Whirlpool staying in Michigan

Tax credits persuade firm to build new facilities in Benton Harbor

Jaclyn Trop and Karen Bouffard / The Detroit News

Lansing -- Whirlpool received $19.4 million worth of state tax credits Tuesday that will help the world's largest home-appliance manufacturer keep its headquarters in Michigan.

The Michigan Economic Growth Authority approved the five-year tax breaks to help at least 868 jobs with an average weekly wage of $1,980 remain in Benton Harbor. The tax incentives will accompany Whirlpool's $86.8 million investment to consolidate its headquarters along the riverfront downtown.

Whirlpool, which last year had revenues of $17 billion, said Tuesday it expects record earnings this year, had "multiple options" to move to other cities, including Chicago and Atlanta, said D. Jeffrey Noel, corporate vice president for communications and public affairs. But the tax credit, combined with Benton Harbor's "small town" community and amenities, including a new golf course, persuaded Whirlpool to stay, he said.

The consolidation will revolutionize Whirlpool's operations, which are spread out among 17 buildings in Benton Harbor and neighboring St. Joseph, Noel said.

The current facilities are overcrowded, with many workers sharing cubicles, and still use 1950s ventilation systems. Lack of space and outdated facilities have made it difficult for Whirlpool to recruit new talent, Noel said.
"Anytime you have nicer, newer facilities and you can get anywhere you need in five minutes, you have a more productive environment," he said.
Most of the current facilities are a 20-minute drive from each other. The trio of new buildings that will be constructed along the St. Joseph River will be close enough so "Peyton Manning could almost throw a football from one to the next," he added.
Construction will start this fall and take up to five years. Whirlpool plans to raze a boarded-up Sears store, abandoned grocery, former car dealership and other blighted structures to build one of three corporate campuses.
Whirlpool also announced Tuesday that its second-quarter profits more than doubled to $205 million from $78 million a year ago because of cost cuts and improved sales in Latin America and Asia.
But sales are expected to slow in the second half as demand wanes and the Sept. 30 deadline looms for buyers to complete their home purchases using the federal home buyer tax credit.

Whirlpool has almost 3,200 workers throughout Michigan, doubling its employment base here since 2001. The company makes products in 12 countries under brand names such as Whirlpool, Maytag, KitchenAid and Jenn-Air.
Whirlpool must maintain statewide employment of 2,300 to keep its tax credits. The project also must maintain total state government revenues through 2018 of $54 million.

Gov. Jennifer Granholm defended the use of tax breaks at a press conference Tuesday announcing a series of tax incentives. Several Republicans running for governor say the policy tries to pick winners and losers.
"(Critics) would have us unilaterally disarm," Granholm said. "Every state is competing, and we cannot lay down our arms. We must compete -- we're going to keep jobs here."

Though Whirlpool's decision to remain in Michigan is a boost to the state and Benton Harbor's reputation, it's difficult to assess how successful the development will be, said Theodore Bolema, principal at Anderson Economic Group, a consulting firm in East Lansing.

"It's an article of faith that you have to reward these incentives," Bolema said. "Otherwise you put the state at a disadvantage."
The move could help depressed Benton Harbor reverse its fortunes, Mayor Wilce Cooke said. The move is expected to create 1,468 spinoff jobs in the supplier, hospitality, transportation and retail industries in the city.
"People in other areas would bend over backwards -- give an eye and tooth -- for a project of this magnitude," Cooke said.




From The Detroit News: http://www.detnews.com/article/20100721/BIZ/7210331/1001/biz#ixzz0uUusAWuM