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Whirlpool Q3 Profits Fall 7%

10/28/2008 01:36:00 PM Eastern

Benton Harbor, Mich. — Whirlpool will cut an additional 3,000 jobs over the next year as it reins back production amid steep declines in worldwide majap demand.

The cuts include 1,000 positions in the United States and about 1,900 jobs overseas, mostly in Europe.

The U.S. reductions include 500 salaried positions and 500 factory jobs. The latter will follow the shutdown of a Whirlpool plant in Jackson, Tenn.

The headcount reductions do not include temporary layoffs.

The cuts come on top of another 2,000 jobs that will be phased out with the previously announced closures of four additional plants in the U.S. and Mexico.

“We are in the midst of a rapidly changing and very challenging economic environment,” said Whirlpool chairman/CEO Jeff Fettig. “We have seen a sharp drop in demand in North America and Europe during the third quarter, and we do not expect demand conditions to improve in the near term.”

Adding to the downturn is the global credit crisis, which is having a “profound negative impact on what was already a weakening and very fragile global economy,” Fettig said. He added that declining home values, rising unemployment and very low consumer confidence will continue to suppress demand through the middle of 2009.

Fettig’s remarks accompanied the release of the company’s third-quarter financial results. Net income for the three months, ended Sept. 30, fell 7 percent to $163 million and revenue rose 1 percent to $4.9 billion.

Results were also impacted by record high oil and material costs, and lower gains from the sale of assets compared with the year-ago quarter.

Those factors were partially offset by price increases, improved productivity and a shift to higher-margin products.

Restructuring expenses related to the capacity reductions are expected to reach $170 million this year, up from a previous estimate of $100 million.

In North America, operating income fell 44 percent to $74 million and sales slipped 7 percent to $2.7 billion.

During the quarter Whirlpool launched its Resource Saver dishwasher, designed to increase tough soil cleaning performance, and added an eco-friendly “SteamClean” feature on Whirlpool branded electric ranges.

Within the Maytag brand, the manufacturer launched the high-efficiency Bravos top-load washer and the Centennial laundry pair featuring heavy-gauge steel lids and smooth balance suspension to reduce vibration and noise.

Whirlpool also introduced a top-load laundry pair for its Amana brand offering antimicrobial protection and a stylish, updated console.

Looking ahead, the company expects full-year industry-wide majap shipments to fall 10 percent in the U.S., down from previous guidance of 6 percent to 7 percent.

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