Top stories include Whirlpool, Mitsubishi, 188th

Lost jobs, the possible loss of manned aircraft for the 188th Fighter Wing and controversy over trash service were some of the top stories in the Fort Smith region during 2012.

Although it was announced in 2011 that Whirlpool would close its Fort Smith plant, the doors were officially closed in June. Along with the mothballing of Mitsubishi’s wind-turbine assembly plant and news that the 188th would likely lose its A-10 mission, 2012 was not exactly a promising year for the Fort Smith region.

Following are the top five stories that The City Wire staff believes had the most impact on the Fort Smith regional economy during 2012.

5. Voter-approved tax projects
Voters in Van Buren approved a 1% sales tax increase during a July 10 special election.

One half of the tax (.50%) is permanent, and will fund operations in the parks, fire and police departments, as well as a new senior center. This portion of the tax passed with 1,355 (69.77%) votes “for” and 587 (30.23%) “against.”

The other half of the tax increase will sunset “in seven years unless voters decide otherwise,” said Van Buren Mayor Bob Freeman.

In all, the tax will fund approximately $10 million in new bonds for capital improvement projects. The new police station is expected to cost $3.5 million, while the fire station and senior center are estimated at $2.5 million each, and the parks improvements are expected to total $1.5 million.

“This was a statement about the future of this community and where they want to go,” Freeman said.

Fort Smith officials gained overwhelming voter approval of a package of infrastructure and recreational improvements through a 1% sales tax extension. The refinancing of bonds was approved by 75.8% of participating voters.

Voters were asked to extend the use of a 1% sales tax to refinance bonds, pay for the issuance of new bonds and support operations of the Fort Smith Fire Department and Fort Smith Parks & Recreation Department.

The bonds are estimated to finance more than $112.56 million in new bonds and potentially direct $45 million in 10 years toward the operations of the city’s Fire Department and Parks Department. The package included construction of aquatics park at Ben Geren Park valued at $4.26 million.

4. The automated trash issue
Fort Smith citizens had a chance to vote in November on mandating a citywide automated trash collection system. The vote put an end to a controversial issue that plagued the Fort Smith Board of Directors for much of 2012.

Early in 2012, the Fort Smith Board voted 4-3 to halt full automation of trash collection. The vote potentially ended a more than 5-year investment by the city to build a fully automated trash collection system. A group of homeowners lobbied the Board to exempt their neighborhoods from the automated service.

Activist Joel Culberson, who supported the fully automated system, gathered signatures to place the issue on the November ballot and overturn the Board action. Culberson was successful in his petition effort, and the vote wasn’t even close, with 80% of voters approving a fully automated trash system. Out of 25,791 votes cast, only 5,261 were in opposition.

3. Mitsubishi mothballed
Mitsubishi announced in April 2012 it would “mothball” its Fort Smith wind-turbine assembly plant that was expected to employ 400 at full production.

Officials with Mitsubishi Heavy Industries said the demand for wind turbines in North America had stagnated, with new contracts difficult to obtain. The company is also in a legal battle with General Electric related to patent claims on wind-turbine equipment.

“The GE litigation is one of the reasons for MHI's decision,” Mitsubishi spokeswoman Sonia Williams told The City Wire. “As a result of GE's serial litigation against Mitsubishi, wind turbine developers in the US are hesitant to purchase Mitsubishi wind turbines and banks are loathe to provide funding for projects that use Mitsubishi wind turbines.”

Williams also said: “Mitsubishi plans to mothball the plant for the time being.”
Mitsubishi officials said they will post a fiscal year 2011 loss of about $240 million (20 billion yen) for the “write-down of wind-turbine inventory and related measures.”

2. The188th mission fight
Broad cuts in U.S. defense spending include the removal of the 20 A-10 Thunderbolt fighter planes from the 188th Fighter Wing in Fort Smith.

The unit has almost 1,000 full- and part-time employees. The loss of the fighter mission is scheduled to be replaced with the unmanned Predator drone. The drones and specialists needed to analyze drone-driven data would not be based in Fort Smith.

A Congressional compromise reached Dec. 18 retained A-10 units in Michigan and Indiana, but not with the188th. Arkansas’ delegation, to include U.S. Rep.-elect Tom Cotton, R-Dardanelle, said the Air Force decision to reduce A-10 units was not based “on a detailed analysis of cost-efficiency.”

Members of Arkansas’ Congressional Delegation have repeatedly sought answers from U.S. Secretary of Defense Leon Panetta and Air Force generals on the data used to make the decision to cut the A-10’s out of the 188th mission. The most recent letter was sent Nov. 27 to Gen. Mark Welsh III, chief of staff of the U.S. Air Force.

