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The Battle Continues – LG vs Whirlpool

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If you have been following the ongoing series of court debates between LG and Whirlpool, you’ll be aware of the back and forth battles regarding steam dryers and refrigerator patents.

The United States District Court in Chicago this week entered a final judgment in favor of Whirlpool in a case filed by LG Electronics involving Whirlpool’s steam dryer advertising. The court had previously ruled that “Whirlpool has established that its dryers do, in fact, use steam,” and that “LG did not introduce expert testimony or credible evidence of even a single Whirlpool customer, retailer, or trade representative who expressed confusion.”

“We’re very pleased with the Court’s decision,” said Marc Bitzer, president, Whirlpool North America Region. This victory means consumers will continue to have a choice in purchasing their steam laundry appliances.”

While this seems to settle the steam dryer case, the refrigerator patent battles continue. LG originally sued to have Whirlpool fridge patents invalidated; Whirlpool countersued. In March 2010, a jury trial found mostly in favor of Whirlpool and awarded Whirlpool $1,786,925. On July 1, 2011, the court granted a new trial and set a trial date of Sept. 28, 2011.

Whirlpool is seeking a judgment that better validates its patent claims; LG seeks to have the claims of patent violation invalidated and eliminate its liability. Stay tuned…

Appliance Prices Are Going Up

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Top appliance makers Whirlpool and Electrolux are raising prices to pass soaring raw material costs on to customers, but their attempts may not pass muster with bargain-hungry shoppers.

According to Reuters, both companies reported quarterly profits that fell short of estimates as they grapple with tepid demand in major markets like the United States and Europe.
Many analysts questioned the timing of the move, especially since consumers in the developed world continue to look for incentives to buy expensive goods like appliances.

Korean manufacturer Samsung has not announced increases and appears to be planning to hold existing prices. Still, Whirlpool’s chief executive, Jeff Fettig, insisted it was not “economically feasible” for Whirlpool to remain indefinitely in the promotional mindset it adopted for the holiday season and last year in general. “For 2011, we expect positive but uneven demand levels around the world,” Fettig said, adding the company still hoped to expand operating margins in the year through price increases and boosts in productivity.

LG Electronics does plan an increase as well. The planned price increase matches moves announced earlier by Whirlpool and Electrolux.

Whirlpool has shut plants, cut jobs and moved some manufacturing to lower cost centers like Mexico. It has also started using common parts across its lineup of dishwashers, refrigerators and washing machines.

Electrolux, which sells under its own name as well as the Zanussi and Frigidaire brands, is planning to raise prices by 8 percent to 10 percent in North America starting in April and gradually in Europe and other markets. The move comes as manufacturers around the globe plot price increases to offset higher materials costs and regain ground lost in the recession. Electrolux Chief Executive Keith McLoughlin said the rise in raw materials’ costs had been across the board.

Whirlpool’s Newest Washers and Dryers

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Whirlpool has unveiled their newest laundry pairs, including an updated Duet platform and a new Maxima front-load line for Maytag.

Duet, which helped usher in the front-load washer category within the U.S. nearly a decade ago, has been retooled for even great energy and water efficiency in advance of anticipated higher federal standards.

Designed in conjunction with the Institute of Fabric Science, the revamped washer now uses as little as 11.5 gallons of water per load and exceeds current federal energy standards by more than 160 percent on average, Whirlpool said. The greater efficiency is achieved with an EcoBoost option that reduces water temperature while increasing agitation duration, resulting in the same cleaning effectiveness as previous iterations while using less water and energy.

Whirlpool estimates that the laundry pair can save consumers 12,857 gallons of water a year and as much as $3,300 in lifetime energy costs.

According to Twice.com, Whirlpool is targeting national retail chains for the launch, which is expected to begin in time for the holiday selling season. Suggest retail prices will start at $1,100 for both the washer and dryer.

Meanwhile, Whirlpool’s Maytag brand will roll out an entirely new front-load laundry platform in the Maxima, which offers increased capacity and a power-wash cycle that promises extra cleaning action by loosening stains and ground-in dirt.

The power-wash cycle is complimented by an internal water heater that boosts water temperatures to release difficult stains, and is followed by a thorough rinse to flush out any remaining detergent or lingering soils, Whirlpool said. Together, the functions can remove tough stains that weren’t pre-treated.

The 5-cubic-foot washer, available in two models, also has a 10-year limited parts warranty on the motor and stainless-steel wash basket.

