RPT-Electrolux uses motor industry ideas in productivity push
(Repeats Thursday item)
* Electrolux calls end to moving output to low cost countries
* 30 pct of production remains in Europe, North America
* Group using motor industry ideas in productivity push
* Some analysts fret about high share valuation
By Niklas Pollard and Johannes Hellstrom
STOCKHOLM, March 19 (Reuters) - After shifting much of its production to low-cost countries, Electrolux is using motor industry ideas to cut costs and give it the flexibility to succeed in a fiercely competitive home appliances business.
The Swedish group has called an end to major plant moves out of Europe and North America. Now it says it is comfortable with making 30 percent of its washing machines, fridges and ovens in higher cost countries, provided a productivity push succeeds in ensuring plants there remain competitive.
This strategy, coupled with smarter R&D and a push up market such as into kitchens for the "foodie" followers of celebrity chefs, has raised expectations that Electrolux has found an exit from the commoditisation trap - making only cheap products that consumers struggle to distinguish from rivals' offerings. Continuación...