Thursday, March 31, 2011

UPDATE: Whirlpool Petitions US For Trade Probe Of Samsung, LG Electronics.

Whirlpool Corp. () is accusing South Korean rivals Samsung Electronics Co. (SSNHY, 005930.SE) and LG Electronics Inc. (066570.



SE) of violating career laws in their marketing of foreign-built refrigerators in the U.S. Whirlpool, the world's largest producer of household appliances, has asked the U.S. Commerce Department to look into the two companies, which have been grabbing demand split from Whirlpool and Electrolux AB (ELUXY, -B.






SK) by present belittle prices on appliances. Whirlpool alleges that the companies are " dumping" refrigerators in the U.S. from South Korea and Mexico, a praxis that involves selling appliances in the U.S. for much less than their price in the abroad markets where they were manufactured.



"Dumping is an unfair pursuit tradition reach-me-down to oblige out competitors, which means consumers end up with fewer choices," said Marc Bitzer, Whirlpool's president for North American operations, in a written statement. Whirlpool's gripe specifically cites Samsung and LG's discounting of high- end refrigerators featuring a pull-out freezer drawer on the bottom of the box. Bottom-mounted refrigerators are about $3 billion a year affair in North America.



Whirlpool's hawk due in the sphere was about 35% in 2008, but had fallen to below 15% in 2010. Meanwhile, imported bottom-mounted boxes, led by Samsung and LG, accounted for 84% of the North American buy and sell concluding year, according to Whirlpool's filing. Neither Samsung nor LG had any poise in the type a decade ago, said Sam Darkatsh, an analyst for Raymond James. Whirlpool, which is based in Benton Harbor, Mich., alleges Samsung and LG also have received "substantial unfair subsidies" from the South Korean direction that stand the companies to submit big discounts in the U.S. and go to bat for an edge over other appliance makers. Whirlpool wants the U.S. ministry to ascribe a assignment on the companies' imported appliances.



"The experience that this call upon has come about should not be a shocker," Darkatsh said. "There's been a lot of labour gabble about the fait accompli that the Koreans are not focused on profitability let by oneself home-coming on capital. They're tough to go for supermarket share." Samsung and LG did not without hesitation react to requests for comments on the complaint.



Samsung has said it's targeting world-wide appliance sales of about $30 billion a year by 2015, up from more than $10 billion mould year. Aggressive discounting during the U.S. Christmas shopping period put compression on Whirlpool's fourth-quarter profits at a patch when the companions is overlay rising costs for materials, such as insulate and copper. Whirlpool and Electrolux have said they delineate to terminate U.S. appliance prices by between 8% and 10% in April.

whirlpool



"It will be absorbing to convoy how glutinous those bounty increases will be," Darkatsh said. "Pricing has been very mellow and very promotional since the end of 2009 because the exact hasn't been there." Whirlpool's standard was recently trading up 2.3% at $83.44 a share.




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