An enormous company like Whirlpool is able to offer economists insight into the American and global economy. Their performance serves as a window to the economic situation, as it shows whether consumers are spending on large ticket items.
Today’s news, therefore, is quite negative, as Whirlpool Corp. has announced that it plans to cut 5000 jobs. This is about 10% of its North American and European workforce. The cuts include 1200 salaried positions and the closing of their plant in Fort Smith, Arkansas.
In addition, Whirlpool is relocating its dishwasher production from Neunkirchen, Germany to Poland in January 2012 and they predict that all of these actions will save them $400 million by the end of 2013.
Whirlpool’s brands include Maytag and KitchenAid as well. They explain that the current recession has certainly hurt their bottom line, as has the rising costs for materials such as steel and copper. They have also been facing pressures from discount competitors.
As CEO Jeff Fettig explained, “Our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs.”