The machine ZANUSSI ZCN85X is illustrated in the figures but typically it
can comprise a drum mounted on a shaft in bearings so as to be rotatable
on a horizontal axis within a liquid containing inox cylinder which is
suspended by means of cooperating springs and dampers within an outer
cabinet. A AC electric drive motor of the INDUCTION-type is secured to the
liquid containing cylinder and is drivingly connected by means of a `V`
or multi-V belt-drive system to a pulley wheel secured to the drum shaft
outside the liquid cylinder. The system is such that the drum is
rotated at a speed below the motor speed and in a fixed relationship of
say 1:18 or thereabout. Liquid may be supplied to the cylinder through
an electromagnetically actuated inlet valve and removed by an electric
motor-driven pump. Liquid in the cylinder may be heated by an electric
sheathed wire heating element mounted in a lower wall of the cylinder,
the heating element being disposed within the cylinder.
In
operation of the washing machine its various functions are sequentially
controlled by a program controller comprising a synchronous electric
timer motor actuating, via a stepping linkage, a number of cams and
hence switches which control the supply of electrical power to the
various parts of the machine in sequence so as to cause a particular
program of operations to be performed on clothes placed in the drum, and
a solid state switching circuit, also controlled by the timer motor for
the drive motor of the machine, which controls the wash speed and spin of the drum motor.
Zanussi was an Italian producer of home appliances
that in 1984 was bought by Electrolux . Zanussi is a leading brand for
domestic kitchen appliances in Europe. Products have been exported from
Italy since 1946.
The Zanussi Company began
as the small workshop of Antonio Zanussi in 1916. The
enterprising 26-year-old son of a blacksmith in Pordenone in
Northeastern Italy began the business by making home stoves and
wood-burning ovens.
After his father death in 1946 “Lino Zanussi” became the President of the company.
In the early 1970s Zanussi sold a lot in the UK and for some time after under the “
Zoppas”
brand, name which had been acquired, making Zanussi the first
largest Italian appliance maker. They also produced washing
machines Hotpoint for Hotpoint at this time which were very
reliable and highly rated by users and engineers.
In the
late 1970s and into the early 1980s the company had a range of
washing machines which used an induction motor with a clutch
pulley system. Again this range proved extremely popular and
very reliable.
During this period Zanussi Professional,
the catering range of appliances for commercial use, became a
separate division in its own right.
In the early 1980s
Zanussi launched the Jetsystem washing machine range to great
acclaim whilst at the same time running the “Appliance Of
Science” advertising campaign which is acknowledged as one of the
most successful marketing campaigns of all time, in fact
still remembered by many today. This gave the brand the
impression of being forward thinking and innovative.
Zanussi
has recently been rebranded as Zanussi-Electrolux in line
with many other Electrolux brand names. Since that time many
Zanussi appliances share common components and parts with the
rest of the Electrolux range, primarily Electrolux, Tricity
Bendix and AEG although it is worth noting that the “John
Lewis” branded machines sold by the John Lewis Partnership in
the UK are effectively rebranded Zanussi appliances.
In
the late 1980s Zanussi launched the split tank design known as
the “Nexus Tub” design which endures to this day with little
change. The tub, base and certain other parts are made from a
plastic material known as “Carboran” which can be re-used
several times if recycled. To this day neither Zanussi or
Electrolux has provided any way to return this material for
recycling purposes.
Up until the end of the
1980s Zanussi service was run from Slough and was a network of
independent repairers who gave an unparalleled service level.
It is generally acknowledged within the industry that this
service network was the best that there has ever been in the
UK.
In the early 1990s Electrolux instigated
amalgamating all its UK brands under one service entity. This
entity was split, dependent on region, between the Zanussi
service agents and the local Electrolux Service Centre. In
general those in a high population density area where given to
the Electrolux employed centres. Tricity Bendix, Electrolux
and AEG as well as Zanussi were all to be serviced by the one
network.
This was changed in the late 1990s and early
2000s as Electrolux sold or gave away the regional service
centres, generally to the existing management or to area
managers to run as independent businesses.
This service
network was rebranded and became Service Force which still
exists today but is, once again, all operated by independent
service companies who repair and supply spare parts for all of
the brands.
Stern / REX / Zanussi / Seleco (WAS) is an electronics company based in Pordenone,
Friuli Venezia Giulia, Italy. It is part of
Super//Fluo, who bought the rights in August, 2006, along with Brionvega and Imperial.
