published Friday, October 28th, 2011

Whirlpool to cut 5,000 jobs to reduce costs

  • photo
    A Whirlpool logo is seen on a Whirlpool refrigerator on the Singers showroom floor Thursday, Oct. 27, 2011 in Philadelphia. Whirlpool Corp. says it will cut 5,000 jobs in an effort as it faces soft demand and higher costs for materials. The jobs to be cut are mostly in North America and Europe. They include 1,200 salaried positions and the closing of the company's Fort Smith, Ark., plant. (AP Photo/Alex Brandon)
    Photo by Associated Press /Chattanooga Times Free Press.

Appliance maker Whirlpool Corp. plans to cut 5,000 jobs, about 10 percent of its workforce in North America and Europe, as it faces soft demand and higher costs for materials.

The world’s biggest appliance maker also on Friday cut its 2011 earnings outlook drastically and reported third-quarter results that missed expectations, hurt by higher costs and a slowdown in emerging markets.

The company, whose brands include Maytag and KitchenAid, has nearly 1,400 employees in its Cleveland, Tenn., division, which makes stoves and ovens. No announcements have been made about any staff cuts at the Cleveland plant, but Whirlpool said it plans to close company’s Fort Smith, Ark., plant.

The Arkansas plant shutdown will affect 884 hourly workers and 90 salaried employees. An additional 800 workers were on layoff from the factory and on a recall list.

Whirlpool will also relocate dishwasher production from Neunkirchen, Germany, to Poland in January 2012.

The company expects the moves will save $400 million by the end of 2013.

Whirlpool said it has been squeezed by soft demand since the recession and rising costs for materials such as steel and copper. Due to its size, Whirlpool’s performance provides a window on the economy because it indicates whether consumers are comfortable spending on big-ticket items.

Whirlpool has raised prices to combat higher costs, but demand for items like refrigerators and washing machines remains tight. Whirlpool is also facing discount pressure from competitors.

To offset slowing North American sales, Whirlpool has turned to emerging markets. But the company said Friday that sales have slowed there, too.

Steep costs and the dour global economy are affecting the entire appliance industry. Swedish appliance maker Electrolux said Wednesday that its third-quarter net income fell 39 percent and cut its forecast for demand in North American and Europe for the year

Benton Harbor, Mich.-based Whirlpool’s third-quarter net income more than doubled to $177 million, or $2.27 per share, from $79 million, or $1.02 per share. Adjusted earnings of $2.35 per share fell short of analyst expectations for $2.73 per share.

Revenue rose 2 percent to $4.63 billion, short of expectations for $4.74 billion.

“Our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs,” CEO Jeff Fettig said.

Unit shipments fell in all regions except Asia, where they rose 4 percent.

In North America, revenue fell 2 percent to $2.4 billion, and in Latin America, revenue rose 8 percent to $1.2 billion.

The company now expects 2011 net income will be $4.75 to $5.25 per share. Its prior guidance was net income would be at the low end of a range between $7.25 and $8.25 per share.

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eeeeeek said...

making room for executive bonuses

October 28, 2011 at 11:51 a.m.
Les_Treading said...

Yes, eeeeeek, I'm sure that's what they are doing. /s

Even if it were true, it's their prerogative.

October 28, 2011 at 2:12 p.m.
nowfedup said...

Reality is they are NOT losing money, but NOT hitting WS Analysts "forecasts", kind of amusing as no one it seems ever hears of "WS Forecasters" laid off when wrong, only workers. But that is the new greed of USA, where the nation/workers comes last, the greed first and most wealth is generated by legislation favors, not products AKA the lobbyists money rules.

October 28, 2011 at 2:22 p.m.
onetinsoldier said...

"Revenue rose 2 percent to $4.63 billion, short of expectations for $4.74 billion."

Not enough for the predators in the market so 5,000 families will be left to struggle and note that all of the layoffs are in the US and Europe, not Asia where they can take advantage of people. Jeff Fettig should be tarred and feathered. They should bring in the guillotine for people like him to make an example for the rest of the predators.

October 28, 2011 at 2:38 p.m.
potcat said...

Just keep moving all consumer products that Americans buy,and make them some where else. thats becoming the American way, and the day will come when we can't afford to by other Countries products either. We don't make our own products, shoes,socks,computers Medicines,Air conditioners,Toys,food, Halloween costumes or building productc ETC. ETC. ETC.ETC.ETC.ETC.Its absolutly insane! Untill someone wakes up and realizes that our JOBs problem will never be solved by small business. The United States has to start putting people to work by making ALL our own Consumer products. Capitalism does not work and is Evil to its CORE. For a Country to think it can keep its people working, by closing its Factories down and move them to other Countries is insane and will be its down fall.

October 28, 2011 at 5:17 p.m.
GlacierClipper said...

All of these companies that sends USA jobs overseas, should be forced out of the USA. That includes the CEO and his entire corporate offices.

October 28, 2011 at 10:26 p.m.
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