American Major Appliance Sales Fall Off A Cliff

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Consumers are partly to blame too

I feel that consumers are also partly at least to blame for this situation, in my experience in retailing in nowdays the average consumer just wants everything cheap and yet expects it to last many years, in other words they want Miele type quality but want it at Haier prices.
I do concede that there is a consumer is prepared to pay for top quality, but they are most definitely a minority these days, so I dare say manufacturers are just catering to the market today.
I remember the days when you could get a Hoover, Simpson or Malleys Whirlpool washer and it would last you at least 12-15 years with correct care taken of it, but those days are long gone and I would expect never to return.
 
The level of competition in the U.S. market from Asia in this sector is enormous.
It's only starting to build in Europe particularly with the arrival of Samsung. However, I think the major European brands are holding their own a little better than their U.S. counterparts did. That's poss due to EU consumers being a bit more brand loyal and because there wasn't a big technology shift.

In the US I think the switch from top loader to High Efficiency front loaders basically wiped out several of the U.S. washer makers as they didn't respimd fast enough to a rapidly changing market.
Then you had the likes of whirlpool faffing around with trying to make HE top loaders that produced bad results and got bad press.

Many of them had access to good FL designs from European sister companies that they could have adapted to the U.S. market very quickly.

Meanwhile Samsung and LG did exactly that and basically now define the HE category in the states.

I think it's a slippery slope once that happens.

In Europe Samsung now dominates the refrigerator category and is increasingly squeezing into the washer and dryer category too all built on the back of their successful mobile phone and TV businesses reputation.

I don't think either US or Euro brands are doing enough to counter this. It'll be like the TV market where you can no longer buy US or EU products other than a few rebadged jobs that are playing on nostalgia of old brand names.
In Europe in particular this is really, really dangerous as we've huge unemployment in the areas that tradionally depended on this kind of manufacturing like Italy and Spain.

I don't think we can roll back the clock on globalisation and at other ends of the scale were benefitting from very high value exports but I think we need to do something.

The social implications of huge levels of unemployment and turing old manufacturing hubs into rutst belts are enormous and the costs are very high.
 
Can't link to it but an article a while back said some major US mfrs are ditching Asia sourcing. Reasons given are all profit centered: Transit cost, and finance cost while inventory is frozen in transit. Lack of product integrity which translates into waste (can't pass initial tests), warranty costs (can't last a year without service), delays in resolving issues by remote control.

Not only those, but with China's rising expected quality of life, fewer are willing to work for a bowl of rice a day under conditions roughly equivalent to a southern state prison (google 'foxconn suicide'). Many go back home for Chinese newyear and never return; a whole new workforce has to be trained.

Both cultures (and especially ours) should have seen that the 'crap for cheap' model was not sustainable and should never have been pursued in the first place. But you can't tell an MBA he's wrong; in fact you can't tell him ANYthing, he already knows everything worth knowing. I've worked with them, at Dell.

Which dumped all US engineers (I was one) and threw it all onto Foxconn/China which recently took 5 BIOS revisions to get the case fan to work right. I'm not even a coder but I can write fan control firmware that works the first time. Geezus, there is only one variable! But think of the money they saved, replacing entire systems in warranty because they roared like bigfoot. Didn't spreadsheet that eventuality, did you bois? And poochscrews like that have frittered Dell's customer reputation from 'high' to 'bad'. Didn't spreadsheet that either.

I could go on but no need, you get what I mean. Most of us own an example of it.
 
China is already off the list of cheapest places to manufacture for exactly the reason you stated, Rick: Rising standard of living. The places currently at the head of the class for lowest manufacturing costs are Indonesia and India. Mexico is near the top of the list, as well.

I am surprised that GE/Electrolux beat omnipresent Whirlpool Corp. in US appliance sales in 2013. GE must play a significant role in those numbers.[this post was last edited: 9/27/2014-07:17]

frigilux-2014092706415005707_1.jpg
 
Something seems off. Electrolux just bought GE, right? So why are they being counted as one group for 2013 sales? Did they add both Electrolux/Frigidaire and GE sales together to get this?
 
" But you can't tell an MBA he's wrong;"

Someone please correct this if it's wrong but Richard Nixon is the one who "opened the gates to China". Every U.S. president for two centuries before, regardless of party, ignored China because it was (and STILL IS) the only way to maintain fair trade, labor, environmental and other standards among Western nations. The Communist regime now pretending to be China's government is godless, accountable to nobody and maintains its power almost entirely through fascism and fear. They've been our business partners since Nixon.
 
