Whirlpool accuses Samsung, LG of dumping washers

Fri Dec 30, 2011 3:42pm EST

Related Topics

(Reuters) - Whirlpool Corp (WHR.N) on Friday accused two South Korean rivals, Samsung Electronics (005930.KS) and LG Electronics (066570.KS), of dumping washing machines in the United States by selling them "at substantially less than fair value."

The action comes as the company's shares have slid more than 46 percent this year because of by weak demand resulting largely from high unemployment and a depressed housing market.

It filed petitions with the U.S. Department of Commerce and the U.S. International Trade Commission seeking an investigation into its rivals' clothes washers, which are made in South Korea and Mexico.

Whirlpool accused them of "dumping" the products to gain market share, or selling them in the United States at prices lower than the sale price in the country they were made or lower than the cost of production.

It found some success with similar complaints earlier this year, when the Commerce Department said in a preliminary decision that Whirlpool's foreign competitors had sold certain refrigerators at unfair prices in the United States.

On Friday, Whirlpool also alleged that South Korea is unfairly subsidizing washing machine exports, in violation of international trade law.

"When foreign manufacturers are permitted to dump products into the United States, it undermines competition," Whirlpool North America President Marc Bitzer said in a statement.

An LG spokesman said the company is reviewing the petitions and "strongly rejects" any suggestion that it sold clothes washers at dumped prices.

A Samsung representative had no immediate comment.

ECONOMIC SQUEEZE

Stubbornly high unemployment in the United States and the weak housing market have diminished demand for big-ticket items like dishwashers and refrigerators.

In October Whirlpool said it would cut 5,000 jobs, or about one-tenth of its global workforce.

The company's shares fell 8.9 percent earlier this week, when Sears Holdings Corp, one of its top retailers, announced it would close as many as 120 of its Kmart and Sears discount and department stores because of slumping sales.

Last year Whirlpool derived 8 percent of its sales through Sears.

On Friday Whirlpool, which makes its clothes washers at a plant in Clyde, Ohio, said it filed its petitions after conducting an "exhaustive review" and had found "compelling evidence" that Samsung and LG dumped their products in the United States.

According to the complaint, for example, one Samsung model, a 3.7 cubic foot top-loading washer, had a wholesale price in the United States of $363.18, but a slightly smaller Samsung model of 3.6 cubic feet sold wholesale in South Korea for $666.86. The former, Whirlpool estimated, cost $751.46 to make.

Whirlpool filed a similar petition in March about certain refrigerators sold by its foreign competitors.

In October, the Commerce Department issued a preliminary decision on that petition and found the companies had sold bottom-mount refrigerators -- those with freezers below the refrigerator -- at unfair prices in the United States.

The government then imposed potential duties of up to 37 percent on the refrigerators. The finding forced the foreign manufacturers to post bonds as security for future payment if they didn't raise wholesale prices to a fair value.

A final decision on an duties is expected in March.

The Commerce Department did not find a Korean subsidy for the products, a complaint Whirlpool had also made.

(Reporting By Phil Wahba and Aruna Viswanatha; Editing by Mark Porter, Gunna Dickson and Steve Orlofsky)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (2)
madaboutthis wrote:
Sure Whirpool, you make the crappiest washer/dryer in the land. I purchased a Whirlpool duet 4 years ago before I had to replace them. Spent nearly $2,000 and the washer’s drum shook the house like mad and began leaking. The quality is absolutely horrible. With Samsung, let me tell you the price of their top line machines are comparable to Whirlpool’s. Spent $3,000 for the Samsung and the Wirlpool’s was priced at about $200 less basically at the same price level with a few more features.

And how about the Maytag’s OMG how aweful! I don’t think it is about dumping, it is about QUALITY and CUSTOMER SERVICE and Whirpool you lack both! Sure I would love to buy American but I am not going to purchase any major appliance no matter who makes it and have it break down in 3-4 years and I have heard less than that!

Dec 30, 2011 1:50pm EST  --  Report as abuse
SVargas wrote:
I agree. Make better products and quit filing frivolous lawsuits.

Dec 30, 2011 3:15pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.