GE Appliances to remove hotel AC unit line from Louisville Appliance Park
GE Appliances plans to shift production of a hotel-room air conditioner from Louisville Appliance Park to one its four other U.S. factories, but the company said none of the 140 union workers who make the AC units here will be laid off.
LOUISVILLE, Ky. (WDRB) -- GE Appliances plans to shift production of a hotel-room air conditioner from Louisville Appliance Park to one its four other U.S. factories, but the company said none of the 140 union workers who make the AC units here will be laid off.
The move is meant to free up space so that Derby Industries, GE Appliances’ third-party parts distributor, can once again operate on site at Appliance Park, said GE Appliances spokeswoman Kim Freeman.
Derby Industries, which supplies the parts used to make the appliances, has been in Shepherdsville since April 2015, when a fire destroyed the building in which the company had operated at Appliance Park.
The move will affect about 140 union workers who make the Zoneline packaged terminal room air conditioner, a product typically used in hotel and motel rooms.
Freeman said the workers will be able to obtain other jobs at Appliance Park, including on the dishwasher line, where a second shift will be added soon.
Still, it’s disappointing to see a product removed from the Louisville campus, said Dana Crittendon, president of the IUE-CWA Local 83-761, which represents the roughly 3,800 rank-and-file workers at Appliance Park.
"Once again, it's a blow to Appliance Park here, and the autonomy here," Crittendon said.
Crittendon added that the move will mean less hiring at Appliance Park in the future even though no workers are losing jobs now.
GE Appliances “in-sourced” production of the Zoneline units from Asia last year, investing $40 million to make the product in Appliance Park’s Building 2.
The investment was completed in February 2016, about four months before General Electric Co. sold the Louisville-based appliance division to China-based Qingdao Haier Co. for $5.6 billion.
Crittendon said it will be at least six months until the GE Appliances can move the Zoneline work because will choose to exercise its right to "decision bargaining" under federal labor law. It's a process whereby the company has to evaluate alternatives proposed by the union.
The union used the process last year when trying to convince GE Appliances not to outsource the operation of its finished-products warehouse at Appliance Park to a third-party company, but GE Appliances ultimately followed through with the plan.
About 200 union workers in the warehouse were moved into other positions at the park. The union filed a complaint with the National Labor Relations Board over the move.
None of GE Appliances’ other factories – in Georgia, South Carolina, Tennessee and Alabama – have a union workforce, meaning the Zoneline production would move to a non-union plant.
Crittendon said those plants use temp agencies which pay entry-level wages even lower than the $12 per hour starting wage the IUE-CWA members begrudgingly agreed to when approving a labor contract with Haier earlier this year.
But Freeman said the plan to move Zoneline is “not about wages” but regaining the “tremendous logistics advantage” of having Derby Industries on site at Appliance Park again.
The delay in transporting parts from Shepherdsville has made it challenging to keep up with customer orders and even led to production idling at times, she said.
“We are moving it to make the room for Derby,” she said. “It is really not a financial situation for Zoneline.”
Building 2, which houses the Zoneline production, is also under capacity because GE Appliances shut down the money-losing GeoSpring hybrid-electric water heater line last year, Freeman said. That means the building is less efficient to operate for the Zoneline alone, she said.