I blame the mindless

American that insists cheaper is always better. What else are we to expect from morons these days?

After all, flipping your car every 2-3 years because you are "bored" with it, dumping your 4 month old smartphone for another expensive abortion from Apple, paying a $200/month cell bill, the $275 cable/phone/internet package from Communistcast, dumping your wardrobe to replace with the next "trending" line of crap from some hip, fly, hot store, putting virtually everything you buy on a credit card, replacing your 3 year old flat screen with the latest and not so greatest piece of dung from Whoremart et cetera, there isn't much left in the ole bank account (assuming these dregs even have one) to pay more for an American made product. So they keep on keeping on buying the cheapest thus manufacturers have to go offshore lest they lose out on shelf space at your local BIG BOX.

And we sit around and wonder why things are such a mess.........................
 
Years Ago Now

Many former great appliance makers saw the handwriting on the wall and dropped their appliance divisions. GM Frigidaire, Philco, etc... IIRC all foretold to some extent that the market for major appliances was going to change.

The years before WWII and the immediate post war era were boom times for appliance makers. Between new inventions such as the washing machine, tumble dryer, dishwasher and further refinements to same the period was the heyday for those making and selling major appliances.

The market pretty much was wide open as these were all *new* inventions there was intense competition to sell to homes. Think many of us can remember well into the 1960's or even 1970's many homes did not have washing machines much less dryers. Dishwashers had not become standard equipment either. Refrigerators were something everyone wanted soon as they were able to afford (and their area was wired for electricity) out of concerns over health and food preservation. However it is well to remember even late as the 1950's in places like NYC people were still using had ice boxes.

Even when homes had appliances there was a constant technology war that caused persons to upgrade. A housewife of the 1940's may have been thrilled to get a wringer washer as a new bride. Later by the 1950's that may have been chucked for an automatic. Later still in the 1970's she may have gotten one of those new snazzy "electronic" units. And so it goes.

Being as all this may once the big post war "Baby Boom" and flight to the suburbs/new housing boom began to crest appliance makers saw or should have seen the trend. Much of their sales would now come from new families/households starting out and then to a lesser extent persons replacing or upgrading used appliances.

You also had advances in production and design which brought the price of major appliances down. Major appliances are called just that because at one time they represented a serious investment, often near or close to the average wage for half a year or more.

Each year just as with automobiles features/options that once were reserved for higher end appliances trickle down to their lower priced siblings. Indeed back in the day there often would be at least three tiers of models; BOL, MOL and TOL. Now you can get a BOL washing machine or dryer with TOL features. It won't be as well built nor last as long, but still....

All over the USA and Western Europe birth and marriage rates are declining. These and other factors have lead to decreasing numbers of new households being formed. Less new homes/households means less fitting out of kitchens, laundry rooms, etc.. with new appliances. As the linked OP article states the main demographic that *is* fitting out new homes/buying appliances are the well off to very wealthy. This group by the way also is where you find the highest rates of legal marriage by the way.

Long story short there is little to drive sales of major appliances. Most households only purchase new when their old breaks down and or they move house. The economic recession/credit crisis the world has just gone through (and in some cases still dealing with) has meant fewer homes being sold, tighter credit and many persons keeping the mousetrap tight as they pay down debt and try to save.

You see evidence of declining appliance sales all over by the declining numbers of major appliance vendors.

Sears once the king of white goods is dying a slow death. Lowes, Home Depot, Best Buy and other big box stores aren't doing well either. Then you have the ever increasing numbers of retailers that simply have closed up shop. What is saving the big online places such as ABT is they do not have to fund and support large brick stores.

Major appliances have gone from a luxury to a commodity. Persons purchase this or that to suit a need and often do not want to spend vast sums.
 
My guess Mark

is it will be closed and Electrosux will get some kind of tax write off for doing so and production will be moved south of the border. Maybe UPS will buy it and turn it into a training center or perhaps redeveloped into lots of low income housing as there will surely be a demand for it in 2-3 years or however long it takes to wind down US operations there.

They closed the Greenville fridge factory and GE already sources gas ranges from Mexico. Not having to pay a living wage and deal with those pesky regulations make a move to Mexico a no brainer.

If I were the folks at Appliance park, I'd be looking NOW for another career.
 
"Another career",  sadly I think you are correct Ben.   IIRC, Maytag's old digs  became a "call center".  Appliance Park  much larger has warehouse space that might still be used. Some of it would be perfect for a Jr. College, or an assisted living center for the elderly.  The worse thing is the loss of  jobs.  Very scary if you are nearing retirement age.
 
