By Susan Orr
EVANSVILLE — It's been a full year since Whirlpool's Evansville refrigerator production reached the end of the line, putting more than 1,000 people out of work.
In August 2009, the manufacturer announced plans to shut down the Evansville plant and move those jobs to a plant in Mexico. In March 2010, the plant eliminated its second shift, and on June 26 production ceased.
The plant shutdown cost some 1,200 employees, most of them hourly production workers, their jobs and brought uncertainty to the Evansville-area economy.
"When you take 1,000 manufacturing jobs out of any market — I don't care how large your market is — there's going to be some impact," said Greg Wathen, president and chief executive officer of the Economic Development Coalition of Southwest Indiana.
Whirlpool still maintains its Evansville refrigeration design center where 300 people — most of them engineers — work on designing new products.
Last year, the best anyone could offer was predictions on the economic impact of Whirlpool ending production. The economic impact is still difficult to pin down. Some parties were hurt significantly, others not at all. Some impacts are yet to be determined, and others will likely never be fully known.
The shutdown happened during a time of great challenges for the housing market, the automotive industry and other segments of the national economy. All of those factors affect each other, making it hard to quantify the exact local impact of the plant closure. "They (Whirlpool) contributed to a downturn in our economy, but it's difficult to say 'this' contributed to 'what,'" Wathen said. "There were just so many things going on at the same time."
Whirlpool declined to comment for this story other than to provide brief factual information: Whirlpool has nine U.S. plants with approximately 23,500 employees, including about 17,000 manufacturing employees; the company expects to retain its design center in Evansville.
Employment
What happened to that group of workers isn't easy to determine. Unemployment statistics from the U.S. Bureau of Labor Statistics don't provide much clarity.
Vanderburgh County had 8,321 unemployed residents in March 2010. In April — the earliest that the first wave of displaced workers would show up in the numbers — the number of unemployed dropped to 7,904. In July — when others who lost their jobs would have started showing up in the numbers — that number was 8,256.
There are numerous reasons why unemployment numbers don't line up exactly with reality. The numbers are based on sampling and surveys, not an actual count of the unemployed.
"I wouldn't put too much stock in these numbers reflecting all the unemployed workers," said Sudesh Mujumdar, chairman of the economics and marketing department at the University of Southern Indiana.
"You won't get every person who's unemployed showing up in that count."
Another factor, Mujumdar said, is all jobs are not created equal. He's talked to several people who took new jobs paying significantly less than they earned at Whirlpool.
This, Mujumdar said, echoes a national trend he described as the "hollowing-out of the middle class" — as people lose middle-income jobs, they may only be able to find lower paying jobs, moving them down the socio-economic scale.
"These are the things that get masked when looking only at the (unemployment) rates," Mujumdar said. "It has big implications for our social fabric."
Unemployment numbers also don't account for displaced workers who chose to retire or attend school full-time and are thus not currently looking for work. A significant portion of the Whirlpool workers fall into one of these categories.
Because their jobs were lost to foreign competition, the Whirlpool workers were eligible to receive Trade Adjustment Assistance. The program, popularly known as TAA, is a federal program that provides financial assistance for things like training, education and job-search expenses. The goal is to get displaced workers back into the workforce.
About 400 former Whirlpool workers are taking part in the TAA program and are enrolled in a training, certification or degree program, said Valerie Kroeger, communications director for the Indiana Department of Workforce Development.
Sandie Nelson, director of workforce and economic development at Ivy Tech Community College, said that during the recent spring semester, the school had 183 students who were receiving TAA funding. The majority of those were former Whirlpool workers, Nelson said.
Other Whirlpool workers attend Ivy Tech using Pell Grant money, a federal program provides funds to low-income college students.
Ivy Tech also offered eight-week sessions in basic math, English, computer skills and leadership training to 190 displaced workers, most of them through Whirlpool.
Some former Whirlpool workers may yet enroll in school, Nelson said — she's holding an information session in July for displaced workers interested in short-term training opportunities.
And there are certainly a number of students who enrolled at another school besides Ivy Tech or dropped out, Nelson said.
"It is hard data to hold down and grab onto."
But as a whole, Nelson said, the former Whirlpool workers have proven to be "very dedicated students" at Ivy Tech.
Many formed study groups and met to do schoolwork on campus in between classes.
"They came in the morning and would stay all day. They treated it like it was a job," Nelson said.
Others chose to leave the workforce altogether, Kroeger said.
Because Whirlpool's workforce tended to be older, Kroeger said, "They had a really high percentage who could retire."
Suppliers impacted differently
On one end of the scale is Fortis Plastics, which shut down its injection molding plant in Henderson, Ky. because of Whirlpool's departure. The Fortis closure in November, cost 60 employees their jobs.
