December 18, 2017
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Engineering Culture

Haier America Tech Center finds home in Evansville
Wayne Steele, Haier America's general manager of research and development, formerly worked at Whirlpool.

In a lab near Downtown Evansville, a mechanical arm opens the doors of a refrigerator, pauses a moment, then closes them.

Then it does it again. And again.

Over the course of several weeks, the machine will open and shut the main fresh-food door 365,000 times while the freezer door will be tested 150,000 times, simulating the wear the doors would experience over a lifetime of household use.

Engineers will study the degree of door drop — determining whether the doors begin sagging on their hinges — and the integrity of the gaskets.

This exercise is one of numerous tests and experiments that take place in the 30,000-square-foot Haier America Tech Center at 900 W. Indiana St., which appliance giant Haier opened last year to conduct research and development (R&D), product testing, consumer experience research, and more.

“We try to be very thorough,” says Wayne Steele, Haier America’s general manager of R&D.

Haier (pronounced higher) was founded in 1984 in Qingdao, China, as what the company calls “a simple refrigerator factory.”

It grew rapidly as the Chinese economy boomed, then it acquired overseas rivals. It began appliance production in the U.S. in 1999 when it opened a large factory in Camden, South Carolina.

Today, Haier ranks as the biggest home appliance brand in the world according to Euromonitor International, a British market research firm. In 2014, it reported global revenues of $32.6 billion and profits of $2.4 billion.

In mid-January, Haier Group announced that its Qingdao Haier unit will buy General Electric Appliances, giving it a large presence in the U.S.

But until last year, Haier had no R&D center in this country. The company initiated a site selection search, exploring Georgia, South Carolina, Tennessee, and others.

Ultimately, Evansville offered something no other city could match: engineers with vast experience and expertise in designing appliances.

During the American economic boom of the late 1940s and 1950s, Evansville proclaimed itself the “Refrigerator Capital of the World.” International Harvester, Servel, and Seeger-Sunbeam built what some folks still called “iceboxes” at plants around the city.

In 1948, when the plants were producing 3,500 units per day, the Evansville Chamber of Commerce inaugurated the Refrigerator Bowl college football game.

Whirlpool Corp. came to town in 1955 through its merger with the Seeger Refrigeration Co. It outlasted its competitors in the River City and acquired their plants.

Whirlpool remained in Evansville for 55 years before shuttering its plant in 2010 and shifting production to Mexico. Over those decades, the company employed numerous engineers — including, some 20 years ago, Wayne Steele, the Haier America R&D GM.

When Whirlpool pulled out six years ago, it declared that it would maintain its product design center — with some 300 engineers and other workers — in Evansville. That didn’t pan out, but some Evansville-based engineers remained in the area.

That left a rich vein of what Steele called “highly specialized people” that Haier America could tap into.

“These high-tech jobs are perfect for Indiana, a state where our workforce has the skills and knowledge needed to design products for homes across America,” Indiana Gov. Mike Pence said in 2014 when Haier announced the R&D center would move to Evansville.

“The guys from the city and state went the extra mile” to recruit Haier, says Steele.

And little wonder: Haier pledged to employ 50 people earning an average of $50 an hour.

In the first round of hiring, the company brought on 21 engineers including “a lot of ex-Whirlpool guys,” one of whom was lured out of retirement in Florida, says Steele. The first was Pat Braun, a 30-year Whirlpool engineer who is Haier’s director-commercialization. Braun, a native of Pittsburgh, is a University of Evansville graduate who lives in Newburgh, Indiana, today.

In all, says Steele, the center’s engineering staff boasts 1,249 years of appliance experience.

It also has engaged with Evansville’s Envolve Engineering, whose principals are former Whirlpool engineers, and the Indiana Regional Cities Initiative in a partnership with Vectren for an urban living research center.

And it’s tapping into regional universities. Two of Haier’s three co-op students are studying engineering at the University of Evansville, and Haier also looks to Purdue University and the University of Southern Indiana for talent.

The Haier Tech Center looks like a brand-new facility, but is in fact a former Coca-Cola bottling plant, which is owned by Fire & Rain CEO Ron Bonger, who purchased the building as FH5 Properties in June 2013. The building was gutted and remodeled in a mere five months, says Steele.

He says his company strives to design appliances — refrigerators, dishwashers, stoves and ranges, washing machines and dryers, portable air conditioners, televisions, and electric wine cellars — that integrate well into homes and with people.

A “key segment is urban living for millennials,” young adults who often live in compact spaces, he says. To them, Haier offers a line of small appliances, such as a combination washer-dryer that fits beneath a countertop.

“As people move into smaller spaces in the U.S., they want nicer products,” such as those with stainless steel cabinets traditionally found on high-end products, says Steele.

But it’s not just a matter of designing products to scale. At the Evansville Tech Center, Haier tests appliances to ensure that they meet what Steele refers to as “agency standards” set by Underwriters Laboratory as well as the U.S. EPA and U.S. Department of Energy, such as qualifying for the Energy Star power efficiency standard.

There are durability tests and tests to gauge the cleaning effectiveness of a dishwasher. Turkeys are cooked and bread is baked to test cooking appliances.

One machine subjects refrigerators to temperatures of 30 degrees below zero to determine how well foam insulation adheres to plastic. Precisely temperature- and humidity-controlled rooms allow engineers to gauge performance in many environments, including high-humidity environments that would be encountered in tropical markets.

While Haier already has R&D centers in China, New Zealand, Japan, and Europe, it felt compelled to open a center to test products for North America.

“Cooking is done much differently in China than here,” says Steele. “We entertain a lot in our kitchens,” so appliance designs must satisfy Western tastes.

Similarly, “not a lot of ice and cold water” is expected by Chinese consumers, but are vital here.

In the Consumer Experience Room, people are brought in to interact with appliances while Haier personnel observe through one-way glass.

Haier even evaluates tactile experience. When a consumer touches one of its appliances, Steele said the company wants them to “recognize the feel as a Haier product” and to sense its high quality.

The company also conducts field tests — sending appliances to consumers’ homes for longer-term interaction.

It’s part of what Haier calls “zero distance” between the company and the customer.

The center does original product research, including what Steele calls “advanced disruptive technology,” such as solid-state cooling technology used in Haier’s new wine cellars.

Other research goes into cutting energy consumption to reducing manufacturing costs.

Just last year, the Haier America Tech Center staff launched 87 products, and plans to do more in 2016. (Haier Group says 4 percent of its annual revenues go into R&D.)

The Haier center also includes a procurement operation led by Whirlpool veteran Ed Anderson. This year, Steele says, Haier’s Evansville workforce could approach 60 people.

“And we’ll continue to grow” as Haier increases North American market share, he says.

“We’ll grow the R&D organization,” says Steele, “to appropriately support Haier America.”

For more information about Haier America Tech Center, visit haieramerica.com.

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