Whirlpool to cut 5,000 jobs

Une petite récession chez Whirlpool, 5000 emplois coupés, ajouté une petite saveur de délocalisation en Pologne.

Michigan firm, whose brands include KitchenAid and Maytag,
to cut 10% of jobs in North America and Europe

Extrait de: Whirlpool Plummets as Appliance Demand Slips to 2009 Levels, Bloomberg, October 28, 2011,

Oct. 28 (Bloomberg) -- Whirlpool Corp., the world’s largest maker of appliances, sank the most since 1987 after saying it will cut 5,000 jobs and lowering an annual profit forecast by as much as 36 percent with demand in the U.S. falling back to recessionary levels.

The shares dropped 14 percent to $51.80 at 4:15 p.m. in New York for the largest decline since the so-called Black Monday stock market crash on Oct. 19, 1987. The stock has declined 42 percent this year.

The plan, which also includes reducing factory capacity by 6 million units, will cost $500 million, Whirlpool said in a statement today. Profit this year will be in a range of $4.75 to $5.25 a share, down from a previous forecast of $7.25 to $8.25, the company said.

Whirlpool Cuts 5000 Jobs, Warns of Lower Earnings

Whirlpool, the world's biggest appliance maker, cuts 5,000 jobs, closes a plant in Arkansas and slashes its full-year earnings forecast, citing recessionary demand levels and higher costs. James Hagerty has details on The News Hub.

WSJ 10/28/2011

“They are on fragile ground financially, and they’ve clearly got to do something to try to lower their cost structure to operate in this really tough consumer environment,” Jeffrey Sprague, an analyst for Vertical Research Partners in New York, said in an interview. Sprague recommends selling Whirlpool shares.

Whirlpool, which generates about half its revenue outside North America, shipped fewer appliances to every region except Asia in the third quarter. Demand declined as U.S. consumer confidence fell, the sovereign debt crisis accelerated in Europe and inflation slowed growth in emerging markets, Chief Executive Officer Jeff M. Fettig said today in a conference call with analysts.

Recession-Level Demand

Demand for major appliances in the U.S., Whirlpool’s largest market, has fallen back to the “recessionary levels” of 2009, Fettig said. Whirlpool’s shipments in North America may drop as much as 5 percent this year, down from an original forecast of as much as a 2 percent gain, the company said.

“Consumers are trading down to lower price points, housing is still dead, and the consumer is still stressed,” Sprague said, adding that reduced demand is affecting a range of big- ticket appliances, from air conditioners to fridges. “That has had an adverse effect.”

That drop in demand has hurt Whirlpool’s profit, which along with pension contributions, a legal settlement and today’s added restructuring costs, prompted the company to flip its forecast for free cash flow. The company had expected a gain of as much as $260 million in cash from operations after capital expenditures this year and now expects to consume as much as $200 million of cash by that measure.

Price Increases

Demand also dropped because Whirlpool has been raising prices to offset higher costs for materials such as resin, copper and aluminum, the company. Across-the-board price increases in North America have yet to be instituted and will begin in January, Marc Bitzer, president of North America, said on the call.

Whirlpool followed European rival Electrolux AB with a more muted outlook for the year. The Swedish company said today that it will deepen cost cuts after lowering a forecast for growth in Europe and North America this year.

Whirlpool’s reductions will be primarily within North America and Europe, where cuts will account for about 10 percent of all employees. The company has a global workforce of 71,000 at 66 manufacturing and research sites.

The plan also included the closing of the refrigeration manufacturing site in Fort Smith, Arkansas, by the middle of next year. Dishwasher production will also be moved from a factory in Germany to Poland. The measures will result in $400 million in annual cost savings by the end of 2013, Whirlpool estimates.

Third-Quarter Miss

Whirlpool’s third-quarter income excluding some items rose to $2.35 a share from $2.22 a year ago, the company said today. Analysts projected $2.47, the average of six estimates compiled by Bloomberg.

A year ago, Whirlpool gave a forecast through 2014 that called for annual sales to grow as much as 7 percent. That’s no longer the case, Fettig said.

“At the time, we certainly didn’t foresee the extraordinary material cost inflation or the weakening of industry demand levels that we’ve seen this year,” Fettig said on the call. “These challenges have certainly delayed our revenue growth and the rate of improvement.