Whirlpool Plans $55 Million Tulsa Expansion

[Rattle Trap]

An estimated 150 jobs are coming to Tulsa, thanks to an $55 million expansion planned by the Whirlpool Corporation.

A news release says the company will add a factory distribution center adjacent to the existing manufacturing plant near E. 76th Street North and U.S. Highway 75. Whirlpool says the new 798,000-square foot warehouse will increase production capacity and efficiency across North America and support growth in the region.

"This new facility will help us streamline operations, from both a production and distribution standpoint, and ultimately allow us to better serve our customers throughout the region," said Whirlpool's Jim Keppler. "This investment is a testament to our skilled workforce in Tulsa and our strong relationship with the state of Oklahoma and the Tulsa community. We're excited to break ground and bring this project to life."

Whirlpool says the Tulsa plant produces more than 2 million cooking appliance products each year.

"Today's announcement by Whirlpool represents yet another major investment in the Tulsa community by one of the top companies in the world," Tulsa Mayor G.T. Bynum said. "Whirlpool has been a steadfast corporate citizen, and one of the region's leaders in recruiting Tulsans of all backgrounds and nationalities into their workforce. They are a model of the work we are advocating through the New Tulsans Initiative, and we look forward to ensuring they are able to continue to grow their operations in the region."

https://www.kjrh.com/news/local-news/whirlpool-plans-55-million-tulsa-expansion

[TulsaGoldenHurriCAN]

A key part about this plant mentioned in TW article:

The Whirlpool plant began operations in the Cherokee Industrial Park in 1996. Its initial cost was funded with $26 million from a half-cent sales tax approved by Tulsa County voters in 1994. The plant employs about 1,650 workers.

Does this initial investment seem like it's worth it now? That's a lot of employees (soon to be ~ 1,800) and $55 million expansion. With inflation, $26 mil then is worth about $44 mil today.

It would be interesting to see if corporate welfare pays off. In the case of taxpayers trying to lure the Boeing 787 to Tulsa, it didn't seem to pay off. The practically-free rent the bus plant pays seems like a huge loss also. Basically, we're giving millions to corporations in exchange for slightly higher than average jobs and the tax revenue that provides to the state and when they spend locally. I'm not sure what taxes Whirlpool pays besides land tax ($315k last year, $250k this year).

In today's dollars, they paid about $26,600 per job. It's likely that was recouped via taxes over the years plus about $6 mil property taxes. Often times, it doesn't work out so well: https://www.creators.com/read/jim-hightower/01/18/who-really-pays-for-corporate-subsidies

My guess it is that the Whirlpool case was slightly better than not doing anything and hoping they just build the plant here with the existing advantages, but in hind sight it does seem like a deal compared to what other cities have done. After that, Tulsa got more aggressive with incentives (as did most other large cities in the US). "New York gave a $258-million subsidy to Yahoo and got 125 jobs — costing taxpayers $2 million per job."

The state of Wisconsin just offered Foxconn $3 billion in tax breaks and incentives in order to attract somewhere between 3,000 and 13,000 jobs. That works out to a cost of between $250,000 and $1 million per job depending on the number of jobs eventually created. The state of Washington gave Boeing a potential $8.7 billion in order to keep the production of its 777x jetliner in the state and preserve or create about 8,500 jobs. That tax break could be $1 million per job.

Amazon was offered $8.5 billion by a town in Maryland and NJ offered $7 billion for HQ2. That's getting up around $200k/job. That's a whole new level of corporate welfare. And corporations are so large they can command unsustainable and unrecoverable sums from cities across the US and world. It's an arms race and like with new stadiums taxpayers buy for billionaires, it doesn't make economic sense. It's not capitalism, it's a government-mandated socialized welfare for corporations.

[TulsaGoldenHurriCAN]

Amazon gets billions in taxpayer subsidies each year (as does Walmart).

at the end of 2015 Bezos did indeed employ 146,000 people in his U.S. operations, but — ooops — they calculated that his taxpayer-supported behemoth had meanwhile eliminated some 295,000 U.S. retail jobs.

