Obscene Electrolux Incentive Deal Puts Tennessee at Risk

Lewis Loflin

Around 2002 I was told by Electrolux "we don't hire people with college" and when they spotted my attendance at King College in Bristol on my employment application, I was rejected on the spot - even after the paperwork to hire me was being processed.

This incident was the last straw for me, so that is part of the reason I started this website. This goes on in this entire region all the time and has left our community unable to compete or obtain good jobs.

But this is only one example of the dirty corporate culture of the region and Electrolux is one of the worse examples.

By 2003 Electrolux was shuttering its Bristol plant claiming a lack of qualified workers. At one time they employed between 500 to 1000 workers depending who one asks. The Swedish owned company was sending the jobs to Mexico and about the same time shipped 2700 jobs from Greenville, Mich. to Mexico as well. But that wasn't the end of this dirty dealing in Tennessee.

By August 2004 Electrolux promised 700 new jobs with the "expansion" in Springfield Tennessee - but most of the jobs never went to Americans.

By 2005 they claimed to have added 900 workers then laid off 450. Like most companies they hire through temp agencies and many workers never see the pay and benefits promised. When they promise an average pay of $29,000 a year they forget to tell you that doesn't include the multitudes hired through temp agencies making $15,000 a year.

By December 2007 news reports broke of illegal aliens got the jobs instead - when word got around ICE was moving in hundreds fled the plant. Some reports also say some suppliers were under investigation for similar practices - temp agencies and illegal aliens are common tactics among manufacturing companies in Tennessee often with help from the state. The whole setup was called an illegal alien magnet. Some much for Springfield's great job creation story.

http://www.newschannel5.com/Global/story.asp?S=7458278 put it this way:

But a News Channel 5 investigation uncovered some disturbing facts about many of those employees...But how many of those jobs went to American workers?

"This is what Springfield, Robertson County is," said Amanda Clack, a former employee. "They are taking over...Ninety percent of that plant is Mexicans," she said. "Maybe 5 percent white, 5 percent black."

Worst Yet

The Memphis Business Journal May, 3 2011 paints a rosy picture of this latest deal. They claim:

Electrolux Home Products Inc. plans to build a $195 million manufacturing facility in Memphis' Frank C. Pidgeon Industrial Park...Electrolux is closing a facility in Montreal and eliminating 1,300 jobs there as it shifts production to the U.S. by 2012.

The project has come under fire for the appropriations and bond's high price tag: the state of Tennessee has committed a total $97 million to the project and the city of Memphis and Shelby County have committed $20 million each.

An NPR report by Andrea Hsu April 08, 2013 reports the following. They are firing their workforce in Quebec Canada and moving to Memphis Tennessee. "With the move, Electrolux will go from paying a base union wage of close to $19 an hour in Canada to roughly one-third less in Memphis. The company is expected to eventually hire about 1,200 people at the Memphis location."

That is if one isn't being hired through a temp agency for $8-$9 an hour. To further quote,

In 2011, as part of an investigative series, the Memphis newspaper the Commercial Appeal calculated that the city of Memphis, Shelby County and the state of Tennessee together had come up with subsidies of $188 million to land Electrolux.

Also in 2011 this scumbag company slammed the doors in Webster City, Iowa, costing 2,000 Iowans their jobs paying $22 an hour.

The AP January 9, 2014 reported that Electrolux was supposed to be adding 650 jobs to a plant in Memphis and will "eventually" (yeah right) employ 1200 people. (But that's what we heard in 2011 - when are they going to get to 1200 jobs for $188 million?)

Yet Memphis is riddled with what critics say are severe financial problems to the point they were trying to get Shelby County to take over their schools.

We have low-wage high poverty states mostly in the South spending hundreds of millions to lure in companies that fire other American workers then too often never deliver the jobs and benefits promised.

In Tennessee and many other Southern states the government takes a direct role in blocking unions and fighting any reform of these abusive tactics. This was true when Tennessee Republicans intervened directly to block a union at a Tennessee Volkswagen Plant in 2014.

These companies routinely employ illegal aliens and utilize temp agencies to cut wages even further - then in a few years they pull out. This is not job creation - this is job genocide.

September 18, 2011 blogger Kenneth Thomas wrote the following and it gets even worse:

Electrolux is getting almost $200 million to destroy 60 jobs in North America...It is unlikely that this oven plant has nearly the possibility of spurring co-location from suppliers that an auto plant does. Moreover, auto plants pay more, and they do not receive subsidies equal to 99 percent of the investment...