Sèleco
was born as in 1965 as a spin-off from the home appliances
maker Zanussi. In the first years of his life, Seleco
produced almost black and white televisions with the Zanussi
or Rex brand. The company was being sold in 1984, and was
first acquired by
Gian Mario Rossignolo. He first became president and then main stockholder.
During
the 1980s, the company launched worldwide marketing
campaigns and began sponsoring some of the most famous
Italian soccer team, such as
Lazio A.S..
During
the '90s, the company was mainly concentrated on the
production of pay-tv decoders, but in 1993 suffered from a
loss of competitivity. With the intent to reshape its
position and to get gave new life to the company, Gian Mario
Rossignolo bought Brionvega from the Brion family, the
founder. This attempt get to nowhere, so the company was forced
to declare failure in 1997. During the years, Sèleco has
passed through ups and downs, at the end being overcome by
the continuous changes in the electronics world.
After the crack-down, the company and all its interests were bought by the Formenti family. That gave life to the
Seleco-Formenti Group, owner of the rights for the brands Sèleco, Rex, Phonola, Imperial, Stern, Phoenix, Televideon, Kerion and Webrik.
The
Formenti family re-launched the company with the
production of CRT-TVs. In 2000, the company suffered of a
strong crisis, following the price dumping made by Turkish
manufacturers. That seems to led to end of the Sèleco and
Brionvega story, as the Sèleco-Formenti Group was forced to
liquidation.
In 2004, the rights for the radio branch were bought by
Sim2 Multimedia, and all the television interests (for the brands Sèleco, Brionvega and Imperial) were acquired by
Super//Fluo in August 2006.
THIS INDUSTRY IS TODAY DEAD !!!!
Electrolux AB History:
Electrolux AB operates as the largest appliance manufacturer in the
world with customers in more than 150 countries. The company
manufactures a variety of household appliances including refrigerators,
washing machines, dishwashers, ovens, vacuum cleaners, lawn mowers, and
chain saws. The firm also manufactures professional foodservice and
laundry equipment used by hotels, restaurants, and laundromats.
Electrolux's brand arsenal includes its namesake, along with Eureka,
AEG, Frigidaire, Kelvinator, Zanussi, Flymo, Weed Eater, and Husqvarna.
In 2001, the firm held the leading market position in North America,
Europe, Latin America, and Australia. Electrolux completed a major
restructuring effort in 1999, which left it positioned with two main
business segments: Consumer Durables and Professional Products. In 2000,
the company purchased the rights to market the Electrolux brand in the
United States--the company had sold the brand along with its U.S.
floor-care business in 1969.
Key Dates:
1919:
Lux and Elektromekaniska merge to form Aktiebolaget Elektrolux.
1921:
The Lux V vacuum cleaner is introduced.
1925:
The company acquires Arctic, an absorption refrigerator manufacturer.
1956:
Axel Wenner-Gren sells his stake in the firm to Wallenberg, a Swedish finance group.
1957:
The company changes the spelling of its name to Electrolux.
1962:
ElektroHelios, a Scandinavian market leader in compressor refrigerators and freezers, is acquired.
1967:
Hans Werthén is named president.
1974:
Electrolux purchases United States-based Eureka.
1984:
Zanussi, an Italian household appliance manufacturer, is acquired.
1997:
Michael Treschow is named president and CEO; a major restructuring effort is launched.
2000:
The company buys the rights to the Electrolux brand in North America.
2002:
Treschow leaves to head up Ericsson; Hans Straberg is named his successor.
Beginnings in Vacuum Cleaners
The Electrolux empire originated with the perspicacity and marketing
flair of Axel Wenner-Gren, who spotted the potential of the mobile
vacuum cleaner only a few years after its invention by Englishman H.C.
Booth in 1901. In 1910 the young Wenner-Gren bought a part share in the
European agent of a U.S. company producing one of the early vacuum
cleaners, the clumsy Santo Staubsauger. After a couple of years as a
Santo salesman for the German-based agent, Wenner-Gren sold his share of
the company and returned to Sweden, where the building blocks for the
future Electrolux, Lux and Elektromekaniska AB, were already in place.
