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Appliance manufacturer Whirlpool to cut 5,000 jobs
By Catholic Online (NEWS CONSORTIUM)
October 28th, 2011
Catholic Online (www.catholic.org)
October 28th, 2011
Catholic Online (www.catholic.org)
Appliance manufacturer Whirlpool Corp. has announced that it's cutting
5,000 jobs, mostly in North America and Europe, in addition to closing a
refrigerator factory in Arkansas. Cutting its profit forecast for the
year, the bad-things-happen-in threes sent the Whirlpool's shares
plunging 12 percent.
About 1,000 workers, including 884 jobs paid by the hour and 90 on salaries will lose their positions. Eight hundred workers have already been laid off from the factory.
Whirlpool Chief Executive Jeff Fettig blamed the job cuts on weak demand and higher costs. "During the quarter, we experienced weaker-than-expected global industry demand and elevated material costs," he said in a statement.
The factory in Arkansas is being closed on account of declining demand for its side-by-side refrigerators stemming from continued weakness in the economy. Whirlpool also cited "aggressive" low prices from overseas competitors. Whirlpool's side-by-side refrigerators retail for about $1,000.
The company said the production of refrigerators will now shift to its factory in Ramos Aripe, Mexico. The manufacturing of trash compactors will shift to Ottawa, Ohio, and the production of built-in refrigerators will shift to Amana, Iowa.
The town of Amana has felt the sting of job cuts in the recent past, when the company slashed 440 jobs in Amana in 2008 -- where the appliances bear the name of the town.
The company is also consolidating some of its European manufacturing business, shifting dishwasher manufacturing from Germany to Poland in January 2012.
Whirlpool plans to save $400 million annually by the end of 2013. Those savings, combined with price increases, are expected to widen profit margins starting next year, said Whirlpool.
However, there will also be additional costs from the restructuring, totaling $500 million, according to the company.
Whirlpool lowered its earnings outlook for 2011 to a range of $4.75 to $5.25 per share, compared to its prior outlook of $7.25 to $8.25.
The recent news just adds to an increasingly bleak job market. While hiring picked up in September nationwide, the unemployment rate remains stuck at 9.1 percent.
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