Electrolux to close plant in Greenville

WoodTV ^ | 01/16/2004

[RockChucker]

Electrolux employees began arriving at the plant well before the scheduled announcement to learn the fate of 2,700 Greenville jobs. This morning at 7:30 those employees learned that Electrolux will close its Greenville plant.

Last Friday was to be the day, but the deadline was postponed one week to allow talks to continue between the company, the city and the union. This morning at 7:00 a.m. Electrolux was scheduled to make the announcement; however, company officials delayed that announcement until 7:30 a.m. When that announcement finally did come, it wasn't what anyone in Greenville wanted to hear.

That's just the city of Grand Rapids. Ice Mountain water bottleing plant, the largest in North America, will likely be shutting down... and they just built the plant 1 year ago.

Electrolux to close plant in Greenville

In a prepared release, Electrolux announced that some products manufactured in Greenville will be moved to a plant in Anderson, South Carolina, while other lines will be moved to a plant in Mexico. In the meanwhile, operations in Greenville will continue into 2005.

The company says that it carefully considered the city's proposal to keep the plant in Greenville, but that in order to remain competitive it must move operations to Mexico.

Electrolux says it lost 38 percent of its profits in the third quarter and it can save $81 million a year by shuffling off to Mexico.

For Greenville, this means the loss of 2,700 jobs and $437,000. That's about a 20 percent blow to its tax base. For the region, the overall economic impact each year will affect the service industry and Electrolux suppliers, amounting to $243 million. The numbers are daunting especially for Electrolux employees

[looscnnn]

"As to the residents unwillingness to work for $4/hour,"

How much is minimum wage again?

"But that would not have been possible without the U.S. having a stance toward open trade borders."

What does open trade borders have to do with a foriegn company buying a plant in the US? Nothing, that happened even before the trade borders were opened.

"the answer is to retrain the workers"

Retrain the to do what? There are only a limited number of service related jobs that can be created. If you look at the number of doctors that are not American, you will notice that that number has increased. A job is a job, they should be kept here. When do we say enough to them being sent overseas? When the number of employed and available jobs is over whelmingly less that the number of people unemployed? How about trying to avoid that from happening?

[em2vn]

"Unions fight efficiency, therefore inherintly they bring harm to the value of labor, yet they are allowed to hold the producers hostage and receive blackmail payments in the form of falsly inflated wages."
Bull s*%t smell better than this claim. Replacement workers are fully able to be called in during a strike or the more likely occurrence, a lock out.
In the matter of Disney, it is clear with the current manner in which BOAs are constituted that a CEO is insulated from nearly everything except criminal action or gross malfeacanse.
Your example of Ford motor company is partially correct. Henry did as you said only after attempts on Walter Ruther's life. Attacks upon Ruther and union members by private detectives and local police as well as state police and Nation Guardsmen.
I think Henry did indeed show business genius after the fact and after the loss innocent life.
I think you are experiencing crano-rectal inversion if you think I am against the American Captalist system. I ain't perfect but it is the best system ever devised. I am against kicking the fetters off of business so that it is free to do as it wishes without concern for national and societal repercussions.

[CSM]

"Replacement workers are fully able to be called in during a strike or the more likely occurrence, a lock out."

Sure, during those times only. However, if you hire a permanent employee you are required to pay them the union dictated wage. The individual hired and the company are not allowed to enter into their own agreement of "fair" pay. Therefore, it is artificially inflated. The employee then offers payment to the union for that extortion. That would be the blackmail portion.

How can you support kicking the fetters off of business, while supporting the unions?

[technochick99]

Keep it up unions--pretty soon they will have to move their union headquarters to Mexico too.

We hear all about union greed, never 'management greed'. I'm afraid that both exist.

