By Sarah Falson
SWEDEN: Electrolux has posted its fourth quarter 2006 sales results which reveal that, mid-way through the company’s recent staff-culling venture, including 525 Australian employees, the world’s second-largest whitegoods manufacturer is fighting fit.
According to a report from Bloomberg, the company’s profits are in fact twice as large as analysts had estimated, driving Electrolux AB’s stock to its deepest gain in two decades.
Net income for the period was 1.44 billion kronor (approximately $263 million), compared with 440 million kronor the year earlier. Analysts had predicted a profit of only 849 million kronor for the period.
The company has been rapidly cutting development costs in a bid to save 3.5 billion kronor annually by 2010, amid competition from rivals such as LG, based in South Korea.
Electrolux CEO Hans Straberg moved half of the company’s production to Poland and Mexico to reduce labor costs after Whirlpool Corp. took market share.
The company also closed at least 17 factories around the world resulting in the loss of more than 20,000 jobs.
“Closures include washing-machine and dishwasher plants in Australia, an AEG-brand site in Nuremberg, Germany, and a factory in Greenville, Michigan. The latest closure concerns a cooker plant in Denmark, where 150 jobs will go,” Straberg told Bloomberg today.
“Factory closures are a moving target,” Straberg said, although he declined to specify which other plants are at risk.
According to Bloomberg, Straberg said that the new, cheaper sites have performed better than expected.
In September last year, Electrolux in Australia announced it would phase out 500 jobs over the ensuing 18 months, by closing two factories in Adelaide which manufactured dishwashers, washers and dryers. Two months later, the company axed another 25 staff as it phased out electric cooktop production in Adelaide.