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October 10, 2008
Whirlpool Corp. plans to lay off 440 employees at its Middle Amana refrigerator factory because of reduced demand, the company announced Thursday.
Employees were told Thursday that the combination of voluntary and involuntary layoffs means 60 people are scheduled to lose their jobs by Monday. The rest of the layoffs will take effect before Oct. 20.
"Like any manufacturing facility, we do have to flex and adjust to market demands and market conditions," Whirlpool spokeswoman Jill Saletta said. "It's just general market conditions."
The announcement comes slightly more than two years after state officials approved Whirlpool for a $5 million forgivable loan as part of an $11.2 million expansion of the Amana plant. Company officials announced then that they planned to add more than 400 jobs and boost employment to roughly 2,900 by the end of 2008.
Saletta said the plant, which draws workers from several surrounding counties and communities, including nearby Cedar Rapids, had 2,000 employees before Thursday's announcement.
Union officials at Local 1526 of the International Association of Machinists and Aerospace Workers, which covers about 1,500 Whirlpool employees, could not be reached for comment Thursday.
Last month, Whirlpool announced it will lay off about 700 workers at a refrigerator factory in Fort Smith, Ark., citing lower demand and rising prices for raw materials.
Kay Snyder, spokeswoman for the Iowa Department of Economic Development, said Iowa's contract with Whirlpool gives the company until July 2009 to meet designated job targets. But despite two years passing since state approval, Whirlpool has yet to tap its $5 million loan and has not notified Iowa officials about whether the company has any intention of doing so, she said.
"The company has not drawn down any of the funds," Snyder said. "If they have not drawn down funds at this point, I'd say it's unlikely that they're going to do so tomorrow."
Iowa economic development officials said in 2006 that Whirlpool's Amana expansion was projected to create and retain 2,774 jobs, most of which would pay an average wage of $18.47 per hour.
Whirlpool obtained the Middle Amana plant as part of the 2006 purchase of Maytag Corp. It closed Maytag's Newton plant and headquarters and cut about 1,800 workers.
Company officials said then that the Middle Amana plant had been selected for expansion partly because of its expertise in producing refrigerators with the freezer on the bottom - then the fastest growing configuration in the industry.
"It's ergonomics," Indianapolis kitchen designer and Iowa native Janice Patee said two years ago. "The area you access most in the refrigerator is at waist level. You're not bending over as much (with a bottom-mount freezer), not lifting."
Whirlpool stock closed Thursday at $64.50, down 4.15 percent.
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