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Whirlpool Business Decision

1.Was the Whirlpool plant closing just another “business decision,” or did it carry with it social and ethical responsibilities and implications? Explain Whirlpool’s decision to close the manufacturing plant in Evansville, Indiana was a business decision the company made in response to poor sales. The decision most likely pleased shareholders but had social and ethical implications. The plant closure impacted the lives of an entire community. According to the mayor of Evansville, 10,000 jobs will be lost due to the plant closure. Since business ethics is concerned with morality and fairness in behavior, actions, and practices that take place within a business context, this case is a prime example of Whirlpool’s operating strategy of Immoral management. They exploited an opportunity for corporate gain.

2.What are the legal and ethical responsibilities of Whirlpool in a plant-closing case such as the one in Evansville, Indiana? The legal responsibilities assumed by Whirlpool in a plant-closing case are to comply with all laws and regulations so close the plant, relocate, and honor warranties and guarantees. Since law “often lags behind more recent interpretations of what is considered appropriate behavior,” is can be assumed that Whirlpool’s decision to close the plant and open a plant in

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Mexico was completely within the confines of the law. Whirlpool is spending $21 million in employee termination costs and has given enough notice to employees to adapt to the changes. The ethical responsibilities in this case are for Whirlpool to do what is EXPECTED of the business by society. Given that the stakeholders had an overwhelming negative reaction to this decision, it can be assumed that Whirlpool did not take into consideration their ethical responsibilities to the stakeholders.

3.In light of the federal stimulus funds that Whirlpool received, did it have a greater responsibility to make the Evansville plant sustainable? Or were the funds received totally unrelated to the plan-closing decision? Whirlpool had a greater responsibility to make the Evansville plant sustainable. The plant had produced Whirlpool goods for 54 years and has provided employment for many generations of families during this time. By choosing to close the plant and relocate to Mexico, Whirlpool has taken
funds from the United States and cut jobs of thousands of Americans. The stimulus funds should have been used to stabilize the company so that it may continue to add to the economy, not take from it.

4.Was the Whirlpool division vice president’s memo threatening future job opportunities an ethical practice? Was it an unfair labor practice? Explain. Cutting thousands of jobs is hardly ever an ethical practice. For the vice president to add a threat to the pending job losses make this decision even more unethical. The current standards for Social Accountability 8000 include a section on Discipline. According to SA8000 No corporal punishment, mental or physical coercion, or verbal abuse can be practiced by an organization.

5.What about the plant closing’s impact on the community and related stakeholders? Did the company have any responsibility to work with the community in this decision? What should it have done and how should it have done it? The company could have worked closely with the local union to come up with the best solution for all stakeholders. The decision to announce the closing of a large plant only one year before the closure date does not allow the community and related stakeholders ample time to adjust to such a drastic change. Whirlpool should have disclosed the information early and given the community and stakeholders the resources and information to assist them in recovering from the closure.

6.Should there be legislation preventing American firms from closing down and moving to less expensive parts of the world? Should NAFTA be repealed?

I believe that legislation preventing American firms from closing down and moving to less expensive parts of the world would cause many corporations to establish themselves in foreign countries. There should, however, be legislation regulating American companies that have accepted federal stimulus funds in order to prevent the corporations from making destructive decisions. Repealing NAFTA was cause an influx of North American immigrants to come to the United States in order to find more work, thus causing job losses for many more United States citizens.

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