Governor Tom Vilsack and other state officials met privately with Whirlpool executives this (Thursday) afternoon, trying to persuade the company to keep Maytag operations in Newton, Amana and North Liberty open.
But Vilsack told reporters moments before the meeting began that it’s a tough sell. “This is a very difficult and tough situation that America finds itself in and Iowa now finds itself in,” Vilsack said. “We are now engaged in a global competition and it is probably most specifically impacting and affecting manufacturing generally in the United States of America.”
Vilsack last year helped craft a package that kept the Wells Blue Bunny Dairy in LeMars and when he was a state senator Vilsack helped draft legislation that lured Ipsco to open a steel plant near Muscatine, but the governor is less optimistic about this project. “I don’t want to underestimate the difficulty of the challenge that is faced because there are significant differences in terms of the costs of doing business at other locations,” Vilsack said.
Nearly 5000 Iowa jobs are on the line with Whirlpool’s decision about what to do with its newly-acquired Maytag operations: about 2500 workers are employed at the Amana plant in Amana, another 2300 are employed in Maytag facilities in Newton and 100 work at a distribution center in North Liberty.
Dave Swift, CEO of Whirlpool’s North American operations, said Whirlpool and Maytag were competitors until three weeks ago, and he’s been on a “treadmill” ever since. “Going to all the locations, understanding all the implications of being competitive because ultimately, as the governor said, our challenge going forward is to make the new Whirlpool corporation as competitive as it can be,” Swift said.
Over 30,000 Americans are employed by Whirlpool today, and Swift said the challenge is to keep the company viable in a global market where competitors are employing cheaper labor in other countries to make appliances. Whirlpool has 26 manufacturing plants and Swift says the same criteria are used to evaluate the future of each facility. “Part of the formula includes some of the conversations that we’re having today, here, to really understand what potential benefits may exist,” Swift said. “We haven’t finished that evaluation.”
The governor said today’s meeting is the first in a push state officials and local city officials plan to make in the next two weeks to come up with an incentive package which insiders say includes tax breaks and other items, like state job training grants. “Companies like Whirlpool are faced with some very difficult decisions and they obviously have to take a look at the bottom line, as does the State of Iowa,” Vilsack said. “I want to assure Dave and his team that Iowa will put its best foot forward. We will do everything that we reasonably and possibly can to do what we can to preserve as many of the good paying jobs that have been part of our state for many, many years.”
Whirlpool told Maytag workers in early April that they’d announce a decision on their future within 60 days. Swift, the Whirlpool executive, said a state incentive package or incentives from the cities and counties in which Maytag operations are located won’t be the single deciding factor. Swift said the company is looking for a “total solution” that involves judging the infrastructure — the age of the plant — as well as logistics like shipping costs, in addition to the bottom line influence of wages.
Vilsack makes it clear wages here are high and if Whirlpool is to keep those Iowans on the payroll, it will have to be because the package of incentives is big enough. “To be very candid about this, a company like Whirlpool will do a calculation as to precisely what the cost of doing business is in various locations and then will challenge a state like Iowa if there is a cost differential to make up that differential,” Vilsack said. “The state then has a challenge of determining whether or not it is fiscally feasible or possible to make up the difference.”
Vilsack said it’s “fairly clear” Whirlpool executives are willing to listen, but not clear whether anything will come of the talks. “I don’t want to mislead anybody,” Vilsack said. “This is a very, very competitive circumstance and it may not be in the capacity of any government to make up that competitive difference.”
Eight state lawmakers from the Newton and Amana areas, including Representative Paul Bell of Newton, sat in on the meetings with the Whirlpool executives. Bell said it’ll be an uphill battle to keep the jobs, and the mood in Newton is mixed. Bell says some people are nervous, while others just want a decision to be made so the community can move on. “We have a lot of buildings that if they move, we’ll utilitize them for whatever purposes we can to attract other things that may be benefi for Newton,” Bell said. “I’m not going to rule out anything right now.”