Electrolux is cutting 2,000 jobs overseas as it deals with a tough economic climate in Europe, but the company said its North American results are strong and its Charlotte operations won’t be affected.
“Electrolux North America continues to deliver strong sales and earnings growth, while Europe continues to suffer from weak demand,” said CEO Keith McGloughlin, in a statement. The company was also hurt by currency fluctuations that lowered its earnings compared with a year ago.
The Swedish appliance maker’s North American headquarters are in Charlotte. The planned job cuts will mainly affect workers in the country’s major appliances division outside the U.S., Electrolux said.
Third-quarter sales were basically flat at the company, up less than 1 percent from the same period last year, to $4.3 billion. Profits for the quarter fell 29 percent, to $103 million.
The company said its sales in North America were up 8 percent, to $1.3 billion. Demand, a measure of the number of units shipped, was up 12 percent for major appliances compared with last year, the company said. Profits rose 11 percent, to $86 million.
In Europe, on the other hand, demand for major appliances was down 1 percent, and sales fell less than 1 percent.
Jack Truong, CEO of Electrolux North America, said the company has marketed its products more effectively as packages, encouraging people to replace a whole kitchen at once instead of a broken refrigerator.
“That was a big shift in our marketing,” said Truong. Electrolux products include Frigidaire appliances and Electrolux-branded goods.
Truong said the economy is unleashing pent-up demand from the recession. Based on the company’s internal projections, Truong said Electrolux had expected consumers to replace many old appliances in 2010 and 2011. Instead, he said consumers waited it out and are now starting to buy them.
“That’s kind of a replacement cycle backed up into the end of 2013,” said Truong.
And the company said a still-improving housing market caused it to raise its forecast for the increase in major appliance shipments to the U.S. from 7 percent to 9 percent compared with last year.
“The growth in new home construction will continue to have very good momentum,” said Truong.
Electrolux employs about 900 people in Charlotte, Truong said, and is still expanding.
Electrolux is also opening a research and development facility for its laundry products next month in Charlotte, which will employ about 100 people, Truong said.
Portillo: 704-358-5041 On Twitter @ESPortillo
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