Its companion 7.4-cubic-foot capacity dryer features “Quad” baffles and advanced moisture sensors for consistent load drying, while steam cycles help remove odors and wrinkles.

The Maxima series will carry an opening price point of $1,000 and is slated to ship this fall to retailers nationwide.

Whirlpool Wins $1.78 Million From LG in Patent Case

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According to Businessweek.com, Whirlpool Corp., the world’s largest appliance maker, won $1.78 million in patent- infringement damages from Korea’s LG Electronics Inc. in a continuing dispute over refrigerator technology.

After a seven-day trial in federal court in Wilmington, Delaware, the jury of five women and three men also decided that Whirlpool didn’t infringe an LG icemaker patent. “We’re gratified that the jury found that our patent is both valid and infringed,” Scott F. Partridge, one of Whirlpool’s lawyers, said in an interview after the verdict.

LG, of Seoul, sued Benton Harbor, Michigan-based Whirlpool in 2008 alleging infringement of a U.S. patent for an ice dispenser. Whirlpool countersued, claiming LG infringed patents for in-door ice-access and warp-proof refrigerator liners. LG said in a statement it would seek a judicial review of the verdict.

During two days of deliberations, jurors repeatedly examined a row of LG and Whirlpool double-door refrigerators with icemakers lined up in the courtroom, comparing claims of the patents and how the equipment works.

LG had asked the jury to award it more than $1 million in royalties, and Whirlpool originally asked for a minimum of $22.1 million in its suit.

The case was complicated by a U.S. International Trade Commission ruling in Washington last month that LG didn’t violate a Whirlpool patent for ice storage and may still import refrigerators.

In its statement, LG said the jury “was not permitted to hear any evidence concerning the ITC investigation.”

LG is the No. 3 appliance maker behind Whirlpool and Sweden’s Electrolux AB. LG reported more than $7 billion in home appliance sales last year and is aiming to become the world’s largest maker of refrigerators and washing machines by 2012.

LG agreed to modify the design of the ice maker in some of its refrigerators to resolve part of the ITC dispute.

Whirlpool gets US Grant for Smart Appliances

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Whirlpool has announced that it is the recipient of stimulus funds as part of the U.S. Department of Energy’s (DOE) Smart Grid Investment Grant program.

The grant of $19.3 million over a two year period – which Whirlpool will match with its own investments – will help the company accelerate its work to deliver to consumers smart appliances that can connect with the smart grid. For example, the company recently announced that in 2011 it would deliver one million U.S. manufactured smart dryers capable of reacting intelligently to signals from the smart grid by modifying their energy consumption to save consumers money on their home electric bills. In markets where utilities offer variable or time-of-use pricing, these dryers could save a typical consumer $20 to $40 per year, while also benefitting the environment.

“The grants announced today are a great example of public and private partnerships that will create the next generation of energy saving solutions,” said Mike Todman, president, Whirlpool Corporation North America. “Smart appliances combined with time of use pricing offer consumers the greatest ability to save money on energy costs while benefiting the environment.”

In addition, the funds will complement the company’s commitment that by 2015 all of the electronically controlled appliances it produces – everywhere in the world – will be capable of receiving and responding to signals from the smart grid. This commitment is dependent on two important public-private partnerships: the development by the end of 2010 of an open, global standard for transmitting signals to and receiving signals from a home appliance; and appropriate policies that reward consumers, manufacturers and utilities for using and adding these new peak demand reduction capabilities.

New From Whirlpool – Duet Steam Washer – FanFresh

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Have you ever left your laundry in the washing machine by accident, only to find it smelly and wrinkled when you finally remembered to put it in the dryer? Whirlpool brand has heard consumers’ call, and in response, is arming consumers with the best defense — a washer with the ability to keep clothes smelling fresh for up to 10 hours after the cycle ends with the industry-changing FanFresh option.

The Whirlpool Duet steam washer’s FanFresh option intermittently tumbles clothes in the wash drum for up to 10 hours after the cycle ends. Meanwhile, a quiet fan draws out moisture through a vent to help keep clothes smelling fresh and prevents wrinkles from setting in. According to a 2007 online survey conducted by Whirlpool brand, 72 percent of respondents said it is important that their clothes never smell sour when left in the washer, yet only 47 percent are satisfied that their current washer completes this task.

