BAILING OUT: The Un-Americanization of an American ICON. UPDATE 4
Submitted by advisor on Fri, 10/23/2009 - 11:58pm.
Electrolux closed half its Webster City, IA in 2006, firing 700 workers, and shifting production to the needy people of Juarez, Mexico. Now Electrolux reports that the rest of the Webster plant will be shut down by spring 2011 along with another plant in Jefferson, IA, releasing an additional 850 workers from the hardship of continued employment:
This incident follows:
- A 2007 incident when 170 undocumented workers in Electrolux's Springfield, TN plant were fired and/or walked off their jobs when INS arrived.
- An October 2007 tip that the Electrolux Icon brand had ended its sourcing arrangement from US-made Dacor, instead shifting sourcing to Chinese-made NXR.
- The 2004 shutdown of Electrolux Greenville, MI refrigerator factory with the loss of 2700 jobs, all of which moved to Mexico
- The 2004 shutdown of the El Paso, TX vacuum cleaner factory with the loss of 850 jobs, all of which moved to Mexico.
- The 2003 shutdown of Electrolux Edison, NJ air conditioning factory with the loss of 1500 jobs, all of which moved overseas
Electrolux, a Swedish company, evidently has no interest in hiring Americans, and have bent over backwards to avoid hiring Americans.
Evidently we are not good enough to screw a washer together.
Over 31% of Electrolux global sales occur in North America, but US/Canadian "based" employment is only 14% of their total global employment, down from 25% in 2005. If history is any guide, a big chunk of that 14% have overstayed their visas, or are guest workers without invitation.
(electrolux sales/employment data)
Should North Americans be supporting a company which is following a strategy of full retreat? Firing its employees, not because of a drop in demand, but to squeeze as much from the North American economy as is legally possible.
Should Distributors, Dealers, or Consumers continue to support Electrolux / Frigidaire / Icon / Westinghouse / Gibson / Kelvinator when Mexican plants are being expanded to make room for Iowa jobs OR when sales are so mismatched to the domestic employment?
Is the time for neutrality over?
More information:
- Electrolux and immigration: See website of Lewis Loflin.
- On Kelly Ripa by ex-Electrolux employees.........this is a great read.
UPDATED OCTOBER 28, 2009
- Electrolux has a great quarter, and stocks climb 10%. The people of Iowa must be so proud as they prepare to send Electrolux into the world to find its fortune. Marketwatch Electrolux
- Attorney Steve Lombardi: Electrolux Iowa Plant Closings, Exporting America’s Middle Class
- Electrolux closes Spanish plant, effective 2011
Fending Off the China Onslaught !!!
Here's an article I came across which makes my point quite succinctly:
http://seekingalpha.com/article/169175-chinese-brands-moving-into-the-u-s-market
We are dealing with a different type of competitor these days, and into the future, so we need to learn as much about them as possible !!! The Chinese are willing to compromise their work-force, ecology, and world political standing to reach the "brass ring" they covet so dearly !!!
electrolux
I don't see a boycott of Electrolux ever really happening, nor do I think it a particularly good idea. Did our industry call for a boycott of GE when they opened the side by side plant in Mexico several years ago? At that time, they decided to build their top of the line Profile models there not the low end models. So obviously it was not just so GE could compete at the low end of the market. GE's CEO, Jeff Immelt, has often publicly stated that GE cannot build appliances in the US and still turn a profit on them. Sad to imagine and probably at least partially, a fault of GE and their unionized work force in Louisville. Other companies, Bosch, Sub Zero, Dacor etc seem to manage to manufacture here at a profit (although probably not in today's market). I think we need an industrial plan in this country in order to ensure a future for manufacturing domestically. As is often stated, we cannot all just make a living selling imported products to one another.
Clearly corporate taxes play a role in all this as do environmental laws. However, there is more to it than that because Germany also has strict environmental laws as well as restrictive employment regulations. Yet they export for billions more every month than they import----and they have no oil.
So if we decide to boycott Electrolux, we will have to boycott so many other companies as well. Don't sell GE gas ranges (made in Mexico), don't sell Whirlpool front load washers (made in Germany and Mexico), don't sell any microwaves (except for Sharp drawer models, which by the way are made in Tennessee by a Japanese company) etc. Well, you get the point.
Time to de-lux?
Your points are understood, and flesh out some of Bob's comments.
The question is, do we do something or do we do nothing? There are no angels out there, in fact there are no angels in here, but do we do nothing? We can't do everything, but we just might be able to do something, and Electrolux is a better "something" than most.