Sven Carlstedt had formed Elektromekaniska in 1910 to manufacture motors
for a vacuum cleaner based on the Santo, which was produced by Swedish
engineer Eberhardt Seger. Since its founding in 1901, Lux had
manufactured kerosene lamps. Now confronted with a shrinking market
owing to the introduction of electric lighting, Lux head, C.G. Lindblom,
proposed to Sven Carlstedt that the two companies form a joint venture
for the production and marketing of a new vacuum cleaner.
In 1912 Wenner-Gren became the agent for the Lux 1 vacuum cleaner in
Germany, subsequently taking on the United Kingdom and France. Over the
next few years Wenner-Gren's role in the company grew, and the machine
gradually became lighter and more ergonomic. Wenner-Gren foresaw a
potential sales bonanza in Europe after the end of World War I.
Initially unable to persuade his colleagues to step up production
capacity, he overcame their reluctance by guaranteeing a minimum sales
figure through his own sales company, Svenska Elektron (later known as
Finans AB Svetro).
Lux and Elektromekaniska merged in 1919 as Aktiebolaget Elektrolux (the
spelling was changed to Electrolux in 1957). Wenner-Gren became
president and a major shareholder of the new company. In 1921 the Lux V
was introduced. This new model resembled a modern cylindrical vacuum
cleaner, but it glided along the floor on ski-like runners instead of
wheels. The Lux V was to present serious competition to the upright
Hoover machines in the 1920s.
The convenience and attractive styling of its product helped to get the
new company off to a promising start, but the salesmanship of
Electrolux's president probably played an even bigger part. Wenner-Gren
was a great believer in the door-to-door sales techniques already
espoused by competitors such as Hoover in the United States. Vacuum
cleaners were demonstrated to potential customers in their own homes,
and buyers were allowed to pay for their machines in installments.
Wenner-Gren knew how to get the best out of his sales force.
To today's sales managers, sales training, competitions, and slogans
like "Every home an Electrolux home" are familiar methods of boosting
sales, but when Wenner-Gren introduced them they were revolutionary. He
also believed in leading from the front. The story of how he sold a
vacuum cleaner to the Vatican is part of company mythology. Four
competitors demonstrated their machines first, each vacuuming their
allocated area of carpet. When Wenner-Gren's turn came, instead of
vacuuming the fifth area, he went over the first four again. The
resultant bagful of dust persuaded the pope to add his palace to the
growing number of Electrolux homes. Advertising, too, was imaginative.
Not only did Electrolux make extensive use of the press, but in the late
1920s, citizens of Stockholm, Berlin, and London were liable to
encounter bizarre vacuum cleaner-shaped cars in the streets.
Bizarre or not, the sales methods worked, and the company grew.
Throughout the 1920s, new sales companies sprang up, not only all over
Europe but also in the United States in 1924, Australia in 1925, and
South America. Many of these were financed by Wenner-Gren himself rather
than by Electrolux in Sweden. Vacuum cleaner manufacturing plants also
started to open overseas, first in Berlin in 1926 and a year later in
Luton, England, and Courbevoie, France.
By 1928 Electrolux had sales of SKr 70 million. It had five
manufacturing plants, 350 worldwide offices, and 20 subsidiaries. In
spite of this geographic expansion, the company was often short of
funds, in part because of the system of payment by installments. It
became clear that further growth would require increased capital, and it
was decided to float the company on the London Stock Exchange and to
issue more shares. Prior to flotation in 1928, Electrolux bought out
many of the related companies owned by Wenner-Gren, though he retained
his minority shareholding in the American Electrolux Corporation until
1949.
Flotation on the Stockholm stock exchange was postponed until 1930 owing
to the stock market crash. When the shares did appear they were greeted
with some mistrust, as it was thought that the company was overvalued
and that sales would suffer during the anticipated recession. These
doubts, however, were to prove unfounded.
Diversifying into Refrigerators in the Mid-1920s
During the 1920s Electrolux introduced a number of new products,
including floor-polishers, a natural progression from vacuum cleaners,
which were brought out in 1927. The main diversification of the 1920s,
however, came through the acquisition in 1925 of Arctic, a company
manufacturing a novel machine, the absorption refrigerator. This type of
refrigerator has no moving parts, though early models required
connection to a source of running water. Power can be provided by
electricity, gas, or kerosene as opposed to the compression method of
refrigeration, which relies on electric power. Early compressors were
noisy and bulky, so the new Electrolux system had several advantages
over its competitors' compression refrigerators.
A new air-cooled version of Electrolux's absorption refrigerators was
introduced in 1931, and by 1936 more than one million had been sold.
