Labor & Employment Law

Report: Whirlpool Closing Will Cost Indiana Millions of $$$

By James Parks

Doris Nevill, a Whirlpool worker, says she cried all day about losing her job at the Evansville plant.

Whirlpool’s decision to abandon U.S. workers and send 1,100 production jobs out of Evansville, Ind., to a new plant in Mexico will create a ripple effect that will cost thousands of jobs and millions of dollars in lost income, according to a report released today.

Whirlpool already has eliminated one shift at the refrigerator plant in Evansville. The remaining jobs end in June. The study, written by Greg LeRoy, executive director of Good Jobs First, was released at press conferences in Evansville and Indianapolis, the state capital.

The study estimates the plant closure will throw 2,502 people out of work. That includes 966 Whirlpool workers who live in Indiana and another 1,536 who work in businesses that will lose significant clientele after the plant shuts down. That total doesn’t include job loss in the neighboring states of Illinois and Kentucky, where 20 percent of the employees live. Read the full report here.

In addition, the state stands to lose $138 million in income. Tax revenues will drop by $17.7 million, especially in property, sales, personal and corporate income taxes, at a time when states are facing revenue shortages. Indiana faces a $309 million revenue shortfall in the next two years, according to state budget figures.

Darrell Collins, president of IUE-CWA Local 808, which represents the Whirlpool workers, says state officials don’t get it.

They don’t see the real impact this closing is going to have on the city and the Tri-State area. Our concerns are falling on deaf ears. So we are putting out this report so they can see it in black and white. We have to let them know that every time you turn around another business is closing. We have to stop this progression.

In the report, LeRoy says that the cost to taxpayers is incomplete because it does not include substantial lost federal revenues. Nor does it include programs to assist the dislocated workers. The cost of unemployment insurance (UI) benefits for the dislocated Indiana workers will cost more than $4.15 million, he says. Combining tax losses with UI costs generates a conservative taxpayer-cost estimate of more than $21.8 million?or $22,588 per worker dislocated in Indiana.

The study, commissioned by Local 808 and the AFL-CIO Industrial Union Council, lists local businesses and charities that stand to lose a significant number of customers after the closure. They include four banks, two auto dealerships, a United Way office, two grocers, 75 percent of local churches, three hardware stores, five department stores and dozens of restaurants.

Indiana State AFL-CIO President Nancy Guyott says:

The job losses and devastation of communities in Evansville are being repeated in town after town throughout Indiana and across the country. It just shows what we need to do to turn this country around to revive our middle class.

Full post as published by AFL-CIO NOW BLOG on April 14, 2010 (boomark / email).