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Whirlpool Q3 Profits Up 124%; Will Lay Off 5,000

10/28/2011 08:42:47 AM Eastern

Benton Harbor,
Mich. - Price hikes and a richer mix of higher-margin majaps helped propel Whirlpool's
third-quarter profits 124 percent, to $177 million.

But forecasting
weaker-than-expected demand and a "much more challenging environment," the
world's largest majap maker said it plans to cut 10 percent of its North
American and European workforce by next year, resulting in the loss of 5,000
jobs.

The consolidation
includes the closure of a refrigerator plant in Fort Smith, Ark., the cutting
of 1,200 salaried positions, and a capacity reduction of about 6 million units
annually across both continents. The Fort Smith factory will close by mid-2012
and production will be moved to other North American facilities.

Whirlpool said the
actions will cost about $500 million, but will save the company $400 million a
year beginning in 2013.

"We are taking
necessary actions to address a much more challenging global economic
environment," said Whirlpool chairman/CEO Jeff Fettig. "We believe our cost and
capacity reduction initiatives, recently announced cost-based price increases
and innovative product launches will enable us to expand operating margins and
deliver long-term value to shareholders."

 During the third quarter, ended Sept. 30, net
sales rose 2.2 percent to $4.6 billion, driven largely by favorable currency
fluctuations. Third-quarter operating profit fell nearly 42 percent, to $136 million, as weaker global demand and higher raw material and oil-related costs offset the benefits of ongoing productivity, cost reduction initiatives and previously announced price increases, the company said.

In North America, sales slipped 2 percent to $2.4 billion as unit shipments decreased 3 percent, compared with a 4 percent decline in shipments industrywide during the period. North American operating profit fell 45.6 percent as a series of price hikes and an improved product mix were offset by lower unit sales, higher material costs and reduced production.

Looking ahead, Whirlpool
is projecting a 3 percent to 5 percent decline in full-year U.S. industry
shipments in 2011.

U.S. product
launches during the quarter included:

a Whirlpool-brand
resource- efficient dishwasher that uses 40 targeted spray jets to scour away
baked-on foods and deliver twice the coverage to clean without pre-rinsing,
saving consumers up to 20 gallons of water per load;

a Whirlpool-brand
counter-depth, full-capacity side-by-side refrigerator that monitors and
adjusts temperatures to help food stay flavorful;

Maytag's Bravos XL
top-load high-efficiency washer that offers the best cleaning while using up to
76 percent less water and 78 percent less energy compared to pre-2004
traditional top-load washers;

a KitchenAid
sequential dual evaporator side-by-side refrigerator that keeps food "fresher
longer and better than any other brand," Whirlpool claimed;

the Jenn-Air
brand's Prostyle undercounter refrigerator with adjustable shelves for maximum
storage flexibility, and a fixed spill-proof glass shelf; and

an Amana
top-freezer refrigerator with a door bin that keeps drinks secure and easy to
reach in the door.

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