Demand for the machines grew as restrictions were placed on the use of
food preservatives by legislation such as the United Kingdom Food
Preservative Act of 1927. In the United States, Servel Inc. had acquired
a license to manufacture Electrolux's refrigerators.
Electrolux's original vacuum cleaner factory on Lilla Essingen was
devastated by fire in 1936. When it was rebuilt the following year, the
opportunity was taken to fit it with the latest equipment and to install
a central research laboratory.
In 1926 Wenner-Gren became chairman of the board, with Ernst Aurell
taking over as president. During the 1930s Wenner-Gren remained chairman
but reduced his involvement in the running of the company, prior to
resigning from his post in 1939. Harry G. Faulkner, a British accountant
who had been instrumental in the company's consolidation prior to the
1928 flotation, succeeded Aurell in 1930 and remained president
throughout the 1930s.
With intensive marketing and continued investment in research and
development, Electrolux rode out the Great Depression. By 1939 annual
sales stood at SKr 80 million. In 1939 Gustaf Sahlin, former president
of the United States Electrolux Corporation, took over the presidency of
the parent company from Faulkner. Throughout World War II, despite the
loss of some manufacturing plants, Electrolux managed to maintain many
of its usual activities, opening operations in Australia, Venezuela, and
Colombia. At home in Sweden, it acquired companies in the fields of
commercial laundry equipment and outboard motors. Much energy, however,
was diverted into the war effort, including the manufacture of munitions
and of air cleaners for the Swedish forces.
After the war Electrolux resumed its normal operations, initially under
Elon V. Ekman, who became president in 1951, and from 1963 to 1967 under
his successor Harry Wennberg. The period was not without setbacks,
however. Many subsidiaries that had been opened in Eastern European
countries before the war disappeared from view behind the Iron Curtain.
In addition, despite a British government contract to supply 50,000
built-in absorption refrigerators for prefabricated temporary houses,
the company began to face problems in the refrigerator market.
Compression technology had advanced and was proving more effective for
the larger refrigerators that consumers were now demanding. Although at
first the company concentrated on improving the design of the absorption
refrigerator, Electrolux eventually was obliged to adopt compression
technology.
Meanwhile, diversification continued. During the 1950s Electrolux
started making household washing machines and dishwashers, and
floor-cleaning equipment production was extended to an increasing number
of countries, including Brazil and Norway. When, in 1956, Axel
Wenner-Gren sold his remaining shares in Electrolux to Wallenberg, a
Swedish finance group, annual turnover exceeded SKr 500 million. The
association with Wallenberg has often stood Electrolux in good stead,
helping, for example, to arrange overseas funding and to insulate the
group from any hostile takeover bids.
In 1962, in an attempt to solve its refrigerator problems, Electrolux
bought the Swedish firm of ElektroHelios. This firm, founded in 1919,
had a major share of the Scandinavian market in compressor refrigerators
and freezers, as well as making stoves. In the year following the
acquisition, Electrolux launched a wide range of food-storage equipment,
putting it in a strong position to benefit from the demands generated
by the flourishing frozen food industry.
Major Acquisitions: Late 1960s-80s
Until the 1960s Electrolux had continued to operate along the lines
conceived by Wenner-Gren in the early years. A new phase began in 1967,
when Hans Werthén was recruited from Ericsson, another member of the
Wallenberg group of companies. Werthén remained with Electrolux for more
than 25 years, first as president, and from 1975 to 1991 as chairman,
with Gösta Bystedt and then Anders Scharp succeeding him as president.
Under this regime, a series of momentous acquisitions was to allow
Electrolux to multiply its turnover by a factor of 60 in 20 years.
When Werthén took over management of the Electrolux group the company
was in the doldrums; it had run into internal and external problems, and
its technology was outmoded. Electrolux, an international company, had
not been effectively integrated with its acquisition ElektroHelios,
which still focused on the Scandinavian market. In many ways the merged
companies had continued to behave as if they were still competitors,
resulting in a net loss of market share in the refrigerator market. Only
the vacuum cleaners were profitable: to use Werthén's own words, "they
represented 125 percent of the profits."
Approaching the problem from a new perspective, Werthén managed to
resolve the Electrolux-ElektroHelios conflict and get rid of the
organizational overlap. His new head of production, Anders Scharp, set
about updating production technology to challenge the much more advanced
techniques he had seen in U.S. appliance factories. Werthén believed
that Electrolux's problems could not be overcome simply by operational
improvements. The company had a more fundamental problem: size.