“Whirlpool brand is focused on offering consumers the flexibility to live their lives rather than plan around their laundry,” said Brandon Buckingham, senior brand manager, Whirlpool laundry. “The FanFresh option provides consumers with the opportunity to load their washer, run errands and go to the movies, and not worry about getting back in time to switch the wash.”

While the FanFresh option solves one of consumers’ biggest laundry problems today, the new Duet steam washer garners one of the most efficient energy ratings available from the Consortium for Energy Efficiency (CEE) -Tier III – meaning the machine features advanced water and energy savings for the consumer. In addition, the new Duet® dryer is the first in the front-load category to offer an Eco cycle that uses 40 percent less energy than a conventional dryer’s normal cycle when paired with a Duet® washer.

According to Whirlpool Corporation research conducted by Harris Interactive in 2008, nearly three quarters (72 percent) of adults actively look for the ENERGY STAR label when making purchasing decisions. With advanced water and energy savings for the consumer, the Whirlpool Duet steam washer is ENERGY STAR qualified and can save consumers more than $1,000 in lifetime water and energy costs when compared to a pre-2004 conventional washer, based on a 10-year life cycle. Couple this with the money saved in the dryer, and the savings of the Duet washer practically pays for the cost of the dryer. In fact, the new Duet pair is the industry’s most efficient laundry care system available based on time and energy usage.

The Whirlpool Duet steam washer has a capacity of 4.5 cu. ft., giving consumers the ability to wash up to 18 pairs of jeans in a single load. The Delay Wash setting can be used to set the washer to begin up to 18 hours later, perfect for timing during off-peak hours when utility rates may be lower or when unloading the washer is more convenient.

In addition, the Whirlpool Duet steam washer comes with the industry-first NightQuiet option, which further reduces operational sound and is great for those whose laundry rooms are close to living areas or bedrooms.

The Whirlpool Duet steam wash system adds the power of steam to select wash cycles to steam out tough stains, virtually eliminating the need to pre-treat, and removes up to 95 percent of tested allergens, including dust mites and pet dander. The Whirlpool Duet steam wash system received the highest rating for water efficiency, cleaning and capacity from a leading consumer magazine.

And steam is not just for the washer. The Duet steam dryer utilizes the power of steam to eliminate 99.9 percent of common household bacteria, ideal for those items that should not be washed such as backpacks, stuffed animals and pillows. And for those who want to avoid ironing and cut down on dry cleaning costs, the dryer offers a Quick Refresh steam cycle that tumbles small loads and uses steam technology to break down odors and smooth out wrinkles. In just 15 minutes, clothes are ready-to-wear.

The Whirlpool Duet steam washer (WFW9750W) will be available in White, Cranberry and Lunar Silver with an MSRP starting at $1,599, and the Whirlpool Duet steam dryer (electric WED9750W or gas WGD9750W) will be available in the same colors with an MSRP starting at $1,599 later this fall.

Affresh Tablets for the Dishwasher and Garbage Disposal

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While the aroma of baking pies and browning roasts are welcome in the kitchen, dishwasher and disposal odors are not. To keep smelly kitchen odor at bay and ensure appliance workhorses run smoothly, Whirlpool introduces the new affresh Dishwasher and Disposal Cleaner, the only national two-in-one cleaner for dishwashers and garbage disposals.

If not properly cleaned as indicated in the Use & Care guide, all brands of dishwashers and garbage disposals have the potential for odor. Dishwashers in particular can be a problem when dirty dishes sit for multiple days or when food residue is not completely rinsed away. Until now, no product on the market removed both dishwasher and garbage disposal odors.

An extension of the affresh washer cleaner brand, the affresh Dishwasher and Disposal Cleaner is simple to use. Simply place one tablet in the main dishwasher detergent tray and another tablet in the prewash tray or in the bottom of the dishwasher. Run on the heaviest cycle – without dishes – using the hottest wash temperature to activate the affresh chemistry to dissolve and neutralize odor, leaving behind a crisp citrus scent. If consumers have a garbage disposal, they should follow up with a tablet in the disposal to remove odor in the drain pipe, which connects to the dishwasher. To clean the garbage disposal, place one tablet into the disposal, slowly run hot water through the disposal for 15 seconds. Turn off water and disposal, and wait 30 minutes before flushing with hot water.

Affresh Dishwasher and Disposal Cleaner is safe for septic tanks, dishwashers, disposals and plumbing, and is the #1 recommended cleaner by KitchenAid, Whirlpool, Maytag and Amana brands. For more disposal and dishwasher maintenance tips, consumers should review their appliance Use & Care guides.

