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CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 18, 1997
WHIRLPOOL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-3932 38-1490038
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(State or other jurisdiction (Commision File (I.R.S. Employer
of incorporation) number) Identification No.)
2000 M63 North, Benton Harbor, Michigan 49022-2692
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(Address of principal executive officers) (Zip Code)
(616)-923-5000
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Registrant's telephone number, including area code
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Item 5. Other Events
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On September 18, 1997, the registrant announced that it is taking several
significant steps to extend the company's global leadership position, as well as
to fundamentally change the economics of Whirlpool's business structure
worldwide. They include the following:
. Acquiring the majority interest in Brasmotor S.A., the company's
Latin American affiliate, for $217 million;
. Electing H. Miguel Etechenique, chairman and CEO of Brasmotor
S.A., to Whirlpool's Board of Directors;
. Selling the inventory and consumer financial business and certain
other assets of Whirlpool Financial Corporation, which will have
a positive impact of about 53 cents per share when completed;
. Eliminating about 4,700 positions in Asia, Europe and North
America, increasing efficiencies in European operations through
product consolidation and facility closings, while seeking
strategic alliances or other alternatives for two Chinese joint
ventures. A pre-tax charge of approximately $350 million will be
taken against third-quarter earnings, resulting in $180 million
of annual savings when fully implemented in year 2000.
Item 7. Financial Statements and Exhibits
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Exhibit 1
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Copy of a press release dated September 18, 1997 covering the Company's
recent announcement that several significant steps are being taken to extend
the company's global leadership position, as well as to fundamentally change the
economics of Whirlpool's business structure worldwide.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WHIRLPOOL CORPORATION
Registrant
Date: September 19, 1997 By: /s/ Daniel F. Hopp
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Name: Daniel F. Hopp
Title: Vice President, General
Counsel and Secretary
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Exhibit 1
Whirlpool Corporation Takes Significant Steps to Extend
Global Leadership Position and Improve Operating Performance
BENTON HARBOR, Mich. -- Sept. 18, 1997 -- Whirlpool Corporation (NYSE: WHR)
today announced several significant steps to extend the company's global major
home appliance leadership position, as well as to fundamentally change the
economics of its business structure worldwide. They include the following:
. acquiring the controlling interest in Brasmotor S.A., the company's Latin
American affiliate operations, for $217 million;
. electing H. Miguel Etchenique, chairman and CEO of Brasmotor S.A., to
Whirlpool's Board of Directors;
. selling the inventory and consumer financing business and certain other
assets of Whirlpool Financial Corporation, which will have a positive
impact of about 53 cents per share when completed; and
. eliminating about 4,700 positions in Asia, Europe and North America,
increasing efficiencies in European operations through product
consolidation and facility closings, while seeking strategic alliances or
other alternatives for two Chinese joint ventures. A pre-tax charge of
approximately $350 million will be taken against third-quarter earnings,
resulting in about $180 million of annual savings when fully implemented in
year 2000.
Whirlpool Chairman and Chief Executive Officer David R. Whitwam said, "We
have made outstanding progress over the last several years in building our
position as the global leader in the major home appliance business, with a
strong presence in North America, Europe, Latin America and Asia. We have
established the global reach and structure that our strategies outlined. Today,
we are taking steps to further refine and strengthen our global network, improve
our operating performance and align the organization with the marketplace
realities of our industry."
Acquires controlling interest in Latin American operations:
The company has reached a definitive agreement to purchase a controlling
interest in Brasmotor S.A. in Brazil. This transaction will involve the
purchase of approximately 33 percent of Brasmotor's voting shares, as well as
preferred or non-voting shares, now held by Bradesco, Brazil's largest private
bank.
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add one Whirlpool Takes Significant Steps
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The shares, combined with Whirlpool's existing 33 percent voting share holdings
in the company, extend Whirlpool's position to 66 percent of Brasmotor's voting
shares. The purchase price for the transaction totaled $217 million.
Brasmotor S.A. is the holding company that controls Multibras S.A.
Eletrodomesticos, an approximately $2 billion appliance company with the leading
market share position in Latin America, and Embraco, the world's second largest
hermetic compressor manufacturer, which supplies compressors to the leading
manufacturers of refrigeration systems worldwide, including Whirlpool and
Multibras S.A.
According to Whitwam, the purchase of controlling interest in Brasmotor
S.A. is an "important step in further integrating the Latin American businesses
into Whirlpool's global strategy and strengthens Whirlpool's position throughout
the region." Latin America is expected to have high growth in the major
appliance industry well into the next century.
"For the past 40 years, we have relied on Miguel Etchenique's leadership as
chairman and CEO of Brasmotor to create this successful venture and will
continue to do so going forward. We deeply value our partnership and think this
is the next logical step to remain competitive. This is especially true given
the changing landscape within the industry, such as the increased competition
from other global players in the region."