You asked: Is a it possible?
It depends on if we are mad as hell, and not taking it anymore? Are we fed up? More than just one guy in Lincoln, NE, fed up?
Feel free to email us directly with your thoughts at:
advisor@applianceadvisor.com
OK, but ...
... you have to consider the deeds (past and present)of others before you call just one manufacturer out ... what about:
(1) What about F/P buying DCS and doing absolutely nothing with it ???
(2) What about F/P cutting all those jobs in both distribution & service when they tried to move into the US ???
(3) What about F/P selling off 20% of themselves to China's Haier ???
...and just so you don't think I have a thing for F/P ...
(4) What about when Whirlpool bought Maytag and moved everything out of Wisconsin ???
Personally, I think that if Electrolux keeps doing what they're doing, they run the risk of pigeonholing themselves with the general public as being something the average consumer can't afford, so they don't even look @ it ... pretty much the way BSH is mismanaging Gaggeneau, Thermador, & Bosch ... the average person is of the opinion that " ... if you have ask 'how much', you can't afford it ..."
Remember when people said that Maytag was more money than anyone needed to spend ??? I do ... moved plenty of Whirlpool ever since "Duets" hit the market !!!
I think it is best, if you wish to be activist, to pick and choose your battles wisely and with long range forethought !!!
Elux boycott??
I still am troubled by the whole "boycott" concept. Electrolux, as we all know, is a Swedish company. First off, no one in the history of the world has ever been compelled to boycott anything Swedish! I mean, who is more neutral than the Swedes (ok, maybe the Swiss) and besides, boycotting Electrolux might mean that we would have to boycott Swedish blondes and none of us wants to do that..... Seriously, a Swedish company has no loyalty to, nor obligation to employ Americans. Don't you think our ire should be directed at American owned companies like Whirlpool, GE etc that are taking jobs out of the country? Maybe we should start with them?
1) As long as no money
1) As long as no money changes hands, you should be fine to continue, and free of any local law enforcement restrictions in your area.
2) They are Swedish headquartered but globally owned........but that is neither here nor there. They purchased a US company.......several US companies to be sure, and we have a right to expect fair treatment.
3) Is there a better idea out there? Our readers represent the manufacturing, distribution, dealer and to some extent the design side of the US appliance industry. We are all ears.
Facts to consider
The following facts might support a boyctott of Electrolux: The US is no longer the world's biggest economy. In 2007 the EU surpassed our 13.86 Trillion in goods & services with 14.4 Trillion.
1).. In 2008, the US had a trade deficit of 695.9 Billion, with 2.5 Trillion in Imports and 1.8 Trillion in exports.
2).. Oil related products contributed over half of the deficit with 453 B coming in and only 67 B going out.
3).. Consumer products also contributed to almost half of the deficit, with 481 B coming in and only 162 B going out.
4).. It was only with services ( royalties, fees, travel, entertainment, and financial) that we showed a surplus with 549 B going out compared to 405 B coming in.
Obviously, consumers will not stop buying products just because they are foreign made. And the government isn't going to step in with trade barriers. But dealers and distributors could limit the sales of these products by limiting distribution. Sure, consumers could still get Electrolux at Sears, Best Buy and Home Depot, but why add credibility to the brand at the dealer level? Dealer support still carries weight in consumer decisions.
No Quibble, but ...
... what do I do when a client comes to me and asks for the same Washer & Dryer "... that Regis girl uses ..." ??? That has happened more than once !!!
The problem is that, so far, Electrolux is a good brand and competes well with customers ... I'd certainly sell an Electrolux before an LG with their mildew problems !!!
Quibble Info
That depends upon the dealer and the floor salesperson, and how important a domestic appliance industry is to that person.
Does a salesguy suggest an appliance from "a company dedicated to building in the US"? Does it make sense for a salesguy to risk a sale when the customer came in the door asking for an Electrolux? Doesn't seem realistic, does it to you?
For all the other customers looking for direction, redirection is what salespeople do for a living.
Back in the day, when Hadco Distribution was in the strange position of distributing Thermador and Viking products. The accepted wisdom was that Thermador was only going out the door when it was specifically requested, otherwise Hadco was actively selling only Viking. Who are we to argue with Hadco?
