Whirlpool to Enhance Italian Operations, Plans Job Cuts - Analyst Blog
Per sources, Whirlpool Corp. WHR intends to take ahead its restructuring plan, targeting to invest $535.25 million in Italian operations over a period of four years.
In a meeting with officials of the Italian government earlier this week, Whirlpool revealed its investment plans for the country. These are directed toward solidifying and securing the company’s position in the location.
As part of the four-year long investment plan, the company aims to enhance efficiency and capacity utilization in addition to integrating its production operations via additional research and development, and a specialized channel of factories.
Further, Whirlpool intends to shut down some of its sites and conduct about 400 job cuts, incremental to the 950 layoffs planned when the company announced plans to acquire Indesit in Jul 2014.
Whirlpool acquired a major stake in Italy’s Indesit in Oct 2014 and is now in the process of absorbing the latter’s operations. This acquisition was made with the intent to help Whirlpool solidify and maintain its foothold in the European appliances market, promising sustainable growth in the region.
Coming back to the Zacks Rank #3 (Hold) company’s meeting with the Italian officials, they expressed both the pros and cons of Whirlpool’s investment plans.
Per the Italian ministry, this investment will be beneficial for the nation as it will restore production from countries like China, Turkey and Poland back to Italy. According to sources, the manufacture of microwave ovens, that is currently taking place in China; the production of clothes dryers, currently taking place in Turkey, and the manufacture of cooking surfaces in Poland, will all move to different parts of Italy.
On the flip side, the planned layoffs are expected to hurt the country’s employment condition, which is already in the doldrums in certain regions owing to deindustrialization. While on the one hand, Whirlpool plans to cut about 800 jobs in Italy’s Naples, which is an area with the maximum number of jobless people, the company is likely to bring some respite to the country with the probable revival of production capacity.
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