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Whirlpool to close washing machine plant in Shanghai

By Wang Ying (China Daily)
Updated: 2009-04-10 07:49

Appliance maker Whirlpool is closing its Shanghai washing machine plant and eliminating 600 jobs as part of its consolidation efforts in the Chinese market.

In a statement, Whirlpool said the closure was due to market changes and washing machine production will now be moved to the Hisense-Whirlpool joint venture facility in Changxing Economic Development Zone, Zhejiang province.

"The consolidation of washing machine production will help optimize the use of existing resources and generate a higher cost efficiency," the company said.

By the end of 2009, the Zhejiang production base, which also manufactures refrigerators, will create 900 new jobs.

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Whirlpool said it would abide by the Chinese Labor Law and provide support to the laid off employees.

"The company will give full respect to these employees, and try its best to provide them with a reasonable remedy, higher than the nation's standard," said Whirlpool in its email reply to China Daily.

The supportive measures include recommending the employees for related job opportunities and providing them with expert advice on social welfare, medical insurance, occupational training etc, it said.

"This consolidation, like other changes we've made as part of our global operating strategy, is difficult but necessary, to ensure that Whirlpool Corporation maintains its leadership position in today's changing global marketplace," said Paulo Periquito, president, Whirlpool International.

Periquito stressed that Whirlpool saw great potential in the Chinese market.

"We believe these moves will enable us to speed up innovation and continue to build the best quality and best cost products for our customers in China," he said.

"International companies like Whirlpool will have suitable solutions like internal transfers to help the affected employees," said Freedom Zhu, marketing director, Randstad HR Solutions, a staffing services provider.

Prior to the economic crisis, Whirlpool's market share in China saw a consistent increase over the last two years. Its washing machine market share in China increased from 3.4 percent in April 2008, to 6.2 percent in February this year, according to figures from market research organization GfK China.

Research from China Market Monitor Co Ltd showed Whirlpool was one of the only two washing machine producers that had a significant increase in market share over the past quarter.

Whirlpool's China regional headquarters, a research and development center, and its commercial and administrative operations are unaffected by the change, and will remain located in Shanghai. These operations employ about 480 people, according to Whirlpool.