Electrolux
Advisor, I was not aware of Electrolux history of employing illegals. Thank you for bringing this to light. I believe that any company engaging in this practice must be held accountable. Since our Federal Government has hung us out to dry on this issue and will not make even the smallest efforts to secure our borders this is an area where local law enforcement and news media can make a difference. Businesses must be prosecuted for violations. With the economy being what it is these are jobs we need. It does not appear Electrolux was held accountable for this. Why does it take exposure from the media to have action? Where was law enforcement? The move to Mexico concerns me as well. For different reasons. Our country needs to make an all out effort at keeping manufacters here. The United States currently has the 2nd highest combined corporate tax rate in the industrialized world (39.1). Only Japan is higher (slightly). Mexico is 11.1 points lower at 28%. We are also moving in a direction where we are putting more and more regulation on manufacturing. You have pointed out the EPA regs, Cap & Trade could be a reality soon. These all cost manufactures more money and makes their products more expensive. For companies like Electrolux, the US is just another market. There is no loyalty to our country or our citizens. This is a business decision. One I believe we are making too easy for too many companies. We now lose the taxes, the jobs and I am sure that the environmental impact of production in Mexico is far worse than in the United States. We build pretty clean here. We need to take a hard look at our corporate tax rates. We need to make sure that our regulations make sense and are reasonable. If we are going to keep our environment clean and regulate that end then we need to be sure our tax rate in lower than Mexico. 20% or there abouts makes sense to me. It puts us at the lower end of the scale and makes the regulation more affordable. It is truly sad the state of appliance manufacturing in this country and how much we have lost.
Agreed !!!
We've done it to ourselves and in doing so put ourselves @ a competitive disadvantage as well as making ourselves a debtor nation replete with the cause-and-effect of high unemployment and a diminution of moral and ethical standards !!!
Poor, poor, pitiful we !!!
Does Anyone Know ...
... if that plant was unionized ???
I hate to see American jobs lost as much as the next guy, but if those were union jobs, then there HAS to be some culpability there ... something not conducive to a good bottom line !!!
So, if ELECTROLUX is to be boycotted ... to whom should those customers be directed to instead ???
The Union Label
Though I disagree with the premise of the question, there are plenty of companies which are not unionized in the US. It always seems that companies have the unions they deserve. The companies with a history of poorly treating its employees are always the one's with a unionized workforce. What is the United States, or any nation, but a union of a sort. Strength through combined effort and shared sacrifice.
Were these Electrolux factories unionized? Might be since, Frigidaire was a General Motors brand.
To whom should customers be directed, when even the obvious brand choices are going overseas? Of course, any appliances from any brand with the "Made in the USA" label, of which we still have many. Like a unionized workforce, a consumerforce working with a combined effort is the best defense against being mis-treated by manufacturers, and defending our fellow Americans in Iowa during this economic depression.
I would hope that every American would buy products made by Americans.
I Fully Understand ...
... that unions had a very necessary time and place in the history of our nation, but I maintain that they wield way too much power & and routinely misuse their presence by requiring their membership to blindly back candidates and other issues ... one only needs to look @ GM for a upsetting array of moral and ethical requirements which eventually placed a stranglehold on the company's life !!!
I cringe when I hear news reports that depict situations where unions "force" themselves upon workers companies anywhere from Wal-Mart to UPS have had to deal with this !!! THAT'S the real reason you can't find someone who can say they are truly "Made in America" !!!
The bottom line is that it's GOVERNMENT's responsibility to monitor safety violations and that should be extended to mistreatments ... why allow union leaders to go unchecked ... it is obvious that they are largely responsible for manufacturers going overseas, where labour costs are not artificially inflated by ridiculously high salaries, benefits, and union dues !!!
The reality is that if unions cause higher labour costs to manufacturers, they either pass it and and we all have to pay more for what we buy, or they hold the line by going overseas to save on labour !!! Proof positive are the companies who flourish in the southern "right-to-work" states - which make unions moot !!!
I know it sounds odd, or even daft, but we've done it to ourselves ... think of it, when they had Congressional hearings on the auto companies, the Big 3 were invited, but why was the UAW also allowed ??? Simple ... because they forced themselves on Congress using their political swagger they obtained by support of candidates ... that doesn't sound like protecting workers to me !!!
If I ever owned a retail business, each of my employees would not be employees - they'd be private contractors, responsible for their own benefits !!!
Is is really possible that
Is is really possible that unionization is the only reason that these factories are being closed? This seems more like an ax to grind, than deep thinking. Textiles moved from Northeast to the south, and from the south to points East, Far East. Where was the union involvement there? This was simply greed un-tempered by regulation. Did brown goods leave because of unions? Plastic toys, fruit of the loom underwear, Levi's, kitchen and bathroom hardware, printing, cars? Germany has a huge industrial economy all with unions that would shame our own for the benefits they have won their members.
