers and whether Electrolux will adapt the machines to comply with
new federal energy standards that will go into effect in 2007.
While Hoversten said he has seen work being done at the Webster City plant to
adjust production to comply with the new federal standards, Evans declined to
comment on company plans.
‘‘We do not discuss specifics of our product development programs,’’ he said.
‘‘However, Electrolux plans to continue to have a presence in the Webster City
area as the production location for top- load washers, companion dryers and
laundry centers. We will produce top-load washers in Webster City after January
2007.’’
Unmatched work ethic
While Hoversten said he’s confident Webster City will spring back from the
layoffs, he’s concerned about a downward slide in the quality of the washing
machines and dryers once production shifts to Mexico.
‘‘A cheap work force equals cheap results. There’s a risk investing in cheap
labor,’’ said Hoversten, who works on the laundry center line. ‘‘You can’t buy
good work ethic with a wage — it’s either there or it’s not.’’
Webster City Electrolux employees have said line workers inside the plant are
paid $14 to $15 per hour, while Electrolux employees in the Mexico refrigerator
plant make only $1.50 to $2 per hour.
‘‘There’s a product here in Iowa and the Midwest that you can’t put a price tag on
— work ethic,’’ said Hoversten. ‘‘You won’t get a Midwest work ethic anywhere
else.’’
According to Iowa Workforce Development’s 2004 annual profile, manufacturing
is the largest private industry in Iowa’s Region 5 (Buena Vista, Calhoun,
Hamilton, Humboldt, Pocahontas, Webster and Wright counties).
Of the region’s 52,224 workers, 11,020 — 21 percent — work in manufacturing.
Electrolux is the largest employer in the region.
But Electrolux’s reach stretches beyond the seven counties included in the Iowa
Workforce Development region. According to information provided by Paul
Eriksen, president of the Electrolux employees’ union, UAW Local 442, some
workers spend more than one hour a day commuting one way to the Webster
City factory.
Eriksen said union members who work at Electrolux cite residences in 21
counties that stretch from Black Hawk County in the east to Buena Vista and
Carroll counties in the west. Employees also come north from Polk and Jasper
counties and south from Kossuth County.
Bracing for the future
Eriksen said news of the coming layoffs wasn’t completely unexpected.
‘‘I always knew it was a possibility, but it was still a surprise when it happened,’’
said Eriksen, who learned of the layoffs during an early morning meeting
between union leadership and company officials Feb. 14. ‘‘We’ve always been
faced with the possibility that Electrolux might pull out of town.We were told the
decision was final and irreversible.’’
Eriksen said right now he and other UAW Local 442 officials are working on
getting information out to Electrolux employees.
‘‘I’m doing a lot of research right now to find out how we can help people who are
laid off,’’ said Eriksen, who has already met with some employees who are
concerned about their options.
Some of those options could include federal money that would help laid-off
workers go back to school for retraining. Eriksen said he’s currently looking into
applying for Trade Adjustment Assistance, which is available under the U.S.
Trade Act. TAA money could be used to assist workers who have become
unemployed because of shifts in production to foreign counties.
Officials at Iowa Central Community College in Fort Dodge have already pledged
that the school will be a part of retraining Electrolux employees.
‘‘We want to help Electrolux employees transition to other employment,’’ said Jim
Kersten, associate vice president of development and government relations at
Iowa Central. ‘‘We will work with laid-off workers. We’ll find jobs, match workers
to those jobs and get them the skills they need.’’
Eriksen said he’s also been in contact with the Hamilton County Iowa State
University Extension office, which is offering to provide classes that could help
laid-off workers cope with the stress of unemployment.
David Brown, education director at the Hamilton County ISU Extension
office said some of the classes include topics like how to handle the stress of
uncertainty, how to talk to your kids in uncertain times, eating well to reduce
stress and other free sessions that would teach participants about building
financial security before crisis hits.
‘‘Some of the Extension offices in northeast Iowa held similar classes up there
when layoffs happened with manufacturing jobs,’’ said Brown. ‘‘We got a lot of
information from them and we’re prepared to offer classes whenever they’re
requested.’’
The regional Iowa Workforce Development office is also offering help to workers
who may be laid off.
‘‘We’re doing everything we can to help. Workers can register at any time for
placement services and look for jobs on our Web site,’’ said Sara Messerly,
manager for Iowa Workforce Development’s Region 5. ‘‘We post job listings for
all over the state, but certainly we would like to help people find jobs locally.’’
Hoversten, who only planned to work at the Webster City plant for ‘‘one or two
years’’ said he’s been looking for a different job for a while. A native of Iowa
Falls, Hoversten said he and his wife are thinking about selling the house they
bought 12 years ago, but, he said, they would buy another home in the area.
‘‘Our family is in this area and we like it here,’’ said Hoversten, father of four and
grandfather of eight. ‘‘We’ll stay.’’