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Bloomberg Business Week

html Bloomberg Electrolux to Shut Europe, North America Plants Amid Weak Demand November 16, 2011, 1:56 AM EST

Nov. 15 (Bloomberg) -- Electrolux AB, the worlds second- biggest appliance maker, will close factories in Europe and North America to cut costs amid weak demand. The shares fell the most in almost three months.

We have underutilized assets, as the whole industry does, Chief Executive Officer Keith McLoughlin said in an interview today during an investor presentation at the companys Stockholm headquarters. Were getting the suit size adjusted to our right weight.

Electrolux aims to save 5.1 billion kronor ($761 million) a year, compared with a previous target of 2.5 billion kronor, the washing machine maker said today in a statement. The shares fell as much as 9.5 percent, the biggest intraday decline since Aug. 18, and were down 7.9 percent at 111.5 kronor as of 11:43 a.m. in Stockholm.

The maker of AEG vacuum cleaners and Frigidaire refrigerators has suffered from the decline in consumer confidence in mature markets and increased raw material costs. Electrolux, which has about 35 plants, will close several of them, mainly in North America and Europe, McLoughlin said in the interview, declining to give further details.

Putting Off Spending

Electrolux, which trails rival Whirlpool Corp., said it will reduce staffing levels and improve purchasing. Sales volumes of household appliances sold in North America this year will probably be 25 percent lower than in the peak year of 2005, the company forecast. Volumes in western Europe will be 15 percent below the peak level in 2006.

When consumer confidence gets this low, they put off discretionary spending, McLoughlin said about U.S. consumers during his presentation.

In Europe, the question is not if its going to recover but when it will recover, he said. Our view is not in the next couple quarters. Its going to take some time.

Higher prices for materials such as steel, plastics and resins will probably cut 2 billion kronor from 2011 earnings and less than 1 billion kronor off 2012 profit, the company said.

McLoughlin, an American who became CEO at the start of the year, said Electrolux must continue to raise prices across the globe to boost revenue. It will raise prices in North America in January, the third increase in the region in nine months. In Europe it started raising prices as much as 7 percent in October, a move that wont have full effect until the first quarter of 2012, McLoughlin said.

McLoughlin succeeded Hans Straaberg, a Swede who shut 19 plants and moved part of Electroluxs production to lower-cost countries as part of an overhaul that began in 2004 and finished early this year.

Of the 2.6 billion kronor of new savings, 1.6 billion kronor will come from adjusting manufacturing capacity, while 500 million kronor will come from measures such as improved purchasing and another 500 million kronor from trimming staff, Electrolux said. Costs for closing the plants and reducing capacity will be about 3.5 billion kronor, the company said. Electrolux Major Appliances North America Appoints John Weinstock as Vice President, Marketing Effective August 22, 2011 Aug 18 11

John Weinstock will join Electrolux Major Appliances North America (EMA-NA) as vice president, marketing. Weinstock will oversee brand management, consumer insight-led innovation, and integrated trade and consumer marketing campaigns for major appliances in North America. He will report operationally to President and CEO of EMA-NA Jack Truong and functionally to, AB Electrolux Global Chief Marketing Officer Mary Kay Kopf. Weinstock spent almost 20 years in the consumer durables and packaged goods industries, most recently as vice president marketing, Home Appliances & Home

Entertainment for LG Electronics. He will relocate to Charlotte, NC and assume the vice president marketing role August 22, 2011. Electrolux Major Appliances North America Appoints Jack Truong as President and CEO Jul 1 11

Jack Truong is appointed new President and CEO of Electrolux Major Appliances North America and Executive Vice President of AB Electrolux, succeeding Kevin Scott, who will leave Electrolux after eight years with the company. Truong previously held the position of Vice President and General Manager, Global Construction and Home Improvement Division of 3M Company. Jack Truong has held this most recent role since 2009. Kevin Scott joined Electrolux in 2003 as Vice President and General Manager of the Consumer Services Group in Major Appliances North America. The changes take effect on August 1, 2011. Electrolux Home Products, Inc. Announces Voluntary Recall of Frigidaire and Electrolux ICON Electric Smoothtop Cooktops and Slide-In Ranges Oct 21 10

The U.S. Consumer Product Safety Commission, in cooperation Electrolux Home Products, Inc. announced a voluntary recall of the following consumer product. Consumers should stop using recalled products immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. Frigidaire and Electrolux ICON Smoothtop Electric Cooktops and Frigidaire Slide-in Ranges with rotary knobs and digital displays. Consumers should immediately stop using and unplug the recalled ranges or power off cooktops at the circuit breaker. Contact Electrolux for information on how to obtain a free repair kit.