Discussion Questions to consider when reading this article:
- What are the major costs that should be considered when locating a plant?
- How might these costs change over time?
- What is an appropriate planning horizon for these decisions?
- What factors, other than cost, should be considered?
Whirlpool Shifts Some Production to U.S. From Mexico
Move to Add 80-100 Jobs at Washing-Machine Maker’s Ohio Plant
Dec. 19, 2013 3:39 p.m. ET
Whirlpool will shift some production from Monterrey, Mexico, to its large washing-machine factory in Clyde, Ohio, shown. Bloomberg News
Whirlpool Corp. is moving some of its washing-machine production to a plant in Clyde, Ohio, from one in Monterrey, Mexico, executives of the home-appliance maker said.
The shift—another sign of the trend for U.S. manufacturers to bring back some of their production from abroad—will create 80 to 100 jobs at the Clyde plant, which currently employs about 3,300 people and is the company’s biggest washing-machine factory, said Jeff Durham, a vice president in charge of U.S. manufacturing for the Benton Harbor, Mich.-based company.
Wages for production workers in Clyde, typically around $18 to $19 an hour, are roughly five times higher than in Monterrey. But Mr. Durham said the shift should lower costs overall. The Clyde plant is more automated and electricity costs are much lower than in Monterrey, he said. Whirlpool also expects to save on transportation because the products won’t have to be shipped across a border before going into the company’s North American distribution network.
The products involved in the shift are front-loading washers of the type used by laundromats and certain residential washers sold in Canada. The Monterrey plant, which employs about 500, will increase production of washing machines for the Mexican market and won’t need to reduce its workforce, Mr. Durham said. Like many other companies, Whirlpool is trying to make products closer to where it sells them. That reduces the time needed to respond to changes in demand.
Since the beginning of 2010, companies have created more than 80,000 manufacturing jobs by moving production to the U.S. from foreign countries, estimated Harry Moser, president of the Reshoring Initiative, a nonprofit that advocates such shifts. The U.S. continues to lose other manufacturing jobs to offshore plants, but those losses now are being offset by inflows, he said, adding: “We’ve stopped the bleeding.”
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