Electrolux did the same thing here a few years after taking over AEG - they closed every factory and moved production to somewhere where they didn't have to worry about paying employees enough money to make a living. 

 

Sales of AEG/Electrolux products in Germany did drop after that - but not for long, unfortunately. 

 

On the other hand, Miele reports ever increasing revenues and having hired over 400 more employees. Maybe (maybe) some people realize that plasic ain't always fantastic.
 
It's a shame and I feel for the people that may loose their jobs, but in the history of the USA what technologies have remained static?  The horse and buggy went out, the steam engine went out, gasoline cars jumped on the scene, now electric cars are on the roads and self driving cars are on the horizon. Light bulbs have gone from incandescent to fluro to LED(something that has lowered my monthly electric bills by about $16.) Windows desktop PCs were in, now  phones and tablets are in and PC's are iffy.

 

So over the years everything continues to change and,  I think will continue to change.  Best to learn to deal with change and do what we do with it.  Can't win by fighting it- thats never happened, and most likely never will.
 
Jerrod6--- You are so right: There have always been changes in the things that drive our economy, and the pace at which major changes occur will only continue to accelerate. The days of setting up a manufacturing site that provides jobs for several generations are gone, gone, gone. They are never coming back.

Immediately after WWII, a person could expect to work in a particular industry or for a particular company their entire career. Kids graduating from college today can expect at least 10 changes in employment during theirs.  

 

It's natural--although scary from the perspective of housing starts, etc.---that they have no interest in purchasing a home and settling down. Why buy a house if 4 years from now you'll take a job in Cleveland, and 4 years after that in Boston, and 4 years after that in Seattle? 

The goals of the next generations will be to keep their lives fluid and mobile, not settled/stable as with my and my parents' generations. And yes, that is a huge change in societal thought/behavior. The young are used to keeping possessions for a brief period of time. The average person changes phones every 18 months. I know no one in their 20's who plans to get cable. Everything in their lives is streamed via Netflix and Hulu. They don't buy DVDs, CDs, magazines or books. Everything is virtual.

 

To mock them for that is futile. It's simply the way their lives will be.  Their phones and laptops are the center of their work and social lives. That isn't good or bad, it's simply a fact of life.  Why weigh down your life with umpteen boxes of media to haul from one apartment to the next when it can all be carried in your pocket?

 

Why should they care if a washer only lasts 8 years when they'll have moved two or three times during that period?  Why own appliances at all?  Rentals are usually furnished with appliances and either have laundry in the apartment or in a communal laundry room.

 

Times are changing---times have changed---and that change will only accelerate, not slow down.  All the bitching in the world isn't going to bring back "the good old days." That ship has sailed.  It's painful to watch for those of us used to a more traditional scenario, but the priorities and goals of today's 20-somethings have shifted with the times.  Their adult lives will be very different from ours.

 

To mock their priorities because they have shifted away from those of my generation is missing the point. The world in which they will spend their adult decades will be very different from the one I inhabited.

[this post was last edited: 9/28/2014-18:57]
 
You got that right Frig

Just look at things! I remember a Pyrex liquid measuring cup was used to full capacity to measure a load of beloved powder detergent.

Now we have PODS! Egads!

Humor aside, I'd buy your scenario if I was not around to witness it. Sadly I am.

I agree that the one constant is change. Can't say I agree with the nature of the change nor do I resign myself to pulling in the oars and drifting downstream "just because".

One must have a passion in life. Or several if that floats your boat. To just accept things they way they are........well someone should have said that to Rosa Parks in 1955. Just go along Rosa, after all, you can't change society. This is the world we live in Rosa. Stop fighting. Just accept your lot in life. That woman changed history because she questioned and did not accept the status quo of her day.

Get the point?

There's nothing wrong with change if you agree to it. Last time I checked, plenty of people my age an older are still alive, still kicking, and still want durable products that perform for our hard earned money. Nothing wrong with that.
 
Then aim your bile at our parents' generation and our generation.  We are the ones who have allowed manufacturers to "get away with" what they're doing.  This has been going on since the early 1980s.

 

The content of your rants tend to be aimed at people much younger than us, who are inheriting---not creating---the current state of things.  The reason they aren't shocked that manufacturing has for the most part been taken over by 2nd and 3rd world countries is because that's all they've ever known.  They weren't alive when products were actually manufactured in the US.  As I mentioned in the previous post, they are preparing for lives that aren't based in home ownership and job stability. They will marry later and have fewer children. They will choose to spend their money in the service sector---for their meals, coffee, laundry, travel, etc.---to a degree that will probably horrify us. That is a huge but undeniable shift in the American mindset.  

 

Barring a catastrophic disruption of global economic transaction, those days are gone.  You're demanding a seat at the front of a bus that no longer exists.

 

The global doors were opened nearly 40 years ago.  The government is finding it very difficult to force corporations to keep their operations here, especially since growth areas for sales are India and China.  

 

As we Boomers age and die, the size of the American market will shrink even more rapidly, and the things the next generation prioritizes for purchase with their hard-earned dollars will be very different than yours and mine.

[this post was last edited: 9/28/2014-21:36]
 
Never Frig!

I got my own bus! It's called Speed Queen. I'm always in the front seat on that ride!
I even have an abacus too!

And I will corner the local market on powders! You'll see!

I may be the last one standing, but I will stand in clean laundry, always!

Sic semper tyrannis!
 
When that happens Frig

I will beg, borrow, or steal the funds to buy spare SQ machines. I'll roam Craigslist, Ebay and the like. I'll call in favors to borrow a pickup and move heaven and hell and everything in between to get extra units. Heck, I'll go to a wringer washer before I buy a new machine. Mark my words.

Then I'll cry, much as I did when Mobel Inc shut down.

Then I'll go do laundry as usual.

And I'll weep for the millennial generation who doesn't know better or just doesn't give a damn.
 
There are so many things that I agree on from both Frigilux and Washman. A lot of what Frig pointed out about our society disgusts me but is sadly true. Being 23, I find myself hating my own generation and those younger than myself because they've been raised to be so ungrateful and flighty. I align with Washmans point of view because I've said several times to myself that I'll hand wash dishes and swirl clothes in the bathtub before I'll give into this "I don't care how it's done, just do it, and do it in a way that I don't have to think or hear about it" mindset of today's world. My family, while they have their faults, has done well to teach me manners and responsibility, to teach me that to do something right, sometimes you have to give a little time and effort in exchange for results, and to teach me to always be appreciative of what I have, no matter how small, and to care for it as though it is irreplaceable, because in most cases, especially in this era, you'll never find something new that is as good as what you have now.
 
Quote, "in this era, you'll never find something new that is as good as what you have now".

That would put you at the forefront of the coming trend. So many things are cyclical. 'In this era' as it progresses, the "I don't care just get it done and don't bother me" perspective will become unaffordable to all but the trustfund tier who have 'people to do that for them'.

We'll be forced to seek value and manufacturers will be forced to provide it. This is just a very awkward time in the learning curve.

Or so I'd like to think, at my most optimistic. I'm getting rather tired of my cynical outlook being constantly rewarded by being right.
 
Happened w/ CARS, so it figures stuff we cook with and wash & dry with, not to mention even keeping our stuff cold should come next!!!!

Are we ever going to get a "Way It Used to Be", without "Living too much in the Past"????

-- Dave

daveamkrayoguy++9-29-2014-05-20-58.jpg
 
We'll certainly continue to see a trend of fewer companies manufacturing appliances.  The few that survive will sell globally.  It no longer makes corporate sense to aim exclusively at the American market, which is obviously shrinking. 

 

In my lifetime, all these companies have either sold off their unique brands to others, or they've disappeared entirely: GM (Frigidaire), Ford (Philco), Kelvinator (AMC), Westinghouse, Maytag, and now GE.  Many legacy brands are now simply badges attached to what amount to identical machines sold by a single corporation: Whirlpool/Maytag/KitchenAid; Electrolux/Frigidaire/GE.

 

Appliances are important and interesting to us because it's our area of interest.  To the vast majority, a washing machine has and will always represent a detested chore.  While we at AW tend to lament new machines that make laundering decisions on their own--water level; water temperature; wash time; number of rinses; spin speed--most of the world welcomes and embraces being freed from having to think about those things.  If the load emerges clean, why is that mindset necessarily bad? 

 

That doesn't mean those people don't care about/aren't passionate about other things in their world, it just means they can put less thought into a household chore they hate.  I'd feel the same way if laundry wasn't an area of interest for me.  Case in point:  I don't miss measuring detergent one single little bit.  I toss in a pod, choose the proper cycle, and load emerges clean using no more water and energy than is needed to provide those results.  This is a bad thing? 

 

Nor is the dislike of laundry a new phenomenon.  As a kid in the 1960s and '70s, I recall being horrified at