In an effort to enhance operational efficiencies,
) plans to relocate the production of its commercial front-load
washing machines from Monterrey, Mexico to Clyde in Ohio. The
production is expected to start from Apr 2014.
However, the company revealed that it will maintain its
Mexican plant and will add a new residential washer production
line. Furthermore, Whirlpool will maintain the current number of
employees at this facility.
The news generated optimism among investors, as was reflected
in the company's share price. The stock price closed at $155.28
on Dec 20, up approximately 1.2% from the earlier day's closing
price of $153.52. During the intraday trading hours, Whirlpool
shares rose to $156.57, close to its 52-week high of $156.69.
The recent move reflects the company's strategy of producing
items closer to the location where they are primarily sold.
Approximately 90% of Whirlpool's commercial front-load washing
machines are sold in the U.S., while the remaining 10% are
exported to Europe, Australia, Latin America and Asia. Moreover,
the relocation will facilitate Whirlpool in supplying the
products speedily while minimizing logistics costs and the need
to ship units across the border.
Whirlpool believes that the latest move will create 80-100 new
jobs in the Clyde facility during the next three years. It is
also expected to be a step toward boosting its earlier announced
commitment of spending $1 billion for expansion of manufacturing
facilities in the U.S. from 2010 to 2014.
Whirlpool's 2.4 million square-foot Clyde facility is the
world's largest washing machine plant and employs nearly 15,000
staff. The plant currently manufactures all of the company's
residential washers for the U.S. market including Whirlpool,
Maytag, Amana, Estate, Roper, Crosley, Admiral and Kenmore, as
well as Whirlpool's Canadian brand, Inglis.
Among home appliance manufacturers, Whirlpool is a renowned
name in the global market. Though the company might appear to be
mostly dependent on the North American region for its revenues,
it has been enhancing its presence in the fast growing Latin
American and Asian markets as well.
In August, Whirlpool entered into a deal to acquire 51% stake
in the leading Chinese home appliances manufacturer, Hefei
Rongshida Sanyo Electric Co. Ltd. The deal will help the American
multinational manufacturer and marketer of home appliances to
expand its footprint in China. The transaction is expected to
culminate by the end of 2014 and will become accretive in the
initial year of integration.
Further, Whirlpool's near-term growth prospects appear
) recent announcement of a positive outlook for the U.S. consumer
durable industry. Moody's declared that consumer durable
companies would witness a 5%-6% rise in operating profit in the
next 12-18 months owing to recovery in the U.S. economy, signs of
stability in the housing market and increased spending by
consumers. Apart from Whirlpool, other companies that will likely
benefit from these improved trends include
Leggett & Platt Incorporated
Over the last 101 years, Whirlpool has emerged the leading
manufacturer and supplier of major home appliances. It is
considered the largest home appliance manufacturer in the world,
ahead of Electrolux AB, LG, Samsung, General Electric Co. and
Haier Electronics Group Company Ltd. Moreover, the company is
placed among the major home appliance makers in India and
Currently, Whirlpool has a Zacks Rank #3 (Hold).
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