BENTON HARBOR, Mich. – Whirlpool, just completing a US$100-million spin cycle of sorts at seven of its U.S. plants, has now turned its manufacturing-expansion focus to Mexico.
        The No. 1 U.S. home-appliance maker, however, has provided very few specifics on the Mexican project. In fact, Whirlpool's southward site-selection designs were only pithily mentioned at the very end of a recent news release, included in a one-paragraph insertion that appeared almost an afterthought.

Whirlpool's Wide-Ranging Optimization Whirlpool is nearing the completion of a $100-million stage in its ongoing optimization of its manufacturing network. The initiative optimized processes and installed new product platforms at seven U.S. facilities. The company hasn't specified how much was invested in each plant, citing "competitive reasons." The optimization process has included:         • Clyde, Ohio: Consolidated North American top-loading clothes-washer production at a 3,000-employee plant.         • Findlay, Ohio: Expanded production of dishwashers at a 2,000-employee plant.         • Evansville, Ind.: Expanded production of new refrigerator models at a 2,300-employee plant.         • LaVergne, Tenn.: Expanded production of a new line of room air-conditioners and built-in refrigerators at a1,100-employee plant.         • Marion, Ohio: Increased production of clothes dryers at a 2,800-employee plant.         • Oxford, Miss.: Expanded production of new cooking products at a 500-employee plant.         • Tulsa, Okla.: Expanded production of new cooking products at a 1,500-employee plant.

        "The company also expects to make additional investments to strengthen its North American refrigeration competitiveness through the expansion of Whirlpool's operations in Mexico," Whirlpool's statement said in part.
        The Benton Harbor, Mich.-based company continues to be mum, though, about any exact locations that it's eyeing in Mexico. Whirlpool spokesperson Christopher Wysethe said that the Mexican plant's site selection is just getting under way.
        Whirlpool's statement, however, did specify that the new operation "is expected to produce the company's next generation of side-by-side refrigerators for Mexico's domestic and export markets in 2005."
        And Whirlpool's further noted that some of the Mexican operation's work will be relocated from the U.S., including "some models currently manufactured at the Ft. Smith, Ark., operation." Whirlpool's Ft. Smith facility employs some 4,500 workers and ranks as the city's largest employer.
        But final specifics on the new Mexican plant won't surface any time soon. "Details regarding the location, scale and costs of the new facility will be finalized in early 2005," Whirlpool said in the statement.

Whirlpool's U.S. manufacturing optimization to date has included a rare site-selection U-turn: Mexican jobs crossing the border northward. That shift was part of the company's consolidation of its North American top-loading clothes-washer manufacturing at its operations in Clyde, Ohio (pictured).

Ironically, Whirlpool's U.S. manufacturing optimization to date has included a rare site-selection U-turn: Mexican jobs crossing the border northward.
        The company announced that it has completed a consolidation of its North American top-loading clothes-washer manufacturing in Clyde, Ohio. A small part of the manufacturing consolidated in the 3,000-worker Ohio plant was transferred from a Whirlpool facility in Monterrey, Mexico.
        "The top-loading washing machine factory in Clyde is the largest of its kind in the world," said Wyse in explaining the company's rationale. "The sheer scale of that site and the capacity we have there made that determination, in part, for us, as did our need to create some space for the new product in Mexico."
        But the migration of those Mexican jobs to the U.S. is an anomaly among appliance-makers. The current flow virtually always runs the other way - or to China.
        Whirlpool North American Executive Vice President Region David L. Swift could well have been explaining why in discussing the company's U.S. manufacturing retooling, which has optimized processes and installed new product platforms at seven American plants (see accompanying chart).
        "These initiatives," said Swift, "will strengthen Whirlpool's industry-leading position in a dynamic business environment marked by intense competitive pressures and rising costs,"
        Those same pressures and costs are what are prompting companies like Whirlpool to shift more jobs to Mexico.
        In October, for example, Sweden's Electrolux announced that it's considering closing its 2,700-employee refrigerator plant in Greenville, Mich., and relocating the work to Mexico. The company already has a Mexican vacuum-cleaner plant with more than 1,000 employees in Juarez.
        Electrolux officials said that the company was concerned by the Michigan facility's "weak financial performance." Relocating the operation to Mexico, they explained, could cut costs by as much as $81 million over the long term. (Michigan officials are still fighting to retain Electrolux's Greenville plant, which is more than 100 years old.)

Maytag has taken a similar path. The Newton, Iowa-based appliance maker over the last two years has announced the relocation of a U.S. refrigerator plant and two parts plants to Reynosa, Mexico. Labor costs were a dominant factor in those decisions, company officials said.
        That cost differential will be obvious in the 160,000-sq.-ft. (14,400-sq.-m.) maquiladora refrigerator plant that Maytag is now building on a 62-acre (25-hectare) site it purchased in Reynosa. The production that the Mexican plant will take over is now performed in a 1,600-employee plant in Galesburg, Ill., that will close in late 2004.
        Workers in the Galesburg plant average earning about $15 an hour. In Reynosa, Maytag will be paying the $2.60-to-$3 hourly rate (including benefits) typical in Mexican industrial facilities. (Some of the Galesburg plant's work will also be transferred to some of Maytag's other U.S. plants.)

