US Appliance Manufacturing Is Not Dead Yet

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When it seemed that all hope was lost for US based manufacturing, GE stunned the industry by bringing jobs back to Kentucky at appliance park. Electrolux is following suit in Memphis, TN. Trends reported by A-1 Appliance Parts.

2012 saw GE investing 800 million dollars in their Louisville, KY plant

For the past few decades, manufacturing in the USA has looked somewhat suicidal. Many have been calling for the official funeral as US companies streamed jobs to Mexico, China, India, etc. in a race to the bottom. There is good news on the horizon though: all hope is not lost! General Electric, a historical trendsetter in the appliance industry, is bringing appliance manufacturing back to American soil.

2012 saw GE investing 800 million dollars in their Louisville, KY plant Appliance Park. They began making refrigerators that previously had been manufactured in Mexico or South Korea. New workers and engineers were hired as the plant came back to life and more appliances moved from the planning phase to actual production. Energy efficient water heaters, stainless steel dishwashers and front load washers and dryers are also helping reverse the trend of offshore manufacturing.

By the end of 2014, General Electric expects 75 percent of their appliance revenue to come from American made products. That is a staggering number when you consider the current trajectory of most manufacturing in North America. In fact, GE is already the largest domestic producer of refrigerators in the US. It won't take them long to move ahead with other appliances as well. The big question is, will Whirlpool follow.

Whirlpool sells more appliances in the US than any other manufacturer. These appliances are marketed under several brand names like Kitchenaid, Kenmore, Roper, Maytag, and of course, Whirlpool. They still make some appliances in the US but they are also still pushing production to Mexico. Whirlpool will be watching GE's latest move anxiously and, if “Made In America” still works, they won't be above following suit.

Electrolux is “insourcing” in 2013 with it's new Memphis, TN plant focused on high-end cooking products. Electrolux estimates this plant will bring 4,000 new jobs to the area within five years. Though they are a Swedish company, Electrolux still operates it's US based business like the US company it purchased: Frigidaire.

What this will mean for imports like LG, Samsung and Haier is yet to be seen. Higher tarrifs have already been introduced for some refrigerators coming from Mexico & South Korea. An increase in fuel costs has also affected the bottom line on bulky items like dishwashers and refrigerators. Parts and service for these brands is also more difficult because they don't spread out distribution or handle warranty like GE, Whirlpool and Electrolux. Add in currency exchange rate fluctuations and profitability on imported appliances gets even trickier.

Profitability is what it's all about at the end of the day and the US market still has plenty of wealth to support domestic manufacturing- especially as the global playing field gets a bit closer to level.

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Nathan O'neal
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