Long-time appliance manufacturer Whirlpool Corp. announced today it is scaling back thousands of jobs. The Benton Harbor, Mich. based company is also seeking to make some massive changes along with the 5,000 jobs being eliminated.
The job cuts equate to about 10 percent of its total jobs in North America and Europe. Additionally a refrigerator factory in Arkansas has been slotted for shut-down and a dishwasher factory is moving from Germany to Poland.
The company reports "big ticket" items, such as refrigerators and washing machines, are not high in demand.
CNN Money reported refrigerator production is moving to Mexico and trash compactors to Ohio; built-in refrigerators are going to Iowa.
According a Whirlpool statement, Jeff M. Fettig, Whirlpool Corporate chairman and chief executive officer, said,
"During the quarter, we experienced weaker than expected global industry demand and elevated material costs. Consumers continue to show strong preference for our unmatched global brand portfolio and new product innovations, and we are beginning to see the benefits from previously announced price increases. However, 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."
The International Business Times reported Whirlpool has been "shifting business to emerging markets", but is expecting to see additional global slowdown in North America, Latin America and Asia, along with the already stagnant growth in Europe, Africa and the Middle East.
Fettig also said in the statement,
"As we previously indicated, in a period of uncertain economic growth and consumer demand, we would be prepared to take the necessary actions in order to expand our operating margins and improve our earnings. Given the weakening global economic environment, we are today announcing aggressive plans that will result in substantial cost and capacity reductions. The plans are the result of a comprehensive global review of our operations, products and manufacturing facilities."
This is not the first major job cut announcement made in recent years, although it is larger than the 1,100 job cuts made two years ago when the company closed the Evansville, Indiana factory.
This plan reportedly will save Whirlpool $400 million annually for the next two years.
After the announcement reportedly shares dropped about 12 percent.
The company expects full-year profit of $4.75-$5.25 per share according to Reuters. This is down from earlier estimates of $7.25-$8.25 a share.
Whirlpool has been operational for the last 100 years and is celebrating its centennial through November.