Whirlpool Begins 1st Phase Of Global Restructuring
Staff -- TWICE, 3/12/2001
BENTON HARBOR, MICH. -Whirlpool has provided specific details about the initial phase of its global restructuring, which was first announced in January.
The Draconian plan, which includes the elimination of more than 6,000 positions worldwide, is designed to enhance Whirlpool's competitiveness and performance, the company said, as well as to reinforce its capacity to "invest in its brand-building strategies."
About 2,000 jobs will be cut in the first phase of the restructuring, including about 400 positions in North America that are being eliminated through voluntary retirement, targeted work force reductions, and by outsourcing Whirlpool's spare-parts packaging operations. The manufacturer said it would also sell or shut plants in Latin America and Asia.
The plan will be implemented in phases on a quarter-by-quarter basis and should be completed within the next 12 to 18 months. The first phase is expected to result in a first-quarter charge of about $75 million, while producing savings of $35 million in 2001 and $50 million on an annualized basis.
In total, the restructuring should produce pre-tax charges of between $300 million and $350 million, and annualized savings of between $225 million and $250 million, the majap maker said.
The cutbacks come amid the company's moribund fourth-quarter report and a challenging market for major appliances. Net sales of $2.6 billion for the fourth quarter were down 4 percent from the $2.7 billion recorded in the year-ago period, while net earnings were $67 million, down from the $113 million reported in the same three months last year.
