18 dollars an hour.
That’s supposedly the difference between labor costs in Mexico and labor costs in Milledgeville, Georgia.
It’s a dollar amount that greatly contributed to Rheem’s demise in Baldwin County, according to Angie Gheesling. Gheesling has had dialogue with Rheem corporate officials since 1998, first with the Georgia Department of Economic Affairs and later with the local development authority.
“In the end, the state couldn’t throw enough money at Rheem to keep them here,” said Gheesling. “We were told that an employee in Mexico would do the same job as an employee at the Milledgeville plant for around $18 less an hour. This factors in workers compensation benefits, etc. It’s not just the raw wage per hour. We knew that it was even out of the state’s hands at that time.”
Gheesling said that she is not bitter towards Rheem. Like many companies, Rheem was blindsided by the economic downturn and forced to make some tough decisions, she said. Gheesling, however, is somewhat bitter towards the federal government. Trade provisions enacted by Congress in the early 1990s have made it increasingly difficult for American factories to survive, she said.
“The dilemma lies with the way our country has chosen to do business with other countries. Ultimately, there is a fear that manufacturing will be a thing of the past for the United States,” Gheesling said. “This country will rarely see companies employing 1,000 plus people in one location as we did in the 1980’s when companies like Rheem were flourishing. We now see how devastating a closure of this size is for a small community.”
The state of Georgia’s dealings with Rheem have remained behind the scenes. Roughly four years ago, state leaders sweetened the pot and worked out a deal with Rheem, according to Gheesling. Through incentives and cash, the state convinced Rheem to move its corporate headquarters from New York City to Atlanta. Rheem also agreed to move more equipment to Milledgeville and add additional 900 employees at its Milledgeville plant, added Gheesling. In the years that followed, however, the housing market bottomed out and the demand for air conditioners dropped dramatically.
For the complete story, pick up the Oct. 8-14 issue of The Baldwin Bulletin.