While I am no fan of unions, pls consider the possibility that management times these things to coincide with union contracts being up for renegotiation. I know someone in upper mid-level management at an employer in a traditionally protected and union industry. According to them, there are plans to close a big location. However, the word from on high is that they will wait until the inevitable fight with the union to close it down. Regardless of what happens, they plan on closing and are hoping to use the union as the scapegoat.

This makes me so sick! They gain nothing by doing this, at least nothing that will be remembered in 2 years....

[looscnnn]

They would, but the consumer will not see a price drop.

[looscnnn]

"At what point is a person over paid? Is it when someone makes more per hour than the person posting; is it when a lineman makes twenty four dollars an hour or is it when Michael Isner makes over two hundred million dollars in a year?"

Both.

[looscnnn]

"Does that happen? I don't know based on true evidence, but I suspect it does, and human nature would suggest it does regularly."

It does, think about the fact that in auto plants in MI you HAVE to join the union to work there. Workers are not allowed to be non-union. Plus the fact that they can strike if they do not get their demands met. MI is not a right to work state.

[Orbiting_Rosie's_Head]

In addition, any public company needs to continue to show profits and pay dividends or you will not have shareholders. Without shareholders you will never be able to remain competitive and you will end up losing the company. So yes, these profits benefit all investors, many employees are investors. However, most union members don't think they get compensated unless they see it on the check stub.

An extra $100 per year in dividends to a laid-off machinist doesn't compare to the loss of a $35,000/year job, sorry. And it won't salve any wounds that will still be smarting inside the voting booth, either. Like it or not, these happenings bode ill for conservatism in America.

Does the company have a real problem? Yes. But the solution is to stick it out and hammer congress for a more business-friendly environment in the US, not cut and run with the jobs. Running away with the jobs is a capitulation to liberalism, which only fuels it more.

[looscnnn]

"Are the high tech people, teachers, doctors and lawyers the only ones that are allowed to make a comfortable wage?"

First, I am in the IT field and I do not make a comfortable wage. I am making more now than I have before, but I could make more if there were more private sector jobs for what I do.

Second, these are jobs that are more specialized and require more education than to turn a screw, etc. I could easily make the transition to work on an assembly line, can you easily make the transition to work with Citrix servers, Unix, etc.?

I come from a family that are/were union workers and they agree with my assessment of unions. They were good in the beginning, but have corrupted the employment market in MI when it comes to the auto industry.

[looscnnn]

But I bet he never imagined that they would also go to China.

[rdb3]

An asinine and insipid comment...

I love free speech.

You support unions and have espoused class warfare rhetoric.

I disdain both.

[looscnnn]

"the other costs in the price are increasing. These costs have been increasing for years and the general customer is not willing to pay more for the product."

What other costs is that? Shipping? They can get competitive bidding going for shipping and keep the price down if not reduce it.

[CSM]

"An extra $100 per year in dividends to a laid-off machinist doesn't compare to the loss of a $35,000/year job, sorry. And it won't salve any wounds that will still be smarting inside the voting booth, either. Like it or not, these happenings bode ill for conservatism in America."

That $35K a year job may or may not be worth that to the employer. That job may or may not even be necessary. I don't think many manufacturing jobs exist that are unionized and they are only paying $17.85 an hour. Maybe if the machinist were really willing to work for $35K a year, the company would not need to move. If the company isn't able to pay the $100 per year, then they won't be able to pay any wage to any employee. They would be gone anyway.

So, you say that we should support liberal ideas and restrict businesses in order to protect republican votes? That makes no sense to me, I say let people see the benefits of booming business and they will see that our philosophy is superior to the restricters.

"Does the company have a real problem? Yes. But the solution is to stick it out and hammer congress for a more business-friendly environment in the US, not cut and run with the jobs. Running away with the jobs is a capitulation to liberalism, which only fuels it more."

I agree that companies have problems beyond unions. Unions are not 100% to blame for moving manufacturing to lower labor cost areas. Add to much government shackling, to many regulations and in many cases overall inefficincies in the business model and we have a 4 pronged problem. This discussion was about unions, so I am discussing unions. If I get a chance to discuss the other items I will do so.