Fortis could not be reached for this story. But in an interview last fall with The Gleaner, Henderson's daily newspaper, Fortis President and Chief Executive Officer Joe Mallak said Whirlpool represented a large percentage of Fortis' business, and after the local Whirlpool closure the company couldn't find enough new business to make up the difference.
Another local Whirlpool supplier had an entirely different outcome.
Evansville-based Master Manufacturing, which has 40 employees, makes parts for the appliance and the automotive industries.
Master Manufacturing is doing more business than ever with the appliance maker.
"We've actually grown our business with Whirlpool over the past year or two," said Tim Chancellor, vice president and general manager at Master Manufacturing.Whirlpool, Chancellor said, makes up about 25 to 30 percent of his company's business.
"They were our biggest customer, and they still are," Chancellor said.
The Evansville plant closure wasn't a big issue for Master Manufacturing, Chancellor said, because his company supplies Whirlpool plants in numerous locations, including Mexico.
"There was a time 20 years ago when it would have been maybe pretty devastating because we were pretty exclusive with this (Evansville) plant," Chancellor said. "We had diversified, even within Whirlpool, over the last four or five years."
Much of that diversification push, Chancellor said, came at the direction of company president and owner John Gannon.
Also working in Master Manufacturing's favor, Chancellor said, is that Whirlpool retained its product design center here.
If Whirlpool comes up with a new refrigerator design, that might affect the type of parts it needs from Master Manufacturing. So it's very convenient for the two companies to be located near each other.
"It's hard to beat a face-to-face meeting, especially when you're engineering something," Chancellor said.
Still awaiting the tax impact
Whirlpool's plant shutdown will also affect the tax rolls, though the full impact hasn't been seen.
Last year, Vanderburgh County Treasurer Rick Davis prepared a report for the Vanderburgh County Council estimating the tax impact of the Whirlpool plant closure.
Tax revenue from a manufacturing operation includes property taxes on a company's building and land; personal property taxes on the equipment inside the building; and county option income tax revenues, or COIT, paid by employees based on their earnings.
Whirlpool has shipped out or sold much of the equipment that had been in the plant, which reduces the taxable value of its personal property at the Evansville facility.
Davis wrote that in a "worst-case scenario" of all the plant's property being shipped out and all former Whirlpool workers remaining jobless, "Vanderburgh County taxpayers will have to make up $1.9 million in combined COIT and personal property tax totals due to Whirlpool's closing."
Because of the lag time built into the tax-collection schedule, Davis wrote, the full impact of the closure won't be felt until 2013.
In a recent phone interview, Davis said that worst-case scenario won't come to pass, because many of those workers have found other jobs and are paying COIT taxes on those earnings.
But, Davis said, if those jobs are lower paying than the Whirlpool jobs, the county receives less tax revenue than before.
Although the full tax implications of the closure are not yet evident, Davis said, overall "it was not a good thing."
Reasons for optimism
In April, The Kunkel Group announced it paid $2.9 million for 1.2 million square feet of the former Whirlpool plant, the majority of the property.
Whirlpool retained ownership of a portion of the property, and it is leasing back some of the space that Kunkel purchased.
In May, Evansville-based CrossPoint Polymer Technologies, a plastics company founded last year, announced it would lease about 110,000 square feet of the former Whirlpool plant from Kunkel.
Chuck Harper, vice president of The Kunkel Group Realty, said additional tenant announcements are pending soon.
"We have other tenants but we're not ready to make those announcements yet," Harper said.
The goal is to fill the space with manufacturing and warehousing tenants, Harper said.
Harper said the property was appealing to Kunkel because it's in good physical condition, in a desirable location near the Evansville Regional Airport and was available for a good price.
Also, Harper said, Kunkel has experience in buying existing buildings and repurposing them for new use. The company did this with the former Welborn Hospital in Downtown Evansville, which now houses office space and the Riverwalk Communities assisted living center; two former Downtown department stores that were converted to condominiums; and the old Knights of Columbus facility Downtown, which will be an independent living facility.
"Our ethos is to take properties that for whatever reason are not in use any more and try to put them back on the productive tax rolls," Harper said.
Economic study
Work is nearing completion on a regional economic study made possible by the Whirlpool plant closure.
Soon after the plant shutdown, the city of Evansville announced that it and the Evansville Regional Airport intended to purchase and develop the site into a product-design park. The Economic Development Coalition of Southwest Indiana secured a $231,482 federal grant to help fund those redevelopment plans, but when those plans fell through Wathen's group received permission to use that money for a study of the region's economic assets and growth possibilities.
Wathen said the study will likely be made public in August.
One major focus of the study, Wathen said, is looking how different parts of the regional economy could fit together. For instance, if a certain industry shows potential for local growth, are there sufficient resources for training new workers in that industry?
The study's findings, Wathen said could help bridge the skills gap that displaced workers may face in trying to find a new job.
"In this area, we still have to work on having better alignment between the opportunities that exist," Wathen said.
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