Whirlpool, Its Earnings Down, Plans More Job Cuts

The Whirlpool Corporation, the home appliance maker, said Tuesday that it would cut about 5,000 jobs by the end of 2009 because of the global credit crisis and its expectation for continued reduced demand in North America and Europe.

The company also reported that its earnings fell 7 percent in the third quarter on lower unit volumes and higher material costs. Whirlpool lowered its earnings outlook for the year.

“The global credit crisis has had a profound negative impact on what was already a weakening and very fragile global economy,” Jeffrey M. Fettig, chairman and chief executive, said in a statement. “Declining home values, rising unemployment and very low consumer confidence levels will likely prolong a negative demand environment at least through the middle of 2009.”

The company, based in Benton Harbor, Mich., earned $163 million, or $2.15 a share, for the quarter, compared with $175 million, or $2.20, in the period a year earlier.

Revenue rose 1 percent to $4.9 billion from $4.8 billion.

Analysts surveyed by Thomson Reuters anticipated, on average, earnings of $1.69 a share on revenue of $5 billion.

Whirlpool said it expected a profit of $5.75 to $6 per share for 2008, compared with its previous estimate of $7 to $7.50 a share.

The job cuts include positions being eliminated from plant closings that the company already announced this year along with new reductions taking place now and through the end of next year. Whirlpool, whose brands include Maytag, KitchenAid and Jenn-Air, said it has 73,000 employees worldwide.

Since January, Whirlpool previous announced the closure of four plants in LaVergne, Tenn.; Oxford, Miss.; Puebla, Mexico; and Reynosa, Mexico — a loss of about 2,000 jobs.

The company said it also will shutter its facility in Jackson, Tenn., and shift production from there to its plant in Findlay, Ohio, eliminating about 500 positions.

It also will cut approximately 500 salaried jobs throughout North America, including both full-time and contractor positions.

Another approximately 1,900 jobs will be cut overseas, mostly in Europe.

The cuts are expected to produce annual savings of $275 million, Whirlpool said. It now anticipates restructuring expenses of about $170 million in 2008 compared with its previous estimate of $100 million.

Source: NYtimes.com