As Werthén saw it, Electrolux was neither small enough to be a niche
player, nor large enough to gain the economies of scale it needed to
compete with such giants as Philips and AEG. Growth was the only way
forward, and in the overcrowded market place for household goods, growth
meant acquisitions.
The initial focus was on Scandinavia. One small competitor after
another, many of them struggling for survival, was bought up by the
growing company. The Norwegian stove manufacturer Elektra, the Danish
white goods company Atlas, and the Finnish stove maker Slev were among
the first acquisitions of the late 1960s. Soon Electrolux was shopping
for competitors outside Scandinavia. The 1974 acquisition of Eureka, one
of the longest established vacuum cleaner companies in the United
States, gave Electrolux a large slice of a valuable market overnight.
At around this time there were glimmerings of hope for the reemergence
of the absorption refrigerator. The quiet-running units were ideally
suited to installation in smaller living spaces, such as mobile homes
and hotel rooms. Electrolux managers soon sensed these new
opportunities. After taking over competitors Kreft (of Luxembourg) and
Siegas (of Germany) in 1972, the group became world leader in this
sector.
In addition to expanding its share of the company's existing markets,
Electrolux soon started to see acquisitions as a way of entering new
areas, particularly those related to existing product lines. Electrolux
acquired the British lawn mower manufacturer Flymo in 1968 because
Werthén saw lawn mowing as an activity allied to floor cleaning. The
provision of cleaning services seemed a logical extension to the
production of cleaning equipment, prompting the purchase of a half share
in the Swedish cleaning company ASAB.
Buying up the venerable Swedish firm of Husqvarna in 1978 gave
Electrolux not only a new pool of expertise in commercial refrigeration,
but also a flourishing chainsaw-manufacturing concern, which
complemented its interests in outdoor equipment. Taking over a clutch of
other chainsaw manufacturers over the following decade--including the
U.S. firm Poulan/Weed Eater in 1986--enabled Electrolux to claim
leadership of the worldwide chainsaw market. The outdoor products sector
was further strengthened and broadened through the acquisitions of
American Yard Products in 1988 and of Allegretti & Co., a U.S. maker
of battery-driven garden tools, in 1990.
This program of acquisitions brought some more radical departures from
existing product lines. In 1973 Electrolux bought Facit, a Swedish
office equipment company. The deal also brought to Electrolux the
production of Ballingslöv kitchen and bathroom cabinets. Initial doubts
about whether Electrolux had the know-how to manage a high-tech company
proved unfounded.
The purchase of Swedish metal producer Gränges was greeted with equal
skepticism, since again the connection between the new and existing
businesses appeared to be rather tenuous. Gränges was seen as a troubled
company, but when Electrolux bought it in 1980, Werthén had already
been chairman of its board for three years and had overseen a marked
upturn in its fortunes. Gränges became part of Electrolux in 1980, and
by the late 1980s Gränges' aluminum products and car seat belts
represented a major aspect of Electrolux's business, although other
parts of Gränges were sold off.
Under the presidency of Anders Scharp, which began in 1981, Electrolux's
program of acquisitions began to focus on the consolidation and
expansion of existing lines. Takeovers became increasingly ambitious as
Electrolux saw within its reach the chance to become one of the world
leaders in household appliances. Major steps toward this goal were the
acquisitions of Zanussi in Italy, White Consolidated in the United
States (the third largest white goods company in that country), and the
white goods and catering equipment divisions of the United Kingdom's
Thorn EMI, in 1984, 1986, and 1987, respectively.
Through the years, Electrolux gained a reputation for buying only when
the price was right and for turning around sick companies, even at the
cost of heavy staff cuts and management shake-ups. As the Wall Street
Journal pointed out in 1986 in a piece about the acquisition of White
Consolidated, the group balance sheet looked unhealthy immediately after
some of the larger acquisitions, showing an equity-asset ratio as low
as 21 percent.
Electrolux bounced back confidently, making divestments as well as
acquisitions. One of Werthén's earliest acts as president had been the
1968 sale of AB Electrolux's minority shareholding in the United States
Electrolux Corporation to Consolidated Foods, which raised SKr 300
million, although the subsequent Eureka purchase had placed the company
in the curious position of competing against its own brand name.
Management continued this policy of judicious divestment following
acquisitions, when it was considered that all or part of the new member
did not fit in with the group's strategy. Facit, for instance, was sold
to Ericsson in 1983, and shortly after the purchase of White
Consolidated, its machine-tool division, White Machine Tools, was sold
off.
Another method of raising cash was through the sale of assets, although
Electrolux acquisitions were not primarily motivated by a desire to
strip assets. In the case of Husqvarna, the purchase price of SKr 120
million was more than covered within six months by the sale of its land
and other property. A third way of recovering the costs of acquisition
was the use of a troubled company's accumulated losses wherever possible
to reduce the group's tax liability. This was a major incentive in the
acquisition of Gränges.
Not every company was delighted to hear Electrolux knocking on its door.
Many a takeover was resisted by the target company, although Electrolux
was also sometimes called in to rescue a troubled company (as happened
with Zanussi) or asked to act as a white knight (notably for the U.S.
household appliance company Tappan in 1979).
Geographic Expansion and Restructurings in the 1990s
The 1990s brought major changes to Electrolux, spearheaded by a new
management team. Werthén resigned as chairman in early 1991, Scharp
became chairman and CEO, and Leif Johansson was named president of the
firm, taking over as CEO himself in 1994. During Werthén's long reign,
Electrolux had grown tremendously through acquisitions but had failed to
effectively consolidate the acquired operations into existing ones. The
result was an unwieldy array of brands, each of which needing the
support of separate production and marketing operations. Electrolux was
further hurt in the early 1990s by an economic downturn in its core
European and North American operations and by the maturing of the white
goods sectors in those same markets, which intensified competition. All
told, profits for Electrolux from 1990 through 1994 were much lower than
the heights reached during the late 1980s. The new management team
responded by seeking out new markets for its core products, by gradually
divesting its noncore industrial products operations, and by
streamlining its remaining business units.
Electrolux targeted Eastern Europe, Asia, South America, the Middle
East, and southern Africa in its 1990s push for global growth. The
company had already, in 1989, arranged for Sharp Corporation to
distribute some of Electrolux's products in Japan. Subsequent moves in
Asia included the setting up of joint ventures in China for the
manufacture of compressors, vacuum cleaners, and water purifiers, and
the acquisition of majority stakes in refrigerator and washing machine
factories in India. In January 1996 another Chinese joint venture was
established for the production of refrigerators and freezers for
commercial users. The newly opened markets of Eastern Europe were first
targeted with the 1991 purchase of the Hungarian white goods company
Lehel. A 1995 joint venture with Poland's Myszkow FNE Swiatowit began
making washing machines under the Zanussi brand. In Latin America, where
Whirlpool was dominant, Electrolux acquired 99 percent of Refrigeraçao
Paraná S.A. (Refripar) in 1996. Refripar (soon renamed Electrolux do
Brazil) held the number two position among Brazilian white goods
companies. Also in 1996, Electrolux purchased a 20 percent stake in
Atlas Eléctrica S.A. of Costa Rica, the leading producer of
refrigerators and stoves in Central America. By 1994, about 10 percent
of Electrolux's sales came from outside the European Union and North
America. This figure more than doubled by 1996 to 20.4 percent, with
non-EU Europe accounting for 7 percent, Latin America for 6.4 percent,
Asia for 5.1 percent, Oceania for 1 percent, and Africa for 0.9 percent.
While undergoing this global expansion, Electrolux also moved gradually
to concentrate solely on three core sectors: household appliances,
commercial appliances, and outdoor products. Profits in the company's
industrial products sector were falling and Scharp and Johansson
determined that these noncore operations should be jettisoned. The
culmination of this process came in 1996 and 1997, with the divestment
of the Constructor group, producers of materials-handling equipment; the
sale of the Swedish electronics operations of Electrolux Electronics,
and a sewing machines unit; and the spinoff of Gränges to the public.
The final divestment came in August 1997 when Electrolux's goods
protection operation, which sold tarpaulins and storage halls, was sold
to MVI, a privately owned investment fund.
Electrolux greatly reduced its acquisitions activity in the European
Union and North America in the 1990s, although there was one major
addition. In 1992 the company bought a 10 percent stake in AEG
Hausgeräte, the household appliance division of Germany's Daimler-Benz.
This stake was increased to 20 percent in 1993 and the following year
Electrolux purchased the remaining 80 percent for about US$437 million.
