15511 Tue, 10/28/2008 - 1:05pm
BENTON HARBOR, Mich.–Whirlpool will cut its global work force by about 5,000 by the end of 2009 as the company struggles with declining profits and rising costs.
The appliance giant’s third-quarter net income fell 7 percent to $163 million, driven by reduced unit sales throughout the world and higher raw-materials and oil-related costs. Global dollar sales actually increased 0.1 percent to $4.9 billion due to a rise in average selling prices. In North America, however, third-quarter sales took a 7 percent dive to $2.7 billion as shipments dropped 11 percent.
The work-force cuts include jobs that have already been lost due to plant closures since January, plus new reductions that will take place through the end of next year. Since January, Whirlpool had announced the closings of four plants in Mississippi, Tennessee and Mexico, which took away about 2,000 jobs. Going forward, the company will eliminate about 500 salaried positions in North America, including both full-time and contractor jobs; and will cut about 1,900 jobs internationally, with the majority of these based in Europe.
In a Whirlpool statement, Jeff Fettig, chairman and chief executive officer, cited the “declining demand and record levels of cost inflation” during the third quarter. The job cuts should save Whirlpool about $275 million on an annualized basis, Fettig said.