“We are not providing site-specific numbers,” according to Kris Vernier, senior manager of Global Public and Media Relations for the world’s largest appliance manufacturer which is headquartered in Benton Harbor, Mich.
Vernier, who responded late Friday to Cleveland Daily Banner inquiries from earlier in the day, said although the planned workforce reduction’s effects on specific sites are not being disclosed, she did confirm the cutbacks will occur through the end of 2013.
Whirlpool operates three functions in Cleveland — the factory, which employs some 1,500 workers and is recognized as Whirlpool Cleveland Division; the call center on 20th Street which has about 500 employees (Whirlpool Cleveland Customer eXperience Center); and the engineering function (Cleveland Technology Center) which had previously employed about 90.
Just a few weeks ago, Cleveland tech center workers learned their operation was being consolidated with the Edgewater Technology Center in St. Joseph, Mich., the twin city to Benton Harbor, leaving an eventual local technology workforce of about 30 people.
In its announcement Friday, Whirlpool said the planned job cuts represent about 10 percent of the total workforce in the North America and Europe regions. The corporation plans to make the reductions using the following steps:
n Reduction of about 1,200 salaried positions;
n Closure of the refrigeration manufacturing facility in Fort Smith, Ark., by mid-2012, impacting some 1,800 jobs there.
n Relocation of dishwasher production from Neunkirchen, Germany, to Poland in January 2012; and
n Additional organizational efficiency actions in North America and Europe.
The Fort Smith plant shutdown will impact directly 884 hourly workers and 90 salaried employees. The plant already had 800 workers on layoff that were subject to recall.
Whirlpool anticipates the workforce reduction will save $400 million by the end of 2013.
Soft consumer demand and higher materials costs are to blame for the reductions, according to published reports from The Associated Press. In its quarterly earnings report, Whirlpool cut its sales outlook and reported third-quarter results that missed expectations — caused by higher costs and a slowdown in emerging markets, the AP report stated.
Like other appliance makers, Whirlpool — whose brands also include Maytag and KitchenAid — has struggled since the start of the ongoing three-year recession. Rising materials costs such as steel and copper are adding to the fiscal dilemma.
According to the AP report, based on information in the quarterly financials, Whirlpool has raised prices to combat higher costs, but demand for big-ticket items like refrigerators and washing machines remains tight. Competitive pressures from rivals’ product discounts are also contributing to the company’s volume slowdown.
Published reports indicate it’s not a problem exclusive to Whirlpool. Earlier last week, Swedish appliance maker Electrolux reported that its third-quarter net income fell 39 percent and the company cut its forecast for product demand in North America and Europe for the remainder of the year.
“Our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs,” Whirlpool CEO Jeff Fettig reported.
Whirlpool now projects 2011 net income will be $4.75 to $5.25 per share. Prior guidance given to Wall Street was that net income would be at the low end of a range between $7.25 and $8.25 per share.
Locally, Whirlpool is nearing the construction completion of its new $120 million, 1-million-square-foot plant in Cleveland which will manufacture premium cooking products. The new facility will replace the century-old manufacturing complex on King Edward Avenue.
Production startup at the new structure remains on track for sometime during the first quarter of 2012.
Including all three major functions, Whirlpool employs about 2,000 workers in Cleveland.