...

Working conditions in those sprawling, windowless warehouses are grim, and 40 percent of the employees are low-wage, temporary hires with no benefits and no job security. While warehouse wages everywhere are low, an ILSR survey documented that Amazon's average 15 percent lower than what other corporations pay.

The Whilrpool plant seems far better than this, but the concept has been driven to the ground and taken advantage of by more profit-driven corporations. The US pays out more in corporate welfare than it gets back in TOTAL corporate taxes! Is that supposed to be trickle-down at work? Or is that just using political power to legalize theft?

[Conan71]

Amazon gets billions in taxpayer subsidies each year (as does Walmart).

The Whilrpool plant seems far better than this, but the concept has been driven to the ground and taken advantage of by more profit-driven corporations. The US pays out more in corporate welfare than it gets back in TOTAL corporate taxes! Is that supposed to be trickle-down at work? Or is that just using political power to legalize theft?

Whirlpool was reasonable.  Considering the annual income 1650 jobs over 22 years, it's pretty safe to say it's been worth it.  The kind of numbers being thrown around these days, I can't imagine how long it would take to show any sort of payback for hand-outs er incentives in the billions.

[heironymouspasparagus]

Amazon gets billions in taxpayer subsidies each year (as does Walmart).

The Whilrpool plant seems far better than this, but the concept has been driven to the ground and taken advantage of by more profit-driven corporations. The US pays out more in corporate welfare than it gets back in TOTAL corporate taxes! Is that supposed to be trickle-down at work? Or is that just using political power to legalize theft?

Whirlpool never was 'higher end' jobs - it was and is still just above minimum wage manufacturing jobs.  They specifically said when they came to town (1996) in their 'cattle call' hiring meetings that these are NOT oil and gas nor airline jobs.  And they have not improved since then.  Factory worker will be under $15 an hour.  Line Leader about $17 an hour.   REAL minimum wage adjusted for inflation would be about $13 an hour - or about double what the current Republican suppressed minimum wage is today.

[Laramie]

An estimated 150 jobs are coming to Tulsa, thanks to an $55 million expansion planned by the Whirlpool Corporation.

A news release says the company will add a factory distribution center adjacent to the existing manufacturing plant near E. 76th Street North and U.S. Highway 75. Whirlpool says the new 798,000-square foot warehouse will increase production capacity and efficiency across North America and support growth in the region.

Expansion plans by Whirlpool Corporation will help them qualify for more incentives from the State of Oklahoma's Quality Job Program.  

Quality Jobs Program:  Incentives to qualifying businesses making new payroll investments of $2.5 million or more:   https://okcommerce.gov/business/incentives/quality-jobs-program/

[heironymouspasparagus]

Only in Oklahoma is a 'minimum wage' job considered a "Quality Job".

[Rattle Trap]

Factory worker will be under $15 an hour.  Line Leader about $17 an hour.   REAL minimum wage adjusted for inflation would be about $13 an hour - or about double what the current Republican suppressed minimum wage is today.

So what you're saying is industries and markets set better minimum wages naturally, and we don't need government to do that for us? 

Quality Jobs Program:  Incentives to qualifying businesses making new payroll investments of $2.5 million or more

I had never read into the details of that program before, but my understanding of it was that it required the newly added positions to pay an average salary of something like $60k+ a year? That $2.5 million threshold is low considering how many manufacturing companies add hundreds of jobs at a time.

[TulsaGoldenHurriCAN]

Whirlpool never was 'higher end' jobs - it was and is still just above minimum wage manufacturing jobs.  They specifically said when they came to town (1996) in their 'cattle call' hiring meetings that these are NOT oil and gas nor airline jobs.  And they have not improved since then.  Factory worker will be under $15 an hour.  Line Leader about $17 an hour.   REAL minimum wage adjusted for inflation would be about $13 an hour - or about double what the current Republican suppressed minimum wage is today.

