Whirlpool Corporation Company Background

Latin America

Another market promising attractive growth in appliances was Latin America, once these countries could emerge from decades of political instability, economic mismanagement, and hyperinflation (Exhibit IC2-2). Indeed, much of this was happening in the 1990s, accompanied by efforts to lower tariffs, which wouid stimulate trade. In 1994, the white goods industry in Latin America comprised about 65 com¬petitors. Whirlpool expected appliance shipments to expand at a faster pace than in North America and Europe.8

WHIRLPOOL CORPORATION Company Background

In early 1996, Whirlpool Corporation, headquartered in Benton Harbor, Michigan, was one of the world's leading manufacturers and marketers of major home appliances. The company's plants were located in 12 countries, and it distributed its products in over 140 countries under 28 brand names (see Exhibit IC2-3). Fifteen years earlier Whirlpool executives had perceived the world primarily as consisting of the U.S. and Canadian markets, with some marginal sales in Latin America and limited export opportu¬nities. However, the company had transformed itself and now recognized that the world encompassed four major regions: North America with 46 million units sold annually (1994) consisting of Canada, Mexico, and the United States; Europe with 50 million units (Western, Central and Eastern Europe, Africa, and the Middle East); Asia with 56 million units; and Latin America with 17 million units (the Caribbean, and Central and South America).

Located 2 hours by car from Chicago, Whirlpool was founded in St. Joseph, Michigan, in 1911 as the Nineteen Hundred Corporation. At the time, it was producing motor-driven wringer washers under the name Upton Machine, with the hope of selling them in quantities to large distribu¬tors. In 1916, the first order from Sears, Roebuck and Co. marked the beginning of an enduring relationship with Sears, which became its oldest and largest customer, repre¬senting 20% of Whirlpool's 1995 sales. In 1948, the Whirlpool brand automatic washer was introduced. This established the dual distribution system—one product line for Sears, the other for Nineteen Hundred. The Nineteen Hundred Corporation was renamed Whirlpool in 1950, and automatic dryers were added to the company's product line. In 1955, Whirlpool merged with Seeger Refrigerator Co. of St. Paul, Minnesota, and the Estate range and air condi¬tioning divisions of R.C.A. In 1957, Whirlpool entered the foreign market through the purchase of equity interest in Multibras S.A. of Sao Paulo, Brazil, later renamed Brastemp S.A. In 1967, Whirlpool was the first competitor in the industry to take advantage of AT&T's new 800-number ser-vice and created the Cool-Line Telephone Service, which provided customers a toll-free number to call for answers to questions and help with service.

In the mid 1980s, the limited growth potential of its established markets motivated Whirlpool to undertake a major examination of the industry.