I am supportive of some government meddling, just enough to make sure that all foriegn markets represent a "true" cost to business. In other words, if a foriegn government subsidizes an industry, we should have tarrifs to balance that subsidy. However, I don't consider low labor costs to be a subsidy.

How long should a company "stick it out"? Should they wait until they are already losing money, until they have lost $100K how about a mil, how about 10 mil? At which point do we say it is acceptable for them to change their location?

[CSM]

"What other costs is that? Shipping? They can get competitive bidding going for shipping and keep the price down if not reduce it."

Nope, have you ever heard of the Teamsters? Did you hear about the dock strikes last year? The costs I am talking about are the rest of the elements that are in the piece price. Overhead, Capitol, Raw Material, BOM costs, etc.

BTW, dealing with the unions involved in transportation is worse than dealing with the mob!

[looscnnn]

Teamsters have no say in competitive bidding between say Consolidated Freight, Airborne, FedEx, UPS, etc. initiated by a company.

Raw material prices should not go up due to most sourcing is from overseas.

How can the cost of capitol go up for a business?

[CSM]

Capitol is both money and equipment. Changes in tax codes can affect depreciation, cost to purchase equipment increase, insurance premiums rise, etc.

[looscnnn]

The cost of electronics and other things have gone down, not up. Case in point, computers today are cheaper than they were when they first came out. As I recall, the rates for depreciation have gotten better. They can use competition, like HP & Dell, to keep their prices of equipment down.

I do not think that they get that depreciation on equipment that is in a factory outside of this country, do they?

There is nothing that can be done to keep premiums from rising short of tort reform, etc. Again, shopping around will help though.

[CSM]

The cost of electronics has gone down with the movement to more efficient areas of production. Wasn't the point that the customer doesn't see the price reduction? You are showing that when possible the price will go down.

Other raw materials have gone up. Other parts have gone up. The cost of equipment is highly dependant on the application. Tooling has gone up, capitol equipment is up (presses/robots/weld cells), yes competition can help keep the costs down, but only when you don't have specialized applications.

No, depreciation can not be taken on equipment outside of the country. Of course they aren't paying property tax on it either. That is part of what drove them out of the country.

A strong economy and a strong market will help keep insurance premiums from skyrocketing. The biggest reason for the large increases these last couple of years has been that the insurance companies are losing to much value in their portfolio.

[looscnnn]

No the cost going down is due to competition, without it the price would not have gone down.

Robots are cheaper now than ever, tooling and presses are also. These are areas that competition and advancement is driving the prices down. I have no idea on weld cells. There are very few specialized applications that do not have competition for equipment producers.

There are places in the US where there are no property taxes, if they moved there instead of overseas they would get depreciation and still not pay property taxes.

The main problem for insurance companies is frivolous lawsuits, just ask doctors and anyone in the health care field. Sure the main increases are in those areas most sued, but they also spread the cost across the board.

[CSM]

Where is electronic componetry manufactured? (Hint: Overseas) You are showing that when the costs do go down the savings is passed on to the customer. Of course that is canceled if the total cost is unchanged.

How about the cheaper robots, dies and fixtures? Where are presses manufactured? (Hint: Overseas) Try comparing the cost to purchase any of this equipment manufactured in the US vs. any other market. You would be shocked at the cost difference.

Depreciation is the formula you use when determining the amount of value that remains on the property to tax. Without property tax you don't need depreciation.

Where are the locations in the US that don't have property tax? (I really don't know and I am interested.)

I never claimed that frivolous law suits were not a "problem" for insurance companies. What I did say is that the single biggest reason for the doubling and tripling in the premiums was due to the market losses.

If the market is strong, then everybody wins. The best way to make a market strong is to unbridle the business, remove government regulations, lower taxes and address unions.