Fort Smith Communications Manager Tracy Winchell said the news was like "a blow to the gut."

"But it’s a new day, and this is in the hands of our congressional leaders. I’m inclined to trust them," Winchell said, adding there is "still a chance something crazy could happen in that room today. Much of the debate will be behind closed doors because there is just so much classified material."

Winchell, who serves on the 188th/Fort Chaffee Community Council said the goals of the council have been to "preserve as many jobs as possible and...make maximum use of airspace and ranges of the 188th which does two critical things."

1. Whirlpool plant formally closes
In June, Whirlpool closed its refrigeration production plant in Fort Smith, ending more than 45 years of Whirlpool operations at the plant.

The move resulted in about 1,000 lost jobs when the plant closed. However, Whirlpool, which employed more than 4,500 at the Fort Smith plant in 2006, moved production out of the plant for several years prior to the closing. Most of that production was moved to facilities in or near Monterrey and Ramos Arizpe, Mexico.

The loss of the about 1,000 Whirlpool jobs in Fort Smith is estimated to result in the overall statewide loss of almost 1,550 jobs and a labor income reduction of $61.15 million, according to an economic impact model prepared by Gregory Hamilton, senior research economist at the University of Arkansas at Little Rock, for The City Wire.

Officials with Benton Harbor, Mich.-based Whirlpool Corp. announced in early September that Concord, Ontario-based Infinity Asset Solutions had purchased the large – more than 2 million square feet – facility in Fort Smith. Infinity “focuses on the disposition of assets for private and public companies, insolvency and financial institutions, as well as leasing companies.” However, the deal was declared dead in late November.

Whirlpool’s decision to leave did not sit well with Arkansas Gov. Mike Beebe. During an Aug. 13 interview with Talk Business, Beebe was atypically blunt about Whirlpool closing its Fort Smith operation.

“What’s happened in Fort Smith is just heartbreaking to me with Whirlpool,” Beebe said. “I think it was short-sighted on Whirlpool’s part. I’m sorry, I’m not happy with Whirlpool. ... Going to Mexico for that cheap labor and taking all those American jobs down there, is, in my opinion, very disheartening.”

NOTABLES
Following are other notable new events in 2012.

• Notable deaths in 2012 include business leader Don Flanders, former Razorback football star Jim Grizzle, Community boosters Bert Wright and Greg Smith, businessman Luther Stem Jr., businessman Stephen A. Griffin, former manufacturing exec Chuck Cramer, community volunteer Ann Patton Dawson, former Sebastian County Judge Bud Harper, businessman Gene Goins, and businessman John Putnam.

• Umarex and Walther Arms, the maker of the world famous Walther PPK handgun used by James Bond, announced in November they would co-locate at 7700 Chad Colley Blvd. in the city's Chaffee Crossing development.

The new North American headquarters to Walther and expansion of existing Umarex operations could bring “70 to 120 new jobs” to the area, said Adam Blalock, CEO of Walther and Umarex USA. Combined, the companies plan to invest more than $7 million toward expansion and operations, Blalock added, with new jobs adding to an existing staff of 71 employees in the next five years.

• Archie Schaffer, born in Fort Smith and raised in Charleston, ended on Friday (Oct. 5) his last day as a full-time employee of Springdale-based Tyson Foods Inc. Schaffer began working in politics before he graduated from the University of Arkansas. His political history includes helping a then Harrison businessman John Paul Hammerschmidt unseat the powerful incumbent U.S. Rep. James Trimble, and Schaffer  — not yet 25-years-old at the time — served as chief of staff for Gov. Dale Bumpers.

• UA Athletic Director Jeff Long placed Head Hog coach Bobby Petrino on paid administrative leave on April 5 while Long investigated details of Petrino’s motorcycle wreck. Petrino said he was alone when he crashed his motorcycle on Highway 16 near the Crosses community in Madison County Sunday evening, but it was eventually learned that he lied to Long and the media about having a passenger – athletic department staffer Jessica Dorrell. Also, Dorrell’s hiring by Petrino has been called into question. On April 11, Long fired Petrino, saying the coach’s serious lapse in judgment forced the dismissal.

What resulted was the hiring of John L. Smith – with a 10-month contract – to lead the team. Razorback fans then watched a talented pre-season top 10 favorite fall to a disappointing 4-8 season, including a loss to  University of Louisiana-Monroe and a 52-0 blowout loss to Alabama. Ticket sales bottomed out, and attendance was light. Heisman talk surrounding Quarterback Tyler Wilson and Running Back Knile Davis was silenced early in the season.

Long announced Dec. 6 the hiring of Bret Bielema, then the head football coach for the University of Wisconsin Badgers, to be the next Razorbacks head coach.