They're not the greatest jobs but probably similar in vein to a lot of Amazon factory jobs in terms of pay. Also, great for those with no experience or no degree or technical certifications. In Oklahoma, the ~$33k-$40k salaries are enough to afford a house, even if it's not the nicest house or area. That's game changing over a $8-$10/hr job which basically eliminates that as an option. I knew of at least 1 person who worked at Whilrpool as a regular line worker and was the only one working in their household.

https://www.zillow.com/mortgage-calculator/house-affordability/

Once you trim out all the excess and fat, Oklahoma can be very cheap place to live. In the mid 2000's I used to live on around $3,600 year in college sharing a 2 bedroom with 3 roommates. It was comfortable to me. I couldn't imagine what I'd do once I graduated and got a real job!

My point is those $15-$19/hr jobs are lifeblood to those just need a bit of a boost to get ahead, FAR better than any minimum wage job or typical physical labor. That guy ended up getting better and better jobs over the years with that experience.

[Rattle Trap]

Speaking of Amazon, Whirlpool, and other new manufacturing jobs that are coming to Tulsa, my question is how will they find the bodies to fill those positions? 150 new positions is one thing but isn't Amazon's intention to hire around 1500 people?

Perhaps this question is better suited for another thread, but Tulsa doesn't exactly have a booming population, and no one is relocating here for $13-$18 an hour jobs. Between the unemployment rates being low here and the somewhat stagnant population growth, I've always thought Tulsa needs something to bring consistent national attention to the city. Things like the Gathering Place certainly help with that, but only for a short period of time.

Having gone to college down in Norman, it is very evident that OKC having a professional NBA team draws enough national attention to get people to start moving in from the coasts and other surrounding states.

Ultimately, Bynum and team are doing a good job recruiting companies to move/expand here, but you need the population growth to fill positions as well, which is something companies consider when picking cities.

[shavethewhales]

Perhaps this question is better suited for another thread, but Tulsa doesn't exactly have a booming population, and no one is relocating here for $13-$18 an hour jobs.

Sure they do. My company relocated a couple people to fill some positions at that rate. It's not as easy, but you can draw in plenty of people from smaller towns and nearby states like Kansas and Arkansas. Tulsa is a pretty big happening city compared to some of the surrounding po'dunks.

I agree with your sentiment though. It's always been a challenge. We simply aren't going to get an NBA/NFL/MLB/etc team here. Iterative improvements and major projects like Gathering Place are our path forward. Slowly people are discovering that Tulsa is a pretty cool place.

We kind of assume that any growth is good growth, but at some point we need some decent jobs. The hope is that 150 lower-level jobs here and there will ultimately support more and better jobs in the overall jobs eco-sphere, but it's always hard to say how well that works out. It's not as linear as everyone assumes or hopes.

[TulsaGoldenHurriCAN]

Speaking of Amazon, Whirlpool, and other new manufacturing jobs that are coming to Tulsa, my question is how will they find the bodies to fill those positions? 150 new positions is one thing but isn't Amazon's intention to hire around 1500 people?

Perhaps this question is better suited for another thread, but Tulsa doesn't exactly have a booming population, and no one is relocating here for $13-$18 an hour jobs.

Tulsa has grown around 5.6% since 2010 and OKC around 6.2%. Both growing faster than the state or US as a whole.

There's over a million in the metropolitan CSA and around 950k closer to Tulsa. That is plenty to provide 1650 new employees for jobs. Most people in the Tulsa area do not live in the city. The city may  be slowly losing population over time but the suburbs like Jenks and Bixby are among the fastest growing in state. OKC annexed a huge amount of its suburb areas and so they don't have quite the same population issue on paper but their core was gutted over many decades and the most of the southern part of the city remains pretty run down and is still losing population. People there move further out and still end up in the city along with the large numbers moving downtown into midtown-esque areas that were previously unoccupied.

