Last August, managers at the Whirlpool refrigerator plant in the southern Indiana city of Evansville called electrical workers union (IUE-CWA) local president Darrell Collins to an early morning meeting. They unceremoniously told him that Whirlpool, a fixture of the community for five decades, would close the factory in June 2010, eliminating 1,100 jobs.
Although they blamed slow sales resulting from the housing bust, they were not eliminating production of refrigerators. They were moving operations to an expanding factory in Monterrey, Mexico.
“They wouldn’t sit down and negotiate or talk to us about it at all,” Collins says. “They just said that with the number of plants they had, it was beneficial to eliminate some.”
The decision hurt doubly when Collins recalled how local governments “gave Whirlpool tax break after tax break to invest here, and the company lied about how many jobs were created.” And it hurt even more as he thought about the $19 million in federal stimulus money Whirlpool got to create new jobs.
“We made Whirlpool what it is,” Collins says. “There’s no reason why the company can’t turn this around and say, “I’m not moving the company out of the U.S.’”
So today – Friday – hundreds of workers and community supporters, including the mayor, are planning to join in a demonstration at the plant with AFL-CIO president Richard Trumka. The company, apparently, is not too happy about that. On Wednesday management sent a letter urging employees, many of whom will lose their jobs in March, not to participate and ominously warning “that these negative activities will only hamper employees when they look for future jobs.”
The union filed an unfair labor practice charge for threatening workers if they took part in a union rally.
At a time when there’s a desperate need for jobs in the U.S., corporate relocations of profitable businesses out of the country further slow recovery, hurting prospects for workers in both the U.S. and Mexico.
Unfortunately, Whirlpool is not alone in pursuing an anti-recovery strategy. In late December, around Christmas time, German-based Hugo Boss announced that in April it will close its 300-employee men’s high-end suit factory in the Cleveland suburb of Brooklyn. Both the plant and Hugo Boss itself are profitable, according to Workers United/SEIU union officials, but Permira, a private equity firm with a large stake in Hugo Boss, burdened the company with debt and fees.
Boss spurned efforts by Ohio officials to save the plant, after the union rejected cutting wages from roughly $13 to $8 an hour. But the union continues trying both to find public aid for the factory and to put political and public pension fund pressure on Boss to stay in Ohio rather than move operations to its factories in Rumania or Turkey.
The 2009 stimulus package – the American Recovery and Reinvestment Act (ARRA) – created or preserved between 1 million and 2.1 million jobs, according to a new Congressional Budget Office report, many of them state and local government jobs that won’t go overseas. The most effective ARRA measures were direct government purchases of goods and services and transfer payments to states and individuals, such as for extended unemployment benefits.
But the Alliance for American manufacturing argues that the Buy America provisions in ARRA – which are written to be compatible with existing trade agreements – have been particularly successful in saving and stimulating domestic manufacturing jobs. For example, $63 million in federal stimulus money for a Tucson, Ariz., streetcar system will create jobs in Clackamas, Oreg., at United Streetcar, a start-up that will build the first modern streetcar in the U.S. in nearly 60 years. Because federal funding requires that the streetcars include 60 percent domestic content, suppliers of manufactured components around the country will also expand or stabilize employment.
The reason for slow recovery of jobs in recent recessions was the slow rate of economic growth during recovery, argues Center for Economic Policy Research economist Dean Baker. That remains a big worry for this far deeper slump. Even if it isn’t always possible to stop export of jobs, slowing the leak of stimulus money and directing it to sustainable manufacturing jobs can be an important way to spur the growth and creation of new jobs.
David Moberg, a former senior editor of In These Times, was on staff with the magazine from when it began publishing in 1976 until his passing in July 2022. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy.