Whirlpool Corp., battered by price competition on home appliances, asked the U.S. government Friday to impose duties on imports of residential washing machines made by South Korean rivals Samsung Electronics Co. and LG Electronics Inc.
That marks the second time in 2011 that Whirlpool has sought to use U.S. trade laws to protect itself from imports. In March, the company sought duties on imported refrigerators.
Maps
Benton Harbor, MI, USA
Whirlpool, based in Benton Harbor, Mich., and the world's biggest maker of appliances, in its latest trade move accused the two Korean companies of "dumping" washers made in Korea and Mexico into the U.S. market at prices below their production costs. Whirlpool also said its rivals benefit from various Korean government subsidies.
An LG spokesman in the U.S. had no immediate comment. Samsung representatives couldn't be reached immediately for comment.
Whirlpool needs to take whatever steps it can to defend itself from increasingly tough Korean competition amid sluggish U.S. demand, said David MacGregor, an analyst at Longbow Research in Cleveland. But he said he doubted duties would cause a major decline in Korean sales and that they might help persuade LG and Samsung to set up U.S. manufacturing, making them even more competitive. LG and Samsung have done well in the U.S. by offering high-quality appliances with innovative designs at "very aggressive" prices, MacGregor said.
Whirlpool makes washers at a plant in Clyde, Ohio, and said it recently began bringing back to that plant some front-load washers it had been producing in Germany and Mexico. But, the company said in its petition to the government, unfairly priced imports have wiped out profits on that production in Clyde, "to the point where Whirlpool's ability to maintain its commitment to expanded U.S. production is very much at risk."
LG and Samsung sold tens of thousands of washers at deep discounts, sometimes as much as 50 percent, during the recent Black Friday sales period, Whirlpool said. Whirlpool tried to limit its Black Friday promotions this year and ended up losing market share, it said.
Imports of all makes of residential washers, excluding miniature models, accounted for about 34 percent of the U.S. market in this year's first nine months, up from 28% for 2008 as a whole.
"Samsung and LG have relied on a protected, high-priced South Korean home market for appliances to support their export ambitions," Whirlpool alleged.
In late October, Whirlpool said it would eliminate 5,000 jobs, or 7 percent of its global work force, and close a refrigerator plant in Fort Smith, Ark. Once that plant is closed, Whirlpool will be left with eight manufacturing sites in the U.S.
In its earlier trade case filed last March, Whirlpool sought import duties on certain types of "bottom-mount" refrigerators, ones with the freezer section at the bottom, made by the same Korean companies in Korea and Mexico. The U.S. Commerce Department in October said in a preliminary finding that duties of as much as about 37 percent could be applied on those refrigerators, subject to further government reviews. Samsung and LG have denied they were selling the refrigerators at prices that would violate U.S. trade laws, and they are likely to press for smaller duties.
Whirlpool makes washers under the Whirlpool, Maytag, Roper, Estate, Admiral, Amana, and Crosley brands in the U.S., and also makes store-brand washers for some retailers. Whirlpool said it believed it accounts for 95 percent of all large residential washers made in the U.S.
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