The MSRP for a package of six affresh Dishwasher and Disposal Cleaner tablets is $5.99 and is available at major home appliance dealers.

Cash For Clunkers – Appliance Clunkers

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Here’s some good news if you’ve got an old household appliance you’ve been wanting to replace. The government’s $300 million dollar incentive plan will help you pay for it. The plan is meant to help the appliance industry by giving a boost to slow appliance sales nationwide, but the relatively small amount of cash will not make a big impact on major appliance appliance dealers such as Whirlpool, GE, and Electrolux. There are also some potentially confusing details to be worked out:

The Wall Street Journal says unlike the clunkers plan, the program allows each state to pick qualifying models and tailor rebate amounts. Ohio might decide one washing machine qualifies for a $100 rebate, while California picks another for $125.

Manufacturers and retailers said they are reluctant to ramp up production or order new stocks until it is clear what models qualify. The Department of Energy, which designed the program, wants states to focus on just 10 categories of appliances carrying the federal Energy Star seal of approval for efficiency.

But other details are still uncertain. States could ask to include up to 46 other types of products, ranging from light bulbs to computers. While rebates are expected to range between $50 and $200, qualifying models and precise rebate amounts won’t be provided until late this year or early next.

Some of the nation’s biggest appliance makers are lobbying to make the plan rules uniform nationwide. They said the unknowns and the varying rules by state will make the program harder to explain to shoppers, in turn making it tougher to win sales.

The program “will provide consumers a unique opportunity to save money on energy-efficient appliances,” said Dave McCalpin, chief marketing officer for GE Appliances. He said Fairfield, Conn.-based GE is working with state governments to adopt rebate programs that rely on Energy Star ratings.

Some states are considering standards that exceed Energy Star requirements, a move GE opposes. “We believe it is very important that rebate programs are consistent across the country,” Mr. McCalpin said.

The stricter proposals underscore criticisms that the Energy Star program is not tough enough in raising energy efficiency. The Environmental Protection Agency is looking at revising the program’s standards. If it does so after the states set their rules, the rebates could end up subsidizing some appliances that are not as energy efficient as they could be.

How Whirlpool Gets It’s Newest Products

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Ever wonder how that new Whirlpool, Kitchen Aid or Maytag appliance with all the newest technology came to the marketplace?  Well, Whirlpool, the parent company has formalized a process to sort through the thousands of ideas that, at any one time, are percolating up from product groups, new business development teams, and i-mentors — employees trained in innovation who have been deployed throughout the organization to identify promising ideas. From that first grab-bag of concepts, managers green-light several hundred for study, giving each a slice of an innovation budget that  ballparks at several million dollars for North America this year.

Ultimately, almost half of those flow into its innovation pipeline, which currently numbers close to 1,000 products. On average, 100 are introduced to the marketplace. “Every month we report pipeline size measured by estimated sales, and our goal this year is $4 billion,” says Norena. With Whirlpool’s 2008 revenue totalling $18.9 billion, that would mean roughly 20% of sales would be from new products.

Beginning Affresh

The process has helped Whirlpool find such innovations as Affresh, a hockey puck-shaped tablet that consumers can toss into front-loading washers for a cleaning cycle. In less than two years, Affresh, which works with any brand of appliance, has grown into a line of four products that Whirlpool expects to be an $80 million to 100 million business by 2015. Taking Affresh as a guide, here’s a look at how the Benton Harbor [Mich.] appliance maker evaluates new ideas.

Affresh came out of regular consumer research a few years ago: Water and chemical residues caught in the seal of the door of front-load washing machines, customers told Whirlpool researchers, were causing odor problems. [Not all of Whirlpool’s concepts emerge from customer research; Garage Gladiator — a line of storage containers and appliances for garages and workshops — was conceived in a sales and marketing brainstorm about how Whirlpool might develop products for rooms beyond the kitchen and laundry room.]

For an idea to be considered for development, it has to meet Whirlpool’s three-pronged definition of innovation: It must meet a consumer need in a fresh way; it must have the breadth to become a platform for related products; and it must lift earnings. [Add-on innovations are expected to deliver results within months, while new-to-the-world ones are given three to five years.]

