One Manufacturing Giant Creates Winners And Losers Residents in Memphis, Tenn., are thrilled that Swedish appliance giant Electrolux is opening a new factory there this year. The company plans to employ 1,200 people at the new, high-tech facility. But in Webster, Iowa, an Electrolux plant closure in 2011 has left the local economy reeling.
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One Manufacturing Giant Creates Winners And Losers

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One Manufacturing Giant Creates Winners And Losers

One Manufacturing Giant Creates Winners And Losers

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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.


And I'm Audie Cornish.

The United States lost close to six million manufacturing jobs in the decade from 2000 to 2009. Now those jobs are coming back slowly and President Obama wants to keep up the momentum.

PRESIDENT BARACK OBAMA: I believe in manufacturing.


OBAMA: I think it makes our country stronger.


CORNISH: Still, even in a recovery there are winners and losers, and the same company can create both. NPR's Andres Hsu has this story about a global manufacturer that's viewed as either a hero or a villain, depending on where you live.

ANDREA HSU, BYLINE: The company is the Swedish appliance maker Electrolux. It made its name in vacuum cleaners and today makes all sorts of appliances. It owns Frigidaire and also makes Kenmore products. Electrolux is the second largest appliance manufacturer in the world, behind Whirlpool.

JACK TRUONG: This is the latest innovation that we are bringing to the marketplace.

HSU: Jack Truong is CEO of Electrolux Major Appliances, North America. He shows off the Frigidaire Gallery Symmetry Oven. It's two ovens...

TRUONG: Large enough to cook two 28-pound turkeys at the same time.

HSU: Or Truong says, steaks in one, cookies in the other.

Soon, this and other premium ovens and stoves will be made in a brand new factory in Memphis. Two years ago, this spot was a field of soybeans. Today, it's Electrolux's most high tech and energy efficient plant in North America.


HSU: Project director Adam Roberts takes me past the stamping presses to custom-built lines of robots that will bend and weld steel into oven cavities.

ADAM ROBERTS: This is what comes off this high tech line. This is the inside of an oven.

HSU: The plan is to eventually employ about 1,200 workers, mostly in the assembly area.

ROBERTS: In the very near future this will be full of people.

HSU: Electrolux will shutdown production at a plant outside Montreal. Twelve hundred people there will lose their jobs. The company will go from paying more than $18 an hour to roughly a third less in this non-union plant. The move is part of a cost-cutting that Electrolux began in 2004. Jobs were shuffled from Sweden to Hungary, from England to Poland, from Denmark to Thailand.

Memphis has come out a winner in this restructuring. And Memphis Mayor A.C. Wharton is delighted.

MAYOR A.C. WHARTON: We're actually going back to the future here. This used to be a heavy manufacturing city.

HSU: Now, Mayor Wharton and other officials are trying to reclaim some of that past, and they're using huge sums of money to do it. In 2011, the newspaper, the Commercial Appeal, calculated that to land Electrolux, Memphis, Shelby County and the state of Tennessee together came up with subsidies of close to $190 million.

Mark Herbison is with the Greater Memphis Chamber. He says it's the largest incentive package he's ever been involved with.

MARK HERBISON: We understood from the beginning that there was a very large hundred-plus-million dollar offer on the table from Mexico, and that we were going to have to be in the ballpark in order to be able to compete for this one.

HSU: He says, the state stepped up, motivated in part by the fact that Tennessee already had an Electrolux plant outside Nashville, also making ovens and stoves. The fear was, if the project went to Mexico, that plant might go, too. And it wasn't just a theory. Communities elsewhere in the U.S. had already lost Electrolux jobs to Mexico.

I went to visit one of them, Webster City, Iowa, population 8,000.


HSU: After a late winter storm, Main Street is quiet. Some shops have yet to open for the day, others are closed for good. The movie theater marquee is blank - it shut down last month.


HSU: Inside TrueValue hardware, Pam Fitzgibbon takes a moment away from the cash register. She glances out the back door at the shuttered plant where she assembled washers and dryers for Electrolux.

PAM FITZGIBBON: Twenty-six years, yup. Hard to drive by it.

HSU: And soon she won't have to. Webster City has just issued a demolition permit.

FITZGIBBON: It's an old factory. It was in bad shape, they just gutted it. It's, I'm sure, a home for raccoons and possums and all kinds of things right now.

