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Whirlpool sinks 3,200 jobs
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January 13, 1998: 9:51 a.m. ET
Firm sees results in line with estimates despite final phase of restructuring
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NEW YORK (CNNfn) - Whirlpool Corp. on Tuesday said it will take a charge against fourth-quarter 1997 earnings to restructure its Latin American operations and cut 3,200 jobs, mainly in Brazil.
The world's second-largest home appliance company said the charge for the Brazilian subsidiary will be about $44 million pretax, or $31 million after-tax.
When fully implemented, it is expected to result in annual after-tax cost savings to the Brazilian subsidiary of about $45 million. Whirlpool also estimated the moves will result in annual savings of $20 million, or 26 cents a share, for the parent company.
"These moves...deal with the realities of the environment that we face in the region," Whirlpool chairman and chief executive David R. Whitwam said in a statement.
The charge follows Whirlpool's recently completed purchase of a majority voting interest (66 percent) in Brasmotor S.A., the holding company that controls Multibrás S.A., the largest appliance company in Latin America.
Based on Whirlpool's ownership position, the financial impact of the charge to Whirlpool totals $14 million, or 19 cents per share. Whirlpool will consolidate Latin American financials in the fourth quarter of 1997, based on its increased ownership position.
The job reductions represent about 25 percent of the Brazilian appliance work force.
The action in Brazil is the final step in Whirlpool's global restructuring announced in September 1997. The restructuring, for which initial planning began earlier in 1997, will be largely completed by the end of the first quarter of 1998.
The company also said Brasmotor group released preliminary unaudited earnings for both the fourth quarter and full year 1997. Fourth quarter and full year 1997 earnings for Whirlpool's share of the Brazilian subsidiary are expected to total $22 million and $78 million respectively, excluding the one-time charge. Fourth quarter and full year 1996 earnings were $24 million and $92 million respectively.
Whirlpool also indicated that its total consolidated fourth quarter and full year 1997 earnings will be released in early February.
Whitwam said that though audited earnings for both the fourth quarter and full year 1997 are not yet available, he expects them to be in line with recent analyst expectations, and to exceed last year's earnings by roughly 35 percent.
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Whirlpool
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