By Sarah Falson
BENTON HARBOUR: Whirlpool Corp has announced it plans to sell its iconic vacuum brand, Hoover, to Asia’s Techtronic Industries Co. for $US107 million ($A136 million) by the end of the first quarter of 2007.
Whirpool decided to sell the vacuum cleaner business, which was acquired as part of a $US1.7 billion buy-out of Maytag earlier this year, so it could “focus on its core appliance business.”
The Australian Hoover floorcare business – Hoover Floorcare Asia Pacific – is expected to transfer ownership to Techtronic Industries – which also makes Dirt Devil and Regina vacuums in the US and Vax in the UK.
Techtronic said it sees Hoover as a good fit for its business and will invest to “heavily invigorate the brand.”
"Hoover is a high-end brand and a commercial brand, and that’s exactly where we are going in the future," said Techtronic chief executive – global floor care, Joseph Galli Jr.
The 98 year-old Hoover business currently has manufacturing plants in Ohio, Texas and Mexico in the US, but industry analysts expect the new owners to move Hoover manufacturing overseas.
A workers union based in North Canton, called the International Brotherhood of Electrical Workers, feared the same outcome, and hired consultants to help find investment partners to work with the team and bid for Hoover.
The union, which represents Hoover’s 800 factory workers, was unsuccessful. Meanwhile, Techntronic’s senior portfolio manager, Mirko Mikelic, told Reuters: “We just need to bring down costs for Hoover. Hoover has a lot of brand value, but it’s been losing market share."
Hoover sales are currently sitting at around $US600 million to $US700 million, which is down from $US850 million a few years ago.