Whirlpool to Eliminate 4,500 Jobs

Whirlpool North America Division President David Swift speaks during a news conference, Wednesday, May 10, 2006, in Newton, Iowa. Whirlpool Corp. announced Wednesday that it will close its Newton Maytag headquarters and manufacturing plant in October of 2007. (AP Photo/Charlie Neibergall) (Charlie Neibergall - AP)

Whirlpool said it will cost an estimated $135 million to $145 million for severance payments or relocation expenses for administrative employees under the consolidation. No estimate was available on manufacturing job elimination costs. Non-employee costs will be about $30 million, the company said.

"We knew that they were going to make some changes and today was probably the beginning of the process," said Eric Bosshard, an analyst with FTN Midwest Securities Corp.

Expect Whirlpool to continue evaluating the performance of the combined companies and to make any necessary adjustments down the road, he said.

Whirlpool paid about $1.7 billion in cash and stock to buy Maytag on March 31. It also assumed about $900 million in Maytag debt that boosted the total value of the transaction to about $2.6 billion. Chinese appliance-maker Haier America had offered $1.28 billion for Maytag, but it was withdrawn when Whirlpool made a higher bid.

Maytag, an independent company since 1893, then became a subsidiary of Whirlpool.

The combined company has more than 60 manufacturing and research centers around the world. Whirlpool has 26 manufacturing plants in North America, and the company said it will evaluate all of them to determine the most efficient way to do business.

David L. Swift, president of Whirlpool North America, said in a statement the Ohio factories are "two of the most efficient facilities in the world, with capacity to grow."

He said the decision was difficult for the company, but necessary to improve its cost efficiency.

Whirlpool shares fell 92 cents to close at $92.17 on the New York Stock Exchange, where they have traded in a 52-week range of $60.78 to $96.08.

___

Associated Press Writer Tom Krisher in Detroit and AP Business Writer David Pitt in Newton, Iowa, contributed to this report.

___

On the Net:

Whirlpool Corp.: http://www.whirlpool.com