Whirlpool Struggles, Despite Massive Leg Up From US Government
US appliance maker Whirlpool who have recently been given a massive leg up by the US Government at the expense of Samsung and LG is still struggling to compete as US consumers prefer the Korean made product over the local offering.
The US Company overnight posted a steep slowdown in sales for the fourth quarter and its full-year profit forecast fell short of market expectations as the home appliances maker struggles to be competitive.
Whirlpool posted a loss of $268 million for the fourth quarter, compared with a profit of $180 million a year earlier.
In response to the US decision to introduce tariffs on imported appliances LG Electronics announced overnight that they are planning to raise prices on some of its washer and dryer models in response to President Trump’s decision.
At CES where the issue was discussed a Samsung executive said, “The only problem is Whirlpool has been unable to innovate and consumers can clearly see that both Samsung and LG have superior offering when it comes to appliances”.
LG said that they will raise the published retail prices on some of its laundry appliances by about $50.
“The penalties were more severe than recommended by the International Trade Commission, and we’re making some adjustments,” an LG spokesman told the Journal.
John Taylor, senior vice president for government relations at LG Electronics USA, said the Trump administration’s “penalties are not justified.”
Tariffs were imposed despite the LG’s plans to build factories and its corporate headquarters in the United States.
The tariffs could hamper those plans, he said.
A big problem for Whirlpool is that they are struggling to buy raw products such as steel as competitive as LG or Samsung.
To offset the higher material costs, Whirlpool had said in October it would raise prices on come products through the fourth quarter and current quarter, which is expected to impact more than half of its business.
Whirlpool, products include laundry appliances, refrigerators and cooking appliances. In Australia the company is looking to expand their presence in 2018.