HSU: The plant once employed more than 2,000 Iowans. Production shut down two years ago and Webster City became yet another place in America subjected to upheaval, as the main employer in town sought efficiency and profit elsewhere.

Jerry Kloberdanz spent 32 years at the plant. His first job was throwing boxes on washers and dryers. His last job was in maintenance. Seven of his nine siblings had also worked there.

JERRY KLOBERDANZ: I actually thought that it was a death sentence for me when I lost my job, 'cause I didn't figure I'd ever get another job again. And the wages were better than any place else probably within 30-40 miles. The benefits were very good. I was making 22.17 when they closed the plant.

HSU: Not enough to get rich, he says, but enough to do things like buy a new car, put braces on the kids' teeth, and send them to college. Now with federal retraining funds, he's enrolled in community college studying geographic information systems. He plans on staying put in Webster City in a home filled with reminders of the past.

KLOBERDANZ: The stove is Kenmore but made by Electrolux. And the refrigerator is an Electrolux - Frigidaire. I have an Electrolux freezer. I've got an Electrolux washer and dryer.

HSU: But ask Jerry Kloberdanz if he'd buy an Electrolux product today, and he almost laughs.

KLOBERDANZ: No. No, I would not buy an Electrolux product. No, I wouldn't.


KLOBERDANZ: No, I'm not going to be putting money in their pocket. They took it all out of mine.

HSU: He believes the company will go wherever wages are lowest and incentives are highest. A couple years ago, that place was Mexico. Today, it may be Memphis. But for those looking for work at the new plant, Kloberdanz has this advice...

KLOBERDANZ: Don't plan on retiring there, 'cause I don't think they'll stay there, either.

HSU: In fact, Electrolux has given Memphis no guarantee of how long it'll stay.

TRUONG: I can't really speculate on the time, you know, (unintelligible) it's about forever or anything like that.

HSU: But North America CEO Jack Truong says Electrolux is committed to working with Memphis to build success so that it can be there for the long term.

TRUONG: I think the message for all of us is that it's very, very important that we always continue to innovate and come out with new products, products that consumers continue to want, at the right quality and cost. As we continue to grow and gain new consumers, that's when business will thrive and employees will thrive.

HSU: Back in Memphis, there is no trace of the cynicism I heard in Iowa, only enthusiasm for a company that's brought the promise of jobs.


TRACY: Here.

TAGG: There's Tracy. Ricky?

RICKY: Here.

HSU: In a classroom at Southwest Tennessee Community College, Memphis is following true on its promise to help Electrolux find and train workers. Job seekers spend four weeks working on hard skills, such as math and mechanics, and soft skills like communication.

TAGG: If I said, great job working the line today, you've really pushed out those double ovens like nobody's business. What does it give you?

UNIDENTIFIED WOMAN: Well, I'm very receptive.

TAGG: Right, it was sincere. It was...

HSU: Electrolux doesn't pay a penny for this class. Tuition is largely covered by taxpayers. The company does commit to sitting in and interviewing every student. And that gives students hope where they've had little.

James Bernard lost his job at a railroad

JAMES BERNARD: It's been very frustrating. You go to a lot of hiring sessions and it's 3,000-something people there. So it's very difficult to, you know, to get the few jobs that have been available in Memphis.

CHARLENE DEARING: It's been hard. I've been out of the workforce almost a year. My husband became ill.

HSU: With Alzheimer's. Charlene Dearing quit her job to care for him. She lost her home to foreclosure and now gets by cleaning houses. She's come to class wearing a suit. I want it that bad, she says.

DEARING: It's long term. It has excellent benefits. You can grow. And I plan to retire if this is for me.

HSU: Mayor A.C. Wharton shares her optimism. He refuses to worry too much about what would happen if Electrolux were to leave.

WHARTON: You will be better off even if that does happen, because you will have elevated the skill sets of your employees, their standard of living. They will be better off than we are now. How long should that last? Oh, I hope for eternity. But even if it does not, it's well worth it.

HSU: Whatever the future in Memphis and in Webster City, one thing is certain: In the global economy, companies have the power to shop around, while communities are left to compete with each other, all hoping they'll be winners, not losers.

Andrea Hsu, NPR News.

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