The purchase brought the company another strong European brand, which
fit well into a renewed brand strategy for Electrolux. The company
sought to position the Electrolux brand as a global brand and
Electrolux, Zanussi, and AEG as pan-European brands, while continuing to
maintain strong local brands such as Faure in France and Tricity Bendix
in the United Kingdom.
Along with the new brand strategy, Electrolux began in 1996 to reduce
its fragmented operations and become more efficient. A pan-European
logistics function was set up for white goods and floor-care products.
In late 1996 the company's North American white goods operation,
Frigidaire Company, was combined with the two North American outdoor
products companies, Poulan/Weed Eater and American Yard Products, to
form Frigidaire Home Products. Merging these operations made strategic
sense since the trend in retailing was toward single retailers selling
both indoor and outdoor appliances. Similar consolidations were planned
for Electrolux's operations elsewhere in the world.
In April 1997 Johansson left Electrolux to become the chief executive at
Volvo AB. Replacing him as Electrolux president and CEO was Michael
Treschow, who had been president and CEO at Atlas Copco AB, a maker of
industrial equipment and, like Electrolux, part of the Wallenberg
dynasty. It was left to Treschow to announce, in June 1997, a major
restructuring plan, which had already been agreed upon before he took
over. Over a two-year period, Electrolux would lay off more than 11,000
of its workers (11 percent of its workforce) and close 23 plants and 50
warehouses (half of its global total), with the reductions coming mainly
in Europe and North America. A charge of SKr 2.5 billion (US$323
million) was incurred as the result of the restructuring in the second
quarter of 1997.
Under the leadership of Treschow, Electrolux further streamlined its
operations in 1998, divesting its recycling business, its kitchen and
bathroom cabinets interests, and various professional cleaning and
heavy-duty laundry equipment units. The following year, the firm sold
off its food and beverage vending machine businesses and its
professional refrigeration equipment business. That year, Electrolux
nixed a large portion of its direct sales force.
The company completed its restructuring efforts in 1999 and began to
focus on maintaining its leadership position in the future. Treschow was
confident that the firm's efforts would pay off, claiming in a 1999
Appliance Manufacturer article that the company was "ideally placed to
meet the challenges of the new millennium." To back up that claim, the
company began to develop new products that utilized cutting edge
technology. In 1999, it teamed up with Ericsson to develop and market
products for the "networked home." Managed under the joint venture,
e2Home, these products would be connected via the Web to a variety of
information and service providers. Another product line, the Live-In
Kitchen, connected appliances to mobile phones, which among other
features, allowed the owner to preheat their oven from their cell phone.
As part of its foray into new technology, Electrolux also developed the
Trilobite vacuum cleaner, a robotic product that used sensors to vacuum
a room, and a Smart Fridge, a top-of-the-line refrigerator complete
with built-in computer screen and Internet access.
Focusing on Brand Alignment in the New Millennium
By 2000, both sales and net income had increased steadily over the past
three years. Sales had grown from SKr 113 billion to SKr 124.4 billion.
Net income also had recovered, skyrocketing from SKr 352 million
recorded in 1997, to SKr 4.4 billion secured in 2000. During that year,
the company repurchased its rights to the Electrolux brand in North
America, which it had sold in 1969 upon divesting its U.S. floor-care
company. The purchase was part of its plan to align its brand names,
especially in North America.
The company's operating environment became turbulent in 2001. Weakening
demand and high costs related to upgrades at its refrigerator factories
in North America forced the firm's operating income to fall by nearly 23
percent over the previous year. Despite these challenges, the company
made two key acquisitions, including Email Ltd., Australia's largest
household appliance manufacturer, and Italy-based Marazzini, a lawn
mower manufacturer.
In April 2002, Hans Straberg took over as president and CEO as Treschow
left the firm to head up Ericsson. Under new leadership, Electrolux
shifted its focus from cost cutting to brand realignment. At the time,
the company managed more than 50 different brands. The Economist
reported in April 2002 that the company realized that "rationalizing the
brands can be dangerous if done too quickly--so the rebranding will be
more evolution than revolution. The Electrolux name will become the
master brand, but the company will keep strong local brands, such as the
Flymo lawnmower in Britain."
Facing strong competition and uncertain economic times, Straberg most
definitely had his work cut out for him. Although the repositioning of
the Electrolux brand name would no doubt face challenges, the company
appeared to be well on its way to maintaining its leadership position in
the appliance industry in the years to come.