Reynosa may also be a contender for Whirlpool's new plant. Whirlpool already has a manufacturing facility in that border town, where more than 200 non-Mexican firms have operations that employ some 70,000 workers.
        The company also has Mexican plants in Celaya, Monterrey and Puebla. And it could eventually turn out to be significant that Whirlpool isn't closing down the Monterrey plant from which production was shifted to Ohio. Instead, the company is now redesigning that facility to produce a new, unspecified "laundry product" that it says will be announced in 2005.
        How Whirlpool's new plant affects employment at the Ft. Smith facility remains to be seen. With the company's ongoing manufacturing optimization, jobs could conceivably be shifted to - or from - the Arkansas operation.
        The company's Mexican plans, though, do throw a shadow over a local expansion that was announced late last year. Whirlpool at that time said that it planned to add 700 jobs in Ft. Smith to make a new refrigerator line. The company hasn't commented further on its plans for the Ft. Smith expansion.
        By chance, former Wal-Mart President and CEO David Glass discussed the migration of U.S. manufacturing jobs offshore in Little Rock just a few days before Whirlpool's announcement. Glass told the Little Rock Rotary Club that, as Wal-Mart's CEO, he had tried to encourage the company's vendors to manufacture in the U.S. But vendors, he said, usually decided to manufacture elsewhere due to cost considerations.
        The nation's loss of manufacturing jobs could put the U.S. in peril, maintained Glass, now owner of the Kansas City Royals.
        "Those of you that were around in World War II, I can tell you that we won World War II only because of the manufacturing capabilities in this country, nothing else," he said. "Had it not been for that, we would all be speaking German."

ERLANGER, Ky. – Expansion-happy Toyota Motor Manufacturing North America (TMNNA) is at it again: The seemingly ubiquitous site-selection presence is enlarging its North Kentucky headquarters complex with a $15.6-million addition to the quality and product engineering lab there.
        The addition will almost triple the size of the lab in Erlanger, Ky., which tests equipment, materials and parts for the company's manufacturing plants. TMMNA will add 98,400 sq. ft. (8,856 sq. m.) to the facility's existing 59,400-sq.-ft. (5,346 sq. m.) footprint.
        The project marks a further move toward higher-end U.S.-based functions in Toyota's highly successful build-'em-where-you-sell-'em strategy. Like many automakers, Toyota decided that it has to do more than build where it sells: It also needs on-the-ground design and engineering operations in key markets to feel consumer needs and desires.

Toyota's North American quality and production engineering labs "will play a growing role in a number of functions," said TMMNA's Dennis Cuneo (pictured speaking in Georgetown, Ky., at the celebration of the 10-millionth Toyota made in North America).

        The skill level of the jobs that the North Kentucky expansion will create reflects that strategy. The 75 new positions stemming from the project will be mostly engineering positions. Average salaries will be just over $60,000, company officials said.
        "As our North American manufacturing operations continue to expand, the quality and production engineering laboratory will play a growing role in a number of functions - including parts, components and materials testing and warranty-claim analysis," Dennis Cuneo, senior vice president of TMMNA, said in announcing the project.

The Erlanger quality and product engineering lab was already part of Toyota's first major shift of design and engineering work to it U.S. operations. The North Kentucky unit - along with TMMNA's labs in Ann Arbor, Mich., and in Newport Beach, Calif. - designed and engineered the 2004 model of the Camry Solara, which is made at Toyota's giant complex in Georgetown, Ky.
        The 2004 Solara is the first-ever Toyota vehicle to be completely designed and engineered by a U.S. team. All of Toyota's previous vehicles sold in North America were designed and engineered in Japan at the automaker's huge headquarters complex in Toyota City.

The Kentucky-made 2004 Solara (pictured) is the first-ever Toyota vehicle to be completely designed and engineered by a U.S. team.

        "TMMNA is getting more involved in new vehicle development as part of the overall growth in our manufacturing efforts," said Toyota spokesman Daniel Sieger.
        The U.S.-designed version came only after the American market's lukewarm reaction to the Japanese-designed 2003 Solara. That lackluster performance prompted Toyota to hand over the reins to its U.S. team for the 2004 Solara's design and engineering. That team clearly wanted to create a very different-looking member of the Camry-model family.
        The resulting differentiation is reflected in the 2004 Solara's rounded edges, giving it a look very unlike other family-focused cars - including the Camry. The product is squarely aimed at a more adventurous-minded market segment than the Camry, with the emphasis on fun as well as functionality.

