OXFORD — When Whirlpool Corp. (NYSE:WHR) execs sat down to determine the company’s global restructuring plan — which one of its four North America cooking appliance manufacturing plants should be shut down and which two should be expanded — Oxford was a question mark.
Al Holaday, vice president for Whirlpool’s North American manufacturing operations in Benton Harbor, Mich., had already stated, “The best alternative to reduce excess capacity would be to consolidate production of cooking products from our current four facilities into three. This will allow Whirlpool to streamline our operations, improve our capacity utilization, reduce product overlap between plants, and meet future production requirements for consumers.”
After a yearlong assessment, Whirlpool decided to close its Montgomery facility, located in Quebec, Canada, which produces gas and electric ranges and currently employs approximately 500 people. It was also determined that Vitromatic, the company’s joint venture in Celaya, Mexico, which also produces freestanding ranges and employs 2,200 people, would remain status quo.
The logical choices for expansion: the Oxford facility, which produces built-in gas and electric cooking products and currently employs 600 people, and the plant in Tulsa, Okla., which produces freestanding gas and electric ranges and currently employs 1,500 people, said Whirlpool spokesman Tom Kline.
“Both plants gave us the ability to expand,” Kline said.
Double-digit sales increases for two consecutive years and existing capacity at the Oxford plant were important factors, said plant manager Jerry Redmond.
“But the extreme amount of support we received from everyone in Mississippi and in Oxford helped clinch the deal,” he said. “So many people reached out to work on the project, laying out different options and incentives to make this happen.”
By 2004, Whirlpool will transfer additional cooking product production to its manufacturing facilities in Oxford and Tulsa. About 150 jobs will be added at the Oxford facility and 200 jobs in Tulsa. The decision was announced two years in advance to make the transition as smooth as possible, Holaday said.
“Obviously, we’re elated,” said MDA spokesperson Sherry Vance. “Whirlpool is a fine corporate citizen for the state and Mississippi and is a tremendous organization. When we got news about the expansion from the company, we were so pleased.”
Max Hipp, executive director of the Oxford-Lafayette County Economic Development Foundation and project facilitator, said landing the deal took total teamwork.
“There were so many players involved — the Mississippi Development Authority, Tennessee Valley Authority, Three Rivers Planning & Development District, University of Mississippi, Lafayette County Board of Supervisors and the City of Oxford,” Hipp said. “Everyone had to work together, and did so willingly, for the good of the city, county and state.”
To make the $10-million, 140,000-square-foot expansion attractive, MDA provided financing and tax exemption plans and channeled $550,000 in Community Development Block Grants to cover the cost of infrastructure projects. Three Rivers Planning & Development agreed to administer the CDBGs; TVA provided a plan optimizing electrical rates and other incentives; Ole Miss granted the company a 1,600-foot easement down an old railroad bed; and the city agreed to relocate a sewer pump station and three-phase power line that were directly in the path of the expansion. The city also agreed to build a new road to the plant.
“Our role in projects of this nature is often totally dependent on the cooperation and teamwork of other parties, and credit for this does not belong in any one court,” said Jeff Dukes, director of MDA’s existing industry and business division, who helped structure the deal. “Whirlpool was willing to give us new consideration and look at what we were in a position to help them do. Max Hipp and the locals in Oxford went the extra mile to do what needed to be done and we were just a contributor.”
Engineering work on the expansion site has already begun, said Redmond.
“We anticipate that will take three or four months,” he said. “We’ll start dirt work while the utilities are being moved and anticipate a formal groundbreaking ceremony the first part of the third quarter.”
Next year, equipment will begin rolling in, including large punch presses, production line equipment, and possibly a new powder-coated paint system, Redmond said.
“When complete, the expansion will represent a 50% increase in physical capacity and production should go up around 25%,” he said.
Whirlpool’s timing couldn’t be better. Emerson Electric recently announced it was closing its 500-person plant in Oxford. The plant, which was established in 1970 and manufactures fractional HP electric motors, will probably close by the end of the year, Hipp said.
“Whirlpool’s expansion will take up some of the loss we’ve experienced this year,” Hipp said. “Whirlpool has added over 100 people in the last year and a half. That’s taken up some slack. We haven’t had major hits since Caterpillar in 1997. Some have scaled back a little bit because of the economy. For now, Emerson is in the midst of building up their inventory — they have a big demand for parts — and it’s possible it could lead slightly to 2003 before it formally closes.”
With little difference in production between the two manufacturers, Emerson workers would be a good fit for Whirlpool when expansion employees are hired.
“We haven’t worked out a specific plan for Emerson’s employees, but it’s logical to assume that a fair number of their employees would probably be absorbed in the expansion,” Redmond said.
Only a few engineers are likely to transfer to Mississippi from Whirlpool’s Canadian plant, Redmond said
“The plant is in a tiny, close knit community about four hours north of Maine, so I doubt anyone would want to leave,” he said.
Even though Whirlpool has utilized Northwest Community College for workforce training in the past, the company now hires predominantly through Ablest Staffing Service in Oxford, which provides some training; Whirlpool provides on-the-job training.
“Northwest helped us get started and now we are able to fill our own needs,” Redmond said. “The community college has also given us tremendous support.”
Contact MBJ contributing writer Lynne W. Jeter at (800) 993-3392 or email@example.com</a.