H. Miguel Etchenique elected to Whirlpool Corporation Board of Directors:
Whirlpool Corporation's board of directors expanded to 13 members with the
election of H. Miguel Etchenique to a board seat effective December 1997.
Etchenique is also chairman of the board and CEO of Brasmotor S.A.
"Miguel has developed Brasmotor S.A. into the leading white goods
manufacturer in Latin America," said Whitwam. "Whirlpool will benefit from both
his insight and leadership in the home appliance industry, especially as we move
to more fully integrate our Latin American operations. "
Etchenique also serves as a member of the International Council of J. P.
Morgan, as well as a director of a number of major Brazilian corporations and
business associations. He holds an industrial engineering degree from the
University of Maryland and resides in Sao Paulo, Brazil.
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add two Whirlpool Takes Significant Steps
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Refines execution of Asian strategy:
The company is exploring strategic alliances and other alternatives for two
of its Chinese appliance joint ventures: Beijing Whirlpool Snowflake Electric
Appliance and Shenzhen Whirlpool Raybo, which manufacture refrigerators and air
conditioners, respectively. In addition, the company will reduce regional costs
by integrating most of the support activities into a broader global network and
will realign its sales organizations. These actions will be included in the
charge.
"These refinements will reduce the cost structure, are currently expected
to improve the region's business performance to a profitable level in 1998 and
allow us to build a more focused business foundation for this important region,"
said Whitwam. "We are committed to doing business in China, and in the future,
Whirlpool will focus its manufacturing efforts on two remaining Chinese joint
ventures, Whirlpool Shanghai Narcissus, which produces laundry equipment, and
Whirlpool Shunde SMC, which manufactures microwave ovens."
"The remaining majority-owned joint ventures in China, along with a
successful sales subsidiary in Hong Kong, will be the core of our mainland
Chinese operations going forward. With these Chinese operations, Whirlpool of
India and our highly competitive sales companies and distributors throughout the
region, Whirlpool will have a solid business portfolio in Asia poised to create
value in the short and long term," added Whitwam.
Fundamentally changes cost structure:
The charge of approximately $350 million will include the elimination of
approximately 4,700 positions throughout North America, Europe and Asia, through
the consolidation of various manufacturing, service and support activities and
facilities, and the disposition of certain non-performing assets. The company
currently employs about 46,000 worldwide.
The after-tax cash cost of about $180 million will be spent primarily in
1998 and 1999, and will result in annualized savings of about $180 million when
fully implemented in year 2000. The charge will have a $3.38 per share negative
effect against 1997 third-quarter earnings. Approximately one-half of the
charge will be for European activities; another third will apply to activities
in Asia, with the balance associated with North American actions.
"While difficult, these changes are necessary to reach the level of
operating performance our employees, customers and shareholders expect. We
won't be releasing any more details until we have had an opportunity to explain
them more fully to our employees and other appropriate parties," said Whitwam.
"These actions align Whirlpool cost structures with its business requirements,
the competitive realities of the home appliance industry worldwide and our
commitment to improving shareholder value."
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Moves to create more strategic opportunity for the Whirlpool Financial
Corporation business (WFC):
Whirlpool has reached an agreement to enter into a strategic partnership
with Transamerica Corporation to provide financing services to Whirlpool's trade
partners and customers. As part of this move, Whirlpool will sell the inventory
and consumer financing business of WFC, its financial subsidiary, to
Transamerica for approximately a 14 percent premium on book value. In
addition, the company will be selling the majority of WFC's aerospace business
and providing a reserve for the remainder of that portfolio. These transactions
will generate after-tax proceeds of approximately $1.6 billion, or about $300
million after repayment of debt, and have a positive impact of about 53 cents
per share when completed.
Whitwam said, "This transaction gives the WFC business more flexibility for
future growth as part of a financial services company, while maintaining an
ongoing strategic relationship with Whirlpool through Transamerica."
The WFC and Latin American transactions, which are pending appropriate
governmental approval, are expected to be completed in the fourth quarter of
1997.
Whitwam concluded, "The important and strategic decisions announced today
will better position the company for improved business performance in the short
term and strengthen the company's capacity to continue to grow its global
leadership position in the future."
Whirlpool Corporation is the world's leading manufacturer and marketer of
major home appliances. Headquartered in Benton Harbor, the company manufactures
in 13 countries and markets products under 11 major brand names in about 140
countries.
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North America Europe Latin America Asia
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Christopher Wyse Nick Miles Rodolfo Guttilla Lynne Reaves
616-923-3417 39-332-758-195 55-11-3039-5563 8-522-845-1008
