(Stockholm, Sweden-AP, October 21, 2003) Electrolux AB, the world’s largest maker of household appliances, posted a 38 percent decline in third-quarter profit largely because of a drop in demand and fluctuating exchange rates.
The Swedish company also said Tuesday it was considering closing a production plant in Greenville, MI and moving its operations to Mexico as a way to trim expenses.
Electrolux said it would consider closing the Michigan refrigerator plant and laying off its 2,700 workers. If it does close the factory, it would likely cost the company 1.2 billion kronor ($153.9 million). The company said it was in talks with unions there, but offered no timeline.
Electrolux earned 767 million kronor ($98.4 million) in the July-September quarter, down from 1.2 billion kronor in the same period a year ago.
Sales for the quarter fell 4.3 percent to 30.3 billion kronor ($3.8 billion) from 31.7 billion kronor a year earlier.
Shares of Electrolux were down 7.3 percent to 165.5 kronor ($21.23) in midday trading on the Stockholm Stock Exchange.
The Stockholm-based manufacturer, whose brands include Frigidaire, Electrolux and Weed Eater, said sales in Western Europe were steady but rose in Eastern Europe and Britain, as well as the United States. Demand for appliances elsewhere, including Brazil, India and China, fell.
The company said while it saw strong growth for appliances and outdoor products in North America, it saw substantially lower income for floor-care products and food service equipment.
In December 2002, Electrolux said it would cut more than 5,000 jobs through 2004, and close some plants in the United States, China, Australia and India.
To date, it has eliminated 4,330 workers, and employs more than 78,000.
For the rest of the year, Electrolux said market demand for appliances would likely be flat, or increase slightly in Europe and North America, but down in Asia.
It also expected the weakening of the dollar to effect its income.
“The operating income for the full year is expected to be somewhat lower than in 2002, excluding items affecting comparability,” Electrolux said.
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