Whirlpool to close plants and slash workforce by 6,000

The world's biggest home appliance maker said yesterday it would close plants and cut its workforce by 10 per cent as part of a $350m (£240m) revamp. Whirlpool, which reported $10bn sales last year, said the cost of materials in Europe was partly to blame.

The world's biggest home appliance maker said yesterday it would close plants and cut its workforce by 10 per cent as part of a $350m (£240m) revamp. Whirlpool, which reported $10bn sales last year, said the cost of materials in Europe was partly to blame.

The washing machine maker, based in Michigan, said fourth-quarter earnings would fall 50 cents short of expectations, and announced more than 6,000 job cuts worldwide.

Its shares plunged 10 per cent in mid-morning trading in New York as the company said it would reel in operation expenses by $100m. The troubles are tied to the increasing cost of raw materials in Europe and a slowdown in production, said a spokesman, adding that shipments of clothes washers and refrigerators slipped 8 per cent compared with last year.

"There has been a 5 per cent increase in cost of materials in Europe. There our European suppliers are linked to Asia which has had an increase in demand for material," said the spokesman. Whirlpool had raised its prices as a result. "But our executions have been all wrong. Our sales reactions and the slowing down of production was not right," he said.

David Whitwam, the chairman and chief executive, said in a statement: "Despite our aggressive actions during the last several months, we continue to face industry and economic conditions that have led to intensified price competition, rising material costs, and slowing or declining demand."

Whirlpool is the latest of a slew of companies reliant on consumer spending to report that fourth-quarter sales would be lower than expected. Computer companies Compaq, Gateway, Apple and Hewlett-Packard have issued warnings.