...this subsidy package was negotiated in secret, and the full amount of the incentives were not disclosed to the public; even now, the newspaper has been unable to obtain all the details that likely will add to the cost.

In addition, the state agreed to a clause in the deal that prevents it from getting its money back if Electrolux fails to deliver on the 1,240 jobs or closes...

My God. Earlier material.

Bristol Virginia plant closing to idle another 250 workers

The Aerus Electrolux plant in Bristol Virginia will can another 250 workers by May. At teleconference with Aerus Chairman and Chief Executive Officer Joseph P. Urso said, "We are extremely grateful to our employees in Bristol and to the surrounding community for all of their support and efforts over the years...And we are very sorry for any adverse impact that this decision may have on our employees, their families and friends in the Bristol area."

To quote the news article, "Company officials said in a statement that Aerus had signed an agreement with The Eureka Co. -- a subsidiary of Swedish firm AB Electrolux -- to have Eureka's El Paso, Texas, facility take over assembly and some manufacture of Aerus vacuum cleaners, floor polishers, floor shampooers and air-filtration devices now made at the Bristol plant."

To further quote, Urso said implementing outsourcing opportunities -- such as the contracting of Aerus production to an outside firm -- would "lower the cost and improve the supply of Aerus products and services...The transfer to El Paso will include production equipment at the Bristol site. They will keep about 100 support and administrative jobs at the Bristol plant. The 30-year-old Bristol operation, which began as Electrolux, was bought in 1998 by Engles, Urso, Follmer Capital Corp. and renamed Aerus. They shut down their 200-employee plant in Piney Flats in 2002 and an earlier 100 employees got canned from last August to November in Bristol. Total loss, 550 job.

Ref. Bristol Herald Courier March 14, 2003 Aerus Electrolux: www.aerusonline.com

But this is only the beginning of the corporate games and Electrolux, and Tennessee will be hearing more from Electrolux.

Electrolux goes Mexican


The Swedish appliance maker Electrolux reported a decline in quarterly profit for a fifth consecutive quarter yesterday and said it might close a plant in Michigan. Net income fell 38 percent, to 767 million kronor ($99 million), and sales fell 4.3 percent, the company said. Electrolux, based in Stockholm, said it might move manufacturing operations in Greenville, Mich., to Mexico and take a charge of 1.2 billion kronor to close the plant, which employs 2,700 people.

ELECTROLUX, a Swedish household appliance maker, said it would close a manufacturing facility in El Paso, Texas, and transfer operations to a plant in Juarez, Mexico. The move will cost the company US $20 million and will affect 850 employees, Electrolux said. Ref. Freedom Magazines, Inc. October 1, 2004. There was no mention of the equipment that was stripped from the Bristol plant was being sent to Juarez. But Bristol isn't alone.

Electrolux moves hundreds of jobs from Greenville to Mexico, the company is trying to take hundreds more with it.

A symposium is being held next week in Mexico for Electrolux suppliers. Five suppliers, nearly 500 jobs, are what's at stake when Electrolux moves a Greenville plant to Mexico. Neither Electrolux nor any of the five suppliers in Greenville will confirm who is going to Mexico or if they will stay.

In an industrial park on the east side of Greenville are some of the smaller companies that supply the town's biggest employer, Electrolux...Economic development companies say Greenville is a textbook case of what happens when a big company leaves town...is there any hope for the 500 supplier jobs? City officials say they're working to attract companies to town to use the products made by the suppliers...

The average wage of those suppliers is about $29,500 a year. So, it's obvious how any job loss from suppliers would add to the ripple effect in Greenville. From Wood TV Channel 8

Electrolux Launches Automated Warranty Claims Processing System in Mexico via ServiceBench; Leader in Integrated Service Supply Chain Automation Announces First Latin America Deployment. Ref. Business Wire May 25, 2005.

Electrolux Picks Juarez for 3,000-Worker Plant by JACK LYNE, Site Selection Executive Editor of Interactive Publishing. Electrolux announced that it's chosen a site in Ciudad Juarez for a plant that will replace the 2,700-employee facility that the Swedish appliance giant is closing in Greenville, Mich.

The Michigan operation ranks as the world's largest refrigerator plant...the new south-of-the-border facility near El Paso will be a whopper. The new plant will span 1.5 million sq. ft. (135,000 sq. m.) and will employ 3,000 workers, Electrolux officials said in announcing the project at Juarez's Cibeles Convention Center.