Toyota is also playing up the newest Solara's U.S. roots. The banner hanging overhead when the first 2004 Solara rolled off the production line in Georgetown on July 1 read, "The All-American Solara." And the first Solara's roll-out was orchestrated by a sound system on the factory floor that blasted out Neil Diamond's "America."
        (Toyota officials did, however, concede that parts of the auto have a non-American origin. As with all models using the Camry platform, the engine, drive train and transmission were designed in Japan.)
        Site selection has been another key corporate function in which Toyota's U.S. operations are playing a bigger role.
        "Until a few years ago, Toyota in Japan used to lead these efforts," said Cuneo. "They would put together a team in Japan and come over here. It's only been in the past several years we've really taken the lead in trying to find the appropriate sites. Japan still has to approve the site we ultimately recommend or select, but we initiate the process now."

Toyota officials haven't said which other models will be the main focus for the new engineering staffers in Kentucky.
        The automaker has a lot of North American action from which to choose. Toyota already has 10 North American manufacturing and parts facilities, and it's in the process of building three more in Baja California, Mexico; San Antonio, Texas; and Jackson, Tenn.
        That North American expansion blitz has paid off handsomely. Toyota in 2003 for the first time ever sold more than 1 million vehicles in the U.S. during a year's first six months. The company, which is aiming at 2 million U.S. sales this year, will likely displace Chrysler as 2003's No. 3 vehicle seller in the U.S.
        Kentucky has been a key U.S. concentration for Toyota since the automaker's 1985 arrival. The company has invested $4.5 billion to date in the Bluegrass State and employs more than 8,300 state workers.
        The latest expansion in Erlanger will bring employment to more than 1,000 on the 42-acre (17-hectare) headquarters campus. Toyota has spent $189 million at the site since opening the TMMNA headquarters in 1996.
        The most recent capital outlay in North Kentucky is getting some help from the state. The Kentucky Economic Development Foundation Authority is providing $2.5 million in tax incentives to help in funding the expansion.

HARPER, Kan. – Elkhorn Valley Packing (EVP) is getting the heck out of Dodge.
        Dodge, Neb., that is, the city that's now EVP's home base.
        A specialty processor and marketer of beef products, the company is relocating its headquarters from the Cornhusker State to Harper, Kan. In addition, EVP will relocate its sales, beef fabrication and refrigerated storage functions to the south-central Kansas city, company President Mike Grant explained.
        The relocation doesn't involving jaw-dropping job numbers. Company officials anticipate that EVP's Harper operation will open with 35 employees and expand to 75 workers.
        But the project does have jaw-dropping proportional oomph when the size of the two affected cites is factored in.
        Dodge, for example, has some 700 residents. EVP's 70-worker Dodge operation represents the city's largest employer.
        Harper, EVP's future headquarters city, isn't much bigger. It has a population of about 1,600.

Costs and speed were the catalysts for EVP's move 379 miles (606 kilometers) south.
        Both those requirements were met by the Kansas space in which EVP will relocate - an existing facility built in 1966 as a livestock processing center. Monfort Co.was the facility's current owner in 1997 when that company decided to shut down the operation.

In addition to its headquarters, EVP is relocating its sales, beef fabrication (pictured) and refrigerated storage functions to Kansas.

        Monfort in 1998 sold the building to the Harper County Economic Development Corp. (HCEDC). HCEDC paid $50,000 for the facility, which has an assessed value of $400,000. (The city also picked up a $350,000 federal tax credit in the transaction.)
        EVP's management team came away impressed after looking at the former Monfort facility. Enough so, in fact, that they discontinued consideration of moving the headquarters, along with its other functions, to Wellington, Kan. Located 37 miles (59 kilometers) west of Harper, Wellington is already home to an EVP plant that employs 40 workers.
        Wellington business recruiters made a strong bid for EVP. But the city's only workable option for space was to expand EVP's existing operation.
        Harper, on the other hand, had the speed edge, offering a vacant building specifically built for EVP's industry. The company, in fact, has already completed the paperwork on the deal, and it has begun work on a $1.2-million retrofit of the former Monfort operation. EVP expects to open its operations in the Harper facility by April of 2004.

The Harper facility's price was also right for EVP. The company will make an initial payment of $50,000 for what are being classified as leasing costs - for now, at least. But if EVP maintains at least 35 employees throughout its first two years of operations, it can buy the facility from the HCEDC for $1.
        Grant called the deal "a very positive move for our company, one that helps lower costs and helps us stay in line with our industry's costs."
        EVP's costs were further reduced by the $750,000 community development block grant (CDBG) that the Kansas Department of Commerce awarded the company. EVP is matching that amount in funding the Harper facility's retrofit. (Wellington officials had also planned to use CDBG funds if the company picked their area for its relocation.)
        Founded in 1992, EVP currently processes about 40,000 head of beef a year. Its products are used by some 150 retail outlets and restaurants throughout the Midwest.