Charles Martin, director of strategy and marketing for new business development, who led the Affresh development, already knew there was a consumer need. Four to six weeks of research and concept development convinced him he could clear the second hurdle too, by expanding into kitchen appliances too. And Whirlpool had good reason to expect profits. Sales of front-loaders are on the rise — 1.91 million will be sold this year, according to IBIS World — and the machines are expected to eclipse top-loaders in three to five years.

Clearing the Hurdles

Research findings are written up in a document Whirlpool calls an “opportunity brief.” The brief is reviewed by a 15-member panel of innovation experts and regional managers from across the organization, including marketing, sales, customer service, and engineering. This i-board meets monthly to review potential projects, and allocate funding. Martin’s team was granted several thousand dollars to continue development of the Affresh idea.

Roughly 40% of ideas that make it to this stage end up in the innovation pipeline. Those that don’t get tripped up by the next hurdle: the i-box, a three-page scorecard that forces innovation teams to be very concrete about expected factors such as revenues, technical feasibility, relevance to the brand, and market trends. “The i-box needs to make the case that there is a consumer need, that the concept meets it, that it does it better than existing products, and so on,” says Norena.

The i-panel then reviews the i-box, with each member scoring how well the concept meets each criterion on a scale of 1 to 5, with 5 being the strongest. The averaged scores determine whether a concept will be funded [at which point it officially enters the pipeline] or shelved. “Everything checked off,” says Martin of the Affresh i-box.

Whirlpool currently has some 1,500 projects shelved for a variety of reasons. An idea to create an “on the move” appliance for campers, for instance, was held because it strayed too far outside of Whirlpool’s home-focused comfort zone.

Thumbs-Down on a Steam Dryer

Ideas can also be held simply because of overall resources and priorities. Every year, Whirlpool sets a goal for innovation-related revenue for each product team. “We might say we want 80% of new revenues to come from innovations to core products, 15% from innovations that leverage or expand the core, and 5% from totally new innovations,” says Norena.

A concept for a dryer with a steam function, proposed in 2004, ended on up the shelf because it didn’t match up with that year’s priorities. Three years later, when the fabric care team began working on a relaunch of Whirlpool’s Duet line, the innovation manager for the laundry team reviewed the shelved concepts for features to include in the new machines. Duet dryers came to market in 2008 with the steam function. [Concepts can also be resurrected by the i-board, which reviews all active innovation projects and shelved ideas during an annual pipeline cleanup.]

Once Affresh and other new concepts officially enter the innovation pipeline, they go through Whirlpool’s standard stage-gate process. Affresh’s development differed only in that it was developed in partnership with an outside partner, a chemical company that Whirlpool won’t identify, one of Whirlpool’s first open innovation projects.

The first Affresh product — a three-pack of tablets for cleaning front-load washers — showed up in appliance stores in September 2007 at a suggested retail price of $6.99. Whirlpool won’t reveal specific numbers, but says that first-year sales exceeded Martin’s estimates by 200% and were robust enough for the company to expand distribution to national grocery chains such as Kroger Markets. Building on that, Whirlpool developed a more efficient product for service technicians and, coming next month, an Affresh-branded dishwasher and disposal cleaner.

Fisher & Paykel Struggling – Whirlpool Not Buying, But Sears is Selling

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Appliance manufacturer Fisher & Paykel’s debt is predicted to rise to next month as a result of the depreciating New Zealand dollar and a drop in sales. Its profits were expected to drop up to fifty-four percent.

The New Zealand company told investors in February that it was in talks with a number of parties in a bid to raise capital to help with debt levels, Whirlpool was thought to be one of the contenders.

David Graham, Whirlpool general manager of marketing for Australia and New Zealand, told the New Zealand Herald his company would not be the white knight. “At this juncture we are not seeking to acquire Fisher & Paykel New Zealand,” he said.

Commentators said there was only a small chance Fisher & Paykel would find a cornerstone investor to help take on more than $500m in debt when many companies were struggling themselves.

A Government bailout was unlikely and a capital raising from shareholders was the only real option for Fisher & Paykel, they said.

At the same time, Fisher & Paykel Appliances will launch a new brand of home appliances at Sears outlet stores beginning in April. The new Elba by Fisher & Paykel brand will be manufactured in Fisher & Paykel’s North American facilities.

Commenting on the new brand launch in the U.S., Mike Goadby, North American president for Fisher & Paykel Appliances, said, “The company is adapting a strategy it employed in the New Zealand market for the past 12 months with promising results. Fisher & Paykel’s decision to extend its brand is necessary to continue to promote company growth.”