It will be the biggest industrial building ever in the Mexican state of Chihuahua, according to officials with the Juarez Chamber of Commerce. Electrolux plans to invest $100 million in what officials described as "the first phase" of the project...

But back in Tennessee...

While Electrolux was busy canning workers in Bristol, they were busy collecting unspecified millions in corporate welfare from Tennessee Governor Phil Bredensen a year later.

Electrolux Welcomes Governor and Officials; Celebrates Business Growth August 20, 2004

Springfield , Tennessee, Electrolux Home Products today welcomed Tennessee Governor Phil Bredensen for a celebration of expansion of the company's cooking products factory in Springfield... State and local officials claimed the creation of 700 new jobs. Electrolux claimed to have invested $28 million "to develop a new product line and expand production at the site."

According to company official, "We appreciate the partnership with the State and local governments that have helped make this investment and these new jobs possible," said Terzo. "The State of Tennessee is working hard to create an environment that makes business growth possible."

Funding from the State is assisting the company with training programs to increase productivity and improve safety in the factory. The City of Springfield has also helped with infrastructure improvements to facilitate the factory expansion.

But there's something wrong and it was revealed after the party was over:

Electrolux to Cut Jobs at Tennessee Plant Feb 28, 2005

Appliance-maker Electrolux, which added more than 900 employees to the work force at its range factory in Springfield, TN, U.S. last year, will temporarily lay off 450 people. The layoffs involve 50 Electrolux employees and 400 workers hired through a temporary staffing agency...Despite the cuts, the company remains one of the largest industrial employers in the area with a staff of about 3,300 workers. After the adjustment, the employment level will still be 18 percent higher than it was at the same time last year, Mr. Evans said. So much for the 700 new jobs.

According to Google: Electrolux Home Products is the North American marketing and distribution arm of Sweden-based -- and #1 appliance maker -- AB Electrolux. Electrolux is also a top brand in US markets. The division sells home appliances (air conditioners, refrigerators, microwave ovens, stoves, electric and gas cooktops, dishwashers, washers, dryers, vacuum cleaners) and outdoor products (lawn mowers, garden tractors, barbecue gas grills) through home improvement retailers such as Lowe's. Brands include Electrolux, Frigidaire, Eureka, Husqvarna, Poulan, and Weed Eater.

The last straw...

Springfield, Tennessee: Investigation: Plant A Magnet For Illegal Aliens (Electrolux) From newschannel5.com

Springfield, Tennessee -- A hidden camera investigation conducted by News Channel 5 revealed Springfield's biggest employer may be the biggest offender when it comes to hiring undocumented immigrants. Electrolux is one of the largest manufacturing plants in Middle Tennessee. It employs thousands of workers. But a News Channel 5 investigation uncovered some disturbing facts about many of those employees.

From city leaders to factory employees, several people said the same thing about Electrolux. They said illegal immigrants, not Americans, comprise a large portion of its workforce. Three years ago, the company came to Robertson County and local residents were excited about the hundreds of new jobs it would bring.

Dozens of Employees Walk Away From Electrolux Dec 15, 2007 http://www.newschannel5.com/global/story.asp?s=7502804

...dozens of workers walked out of a Robertson County plant on Friday after Electrolux of Springfield was recently the subject of a News Channel 5 investigation. News Channel 5 looked into whether the plant employed illegal immigrants. Sources told News Channel 5 more than 100 workers have been let go in the past couple of days. The employees said it was complete chaos. According to a News Channel 5 source, so many workers have been let go that it has been hard to do their jobs at the Electrolux plant...

According to a NewsChannel5 source, Electrolux let go 120 employees Thursday and 52 on Friday. "They were calling your supervisor, calling names to go to HR, taking them to HR and from there walking them out the door. Something about their Id's or Social Security numbers weren't matching," said an anonymous employee.

Electrolux released the following statement:

"Electrolux does not tolerate or condone the use of false documentation in attempting to establish work eligibility. Every new hire undergoes two verifications of employment eligibility. In light of the recent news stories, we are conducting a review of employment eligibility documentation. The company's policy regarding the presentation of false identity or work authorization documents is termination of employment."

...Somebody had called in saying INS was going to be there to pick them up when they walked out the door, so they voluntarily walked out themselves...The situation could hurt Electrolux's production. Electrolux wouldn't confirm or deny the number of workers that have been let go in recent days or why.

The immigration and customs enforcement department, better known as "ICE," is looking into illegal document vendors in the Springfield area. Earlier this week, federal Agents arrested two people, and charged them with making and selling fake IDs in Robertson County.