Whirlpool, Roberts Dairy layoffs affect nearly 400 workers
By Gigi Wood
CORRIDOR – Hiccups in the national economic recovery have had an affect on businesses in the Corridor in recent weeks, as evidenced by major layoffs at Whirlpool in Amana and Roberts Dairy in Iowa City.
It was announced a week ago that 350 workers would lose their jobs at Whirlpool, while Roberts Dairy would shut down its production facility and 45 people would lose their jobs due to slowing consumer demand.
“Based on the current customer requirements, the Amana Division has confirmed a schedule reduction, effective Aug. 1,” Kristine Vernier, a Whirlpool spokeswoman stated in an e-mail. “The reduction will impact approximately 50 employees hired for temporary summer work and 300 full time employees. The division will follow all normal processes for schedule reductions.”
Following that announcement, Whirlpool declined to elaborate on details, but made this comment:
“Whirlpool Corp. is in a quiet period prior to our Q2 earnings announcement scheduled for July 21 and will not be able to provide additional information beyond the original statement.”
That earnings announcement was characterized as “disappointing” in the financial press, with the company reporting a second-quarter net loss of $161 million, compared with net earnings of $205 for the same quarter in 2010. Whirlpool expects 2011 U.S. industry unit shipments to fall by 1 percent to 2 percent this year.
Officials at the Iowa Department of Economic Development (IDED) said they were unaware ahead of time of the layoffs and were not asked to offer incentives to the businesses to keep the jobs.
“Retaining Iowa companies and attracting new investment and the jobs provided by them is a major focus of the IDED,” Kanan Kappelman, marketing manager for IDED’s business development division, stated in an e-mail. “We will work with partner state agencies and local economic development leaders within these communities to leverage resources towards creating new opportunities for the communities impacted by these announcements.”
Whirlpool laid off about 440 workers in October 2008 from its Amana plant. In February 2010, Whirlpool officials had announced plans to begin rehiring workers. The company hosted a major press conference to announce the rehirings and a major investment in its Amana factory, where workers produce freestanding freezer-on-the-bottom refrigerators.
Whirlpool received tax-increment financing from Iowa County and a $6.5 million forgivable loan from IDED to help make the re-hiring and equipment upgrades possible. The state said the award was made because Whirlpool was retaining 1,600 jobs and investing $20 million in its plant. Ms. Kappelman and other officials have said Whirlpool will be held that contract by retaining a certain level of employees.
“IDED is reviewing the Whirlpool contract and evaluating the impact based on the announcement made (July 15),” she stated. “Whirlpool has been an outstanding corporate partner and employer in Iowa. However, the contract does hold Whirlpool to a pledged job retention number, so we will work with them to determine their specific employment numbers and possible clawback. We will not have a final figure until we have a chance to verify their payroll numbers.”
Meanwhile, Brenda Dodge, manager of Iowa City’s Iowa Workforce Development office said a rapid response service was launched after the layoffs announcement. The service will help laid-off workers find new employment and training opportunities within the Corridor.
Representatives from Priority One and the Iowa City Area Development Group traveled to Whirlpool’s corporate headquarters in Benton Harbor, Mich., last week as part of a routine visit.
“Of course they talked about the layoffs. And I would probably describe it as due to the slow demand of appliance products,” said Dennis Jordan, Priority One’s vice president of economic development. “Long term, we don’t think there’re any larger problems there and in fact our conversations with Whirlpool are quite the contrary, about how to keep the Whirlpool plant in Amana competitive. I think there are some great opportunities.”
While the loss of jobs is unfortunate, Mr.Jordansaid he hopes it’s temporary. The pool of available skilled labor in the Corridor has increased, something that companies looking to locate inIowaconsider before making a commitment to the area.
“We had three (business building) announcements a couple weeks ago, two of which were adding employees. Between AgSugar International and Raining Rose, those are examples of hiring for advanced manufacturing-type positions,” he said. “As far as recruiting companies, one of the most common questions we get asked is, ‘Is there available labor in the area?’ On one hand, we’re able to able to answer that question with a ‘Yes, we have some people who would seemingly be available for positions.’ The next question is, do they have the right skill sets for the companies we’re working with? Some positions will require more training for these workers.”
Iowa’s unemployment rate is 6 percent. It is not yet clear whether that number will change due to the layoffs.
“There’s no one employer that’s going to be interested in hiring 300 people, but in general there is a demand for skilled labor throughout the region,” Mr. Jordan said. “As we are talking to employers, a lot of them are holding steady or adding a few positions. So I feel hopeful and rather confident that many of these people will be able to find other positions throughout the region.”
Mr. Jordan said Priority One feels Whirlpool is committed to Amana and the entire region.
“They realize the value of the people and the facilities there,” he said. “Our job is to do everything we can to make sure that plant remains competitive. The challenge for Whirlpool is twofold: the housing economy is still rather soft, which directly impacts their business. And secondly, they’re facing some direct competition from international companies such as LG and Samsung that are really creating challenges for them in the retail marketplace. Those two factors alone are pretty challenging for Whirlpool, but with that being said, Whirlpool is recognized as the largest appliance maker in the world and they’re a well-liked company. I think they’re well positioned to compete in the global economy.”
Meanwhile, in Iowa City, Roberts Dairy, at 1123 Dodge Street Ct., announced it will stop production and convert its building to a distribution facility.
Roberts, which was started in 1922, is now owned by Illinois-based Prairie Farms Dairy.
The Iowa City plant has begun receiving milk and dairy products processed at other Prairie Farms plants in the region. Prairie Farms’ Dubuque plant will service the Iowa City and Eastern Iowa area with company products.
“Employees who are affected by this change in operation will be given consideration for employment at other Prairie Farms facilities where job opportunities exist. Prairie Farms Dairy is committed to its employees, customers and the community,” Sarah Lake, a spokeswoman for the company, stated in an e-mail.
Roberts Dairy laid off 25 of its 100 workers a year ago. At that time, Jerry Steffensmeier, the then-plant manager of the Iowa City operation, said Roberts hoped to rebound and rehire the laid off workers. He said Roberts Dairy took a financial hit after losing its Walmart account. Mr. Steffensmeier no longer works for the Iowa City plant.
“Converting the Iowa City milk plant to a distribution facility will improve operational efficiencies and allow Prairie Farms to remain competitive in the marketplace,” Ms. Lake stated. “There will be no disruption of service or products availability to the area.”
Prairie Farms is a dairy co-op started in 1932 and based in Carlinville, Ill. Now a network of more than 700 farms, Prairie Farms and its subsidiaries produce dairy products from its 24 plants and 13 joint-venture centers throughout the Midwest.