Salaries are higher in the US, because any work worth doing should come with a survivable wage. Unions are a big reason, maybe only reason we have (had) a large middle class, and not work villiages of open sewers through tin shanties. The problem is not that unions have pushed them out. The problem is that regulation has not kept them out, giving domestic and foreign competitors no choice but to produce domestically if they wish to sell domestically.
UAW was in Washington as they would be required to give back from a signed contracts.
Outlived Their Usefulness ...
I don't deny your historical perspective but the "Right-to-Work" states have proven my point that unions have outlived their usefulness and are now more detrimental to maintaining American jobs !!!
I was in Austin, Texas right after GW started having his tiff with Vincente Fernandez ... I asked the vendor I was visiting about illegal aliens and he told me that we northerners " ... don't get it ..." as without illegal aliens the whole agrarian economy would hit rock bottom within 6-8 weeks !!! It is because they do the work we are too proud to do ... and we've taught our kids to think the same way !!! It's part of the "Big Lie" Kennedy started that every kid has the right to go to college, thus creating the thinking that menial, physical labour is beneath them !!! So why not create a scenario where we can embrace these illegals, tax them, require that they get a modicum of education, learn to speak English, and in doing so counter the economic millstone they are on society !!! It would create a workforce to make us competitive with those countries we are currently exporting manufacturing jobs to !!!
Regarding the UAW ... if you use your logic, then all the secondary suppliers who supply the auto industry should have been there too !!! The UAW has imposed itself on too much of American business ... usually to the detriment of both the business and the consumer ... do you actually think Wal-Mart could stay as competitive if they allowed the unions ???
Back on point about Appliances ... so, if Electrolux is the new Beelzebub, to whom should we turn ??? My best guess (albeit a bit of a rationalization) is to put your money where your mouth is and go with Whirlpool, who offers the best variety and allows you to make some bucks on the side as their stock is doing very well !!!
Dear Bob,I am worred that
Dear Bob,
I am worred that you are over-using your "!" and "?" keys. Try to spread your anger to the % or & or $ keys. It's better for your fingers too?
I believe that we should have a temporary worker program for agriculture, or significant import duties to raise domestic farm income.
The United States does not have a developed system of regional technical schools, technical internships, Practikants, and apprenticeships as they do in Europe and particularly in Germany.
As for converting un-documented workers to citizenship. Seems like a culture that cannot support itself has problems that need fixing. Your fix, is short term indeed. Beyond that, I don't agree with the contention that people will not work, though it is true people will not work for the salaries that are found acceptable in Mexico, China, and Egypt. Should our workers be working at $3.00 a day, or should we be limiting the amount of products that are produced in $3 a day countries that end up here?
Is it more important that every American have the right to the cheapest products manufacturable on Earth, or that all Americans are still working? Was life so bad in the 1950's and 1960's when we still made everything, yet paid much more for it than we do today?
Your final questions. Whirlpool is fine, I agree, as are a few other domestic nameplates, but let me suggest something else.
Americans have spent the last several decades upgrading too quickly, stepping up to the next house, kitchen, and car long before they have failed to perform. I understand that 1/2 of appliance purchases are the replacement of a failed unit, while the other 1/2 reflects something else, style perhaps, kitchen upgrades. This needs to slow down. More money saved, more products repaired, purchases in cash not credit, a gentle reduction in the velocity of the economy reflecting sanity in the land. These are the factors which allow for a domestic manufacturing economy.
Nothing to It !!!
Please don't take anything by my triplex-punctuation predilections, it emanates from nothing more than a personal style evolved from too many e-mail communications ...
Our workers should be working for more realistic salaries commensurate with skills and not longevity, ability to amass sick time, and ridiculous overtime schemes ... Again, I look to union shops like the UAW owns who wants salaries and benefits which are outside the realm of reality ...
UPS drivers will tell you much has changed since they unionized ... and much not to their liking !!!
... and again I look to what the want to do to Wal-Mart ... if they unionize, then all prices will need to rise ... which raises the cost of living of everyone !!!
Regarding the buying habits which developed in the previous economy ... you know, the one that essentially ended on 9-15-2008 ... something tells me with our banking and finance system being tightened up, more and more appliances will be squeezed closer to their demise rather than simple obsolescence !!! People will wait until that existing washer dies, rather than trade it in for a new fangled "green" machine with pre-treatment, steam, & fancy lights ... simply because we need to step backward and circle-the-wagons to survive this economy ... and it's not going to be overnight !!!