Ref: WSJ, Wednesday, Sept. 1, 2010
Wednesday’s WSJ reports on Whirlpool’s $300 million upgrade of domestic manufacturing. Both the Cleveland Tennessee plant and the Clyde Ohio plant are seeing major upgrades. Whirlpool is aggressively restructuring their North American plants… which includes closing plants in Evansville, Ind., Oxford, Miss. and a Michigan plant. The Clyde plant is to reduce time to build a washer by 10% and boost output by more than 10%.
Also while great concern is continually exhibited in the press about the fact that manufacturing employment continues to decline… as OM profs we need to explain (apparently again and again) that manufacturing production and productivity continues to expand. Manufacturing employment does continue to drop ….
But the US is still the largest manufacturing country in the world with annual productivity increases on the order of 3.4% since 1950.
This article open a great discussion:
(1) about Whirlpools 2006 purchase of Maytag (industry consolidations… economies of scale) and
(2) the fact that while a plant in Mexico was considered, Whirlpool is making these expansion in the US.
(3) You can also ask students by how much manufacturing employment drops each year (the article says .1%) or what percent of the work force is employed in mfg. (the text says 11.2%, but perhaps lower this year).
(4) What are the implications if manufacturing employment was not dropping … what if employment had never dropped in agriculture or the number of telephone operators.