The state as a whole is gaining population right at the middle of the pack (25th since 2010 and around 4.6% just slightly below the overall US growth rate over that time). I don't think an NBA franchise is the cause of many people moving here though. It might be a very slight bonus to some but mostly probably just incentivises some who live in Oklahoma already to move closer.

The keys are crime and education. Bad education begets crime and East Tulsa and North Tulsa are in an exceptionally bad cycle in terms of pushing residents away from crime and bad schools. The map of population growth shows people flocking to South Tulsa and suburbs and abandoning the inner city school districts while Midtown is pretty much "at capacity" with mostly single-family residents nearly all occupied. If we want that to change, public education has to be a top priority. And that will take decade(s) to see results but will be worth it.

Downtown Tulsa however is growing fast. Thousands of new units have been added over the last few years with many more planned. It takes time for that to fill in and be counted on statistics.

[heironymouspasparagus]

So what you're saying is industries and markets set better minimum wages naturally, and we don't need government to do that for us? 



I had never read into the details of that program before, but my understanding of it was that it required the newly added positions to pay an average salary of something like $60k+ a year? That $2.5 million threshold is low considering how many manufacturing companies add hundreds of jobs at a time.

No.  What I am saying is that Whirlpool jobs aren't all that great.  They are paid equivalent to what burger flippers should be getting.  And were paid back when the minimum wage peaked in 1968.

[heironymouspasparagus]

Speaking of Amazon, Whirlpool, and other new manufacturing jobs that are coming to Tulsa, my question is how will they find the bodies to fill those positions? 150 new positions is one thing but isn't Amazon's intention to hire around 1500 people?

Perhaps this question is better suited for another thread, but Tulsa doesn't exactly have a booming population, and no one is relocating here for $13-$18 an hour jobs. Between the unemployment rates being low here and the somewhat stagnant population growth, I've always thought Tulsa needs something to bring consistent national attention to the city. Things like the Gathering Place certainly help with that, but only for a short period of time.

Having gone to college down in Norman, it is very evident that OKC having a professional NBA team draws enough national attention to get people to start moving in from the coasts and other surrounding states.

Ultimately, Bynum and team are doing a good job recruiting companies to move/expand here, but you need the population growth to fill positions as well, which is something companies consider when picking cities.

1,500 is easy - all they have to do is be a quarter per hour higher than the near minimum wage job currently held.  And if they throw in just a little bit of benefits, they will fill up fast.


I made a comment in another thread about Varian and some talking up Tulsa I have been doing.  For those high end jobs, it all boils down to what 'attractions' are in the area...a little bit for employees, but even more for customers/clients that are brought to town.  The reality is, nationwide, we are looked on as "hicks from the sticks".  No matter how nice the Gathering Place is.  (And I went there today - it is very nice!)  Even remote divisions of bigger companies already here look at us that way - as the cheap labor place -but still hicks from the sticks....  Think Whirlpool.  Baker Hughes.  Badger Meter.  Johnson Controls.  Boeing.  American Airlines.  Schlumberger.  Halliburton.


Having said that, there are a lot of higher end immigrants to the state - many brought in as managers or senior technical people (older...) for a few years either as punishment or reward to enjoy the low cost of living here at the same corporate rate they enjoyed elsewhere.  Or same kind of person find a job here to help 'perk up' an existing company's performance.  Can sell a modest home worth a ton elsewhere and come here and get a McMansion, sock away some big bucks, then move back to their location of choice at retirement time.   (See the Up With Trees sign on Creek Turnpike thanking Pete Samoff...)

[DTowner]

Seriously, some people on here are actually complaining about a company announcing a $55 million expansion and hiring more employees all at no cost to the city?  $15 an hour keeps getting bandied about without any citation to a source, but if these are manufacturing jobs that figure seems extremely low and unlikely.