Principal Subsidiaries: Electrolux Home Products Pty. Ltd. (Australia);
Electrolux Hausgerate GmbH (Austria); Electrolux Home Products Corp.
N.V. (Belgium); Electrolux do Brasil S.A. (99.9%); Electrolux Canada
Corp.; Electrolux Home Appliances Co. Ltd. (China); Electrolux Holding
A/S (Denmark); Oy Electrolux Ab (Finland); Electrolux France S.A.;
Electrolux Deutschland GmbH (Germany); Electrolux Kelvinator Ltd.
(India; 76%); Electrolux Zanussi S.p.A. (Italy); Electrolux de Mexico,
S.A. de C.V.; Electrolux Associated Company B.V. (The Netherlands);
Electrolux Norge AS (Norway); Electrolux Espana S.A. (Spain); Husqvarna
AB; Electrolux Professional AB; Electrolux Holding AG (Switzerland);
Electrolux UK Ltd.; Electrolux Home Products Inc. (U.S.A.); Electrolux
North American Inc. (U.S.A.).
Principal Competitors: BSH Bosch und Siemens Hausgeräte GmbH; GE Consumer Products; Whirlpool Corporation.
Further Reading:
"Brand Challenge; Electrolux," Economist (U.S.), April 6, 2002.
Brown-Humes, Christopher, "Electrolux to Plug into Households in Opening Markets," Financial Times, April 27, 1995, p. 25.
Burt, Tim, "Electrolux Set to Pull Out of Industrial Goods," Financial Times, October 30, 1996, p. 28.
Calian, Sara, "Electrolux to Cut Force by 11%, Mainly in North America, Europe," Wall Street Journal, June 13, 1997, p. A15.
Canedy, Dana, "Electrolux to Cut 12,000 Workers and Shut Plants," New York Times, June 13, 1997, p. D2.
"Can 'Mike the Knife' Give Electrolux a Net-Age Edge?," Business Week, September 13, 2000.
"Electrolux Expects to Be No. 1 Appliance Maker," Appliance Manufacturer, February 1994, p. 20.
"Electrolux News," Appliance, December 1999, p. 18.
"Electrolux News," Appliance, May 2002, p. 15.
"Electrolux Plots a New Strategy," Housewares, January 1, 1990, p. 78.
"Electrolux Sweeps into America," Business Week, September 23, 2002.
Electrolux: Two Epochs That Shaped a Worldwide Group, Stockholm: Electrolux, 1989.
Gordon, Bob, Early Electrical Appliances, Princes Risborough, United Kingdom: Shire Publications Ltd., 1984.
Holding, Robert L., "Globalization: The Second Decade," Appliance Manufacturer, May 1999, p. 34.
Jancsurak, Joe, "Big Plans for Europe's Big Three," Appliance Manufacturer, April 1995, pp. 26-30.
Kapstein, Jonathan, and Zachary Schiller, "The Fast-Spinning Machine
That Blew a Gasket," Business Week, September 10, 1990, pp. 50, 52.
Lorenz, Christopher, "The Birth of a 'Transnational,'" Financial Times, June 19, 1989.
McGrath, Neal, "New Broom Sweeps into Asia," Asian Business, March 1996, p. 22.
McIvor, Greg, "Electrolux Comes Under the Scalpel," Financial Times, October 29, 1997, p. 19.
Moss, Nicholas, and Hale Richards, "Mike the Knife Cuts Deep," European, June 19, 1997, p. 17.
Racanelli, Vito, "Autumn Fall for Electrolux," Barron's, July 29, 2002.
"The Real Head of the Household," Director, November 1996, p. 17.
Reed, Stanley, "The Wallenbergs' New Blood," Business Week, October 20, 1997, pp. 98, 102.
Sparke, Penny, Electrical Appliances: Twentieth-Century Design, New York: E.P. Dutton, 1987.
"The Stars of Europe--Survivors," Business Week, June 11, 2001.
"Sweden's Electrolux Plans for Expansion into Southeast Asia," Wall Street Journal, January 4, 1995, p. B7.
Tully, Shawn, "Electrolux Wants a Clean Sweep," Fortune, August 18, 1986, p. 60.
Zweig, Jason, "Cleaning Up," Forbes, December 11, 1989, p. 302.
Source: International Directory of Company Histories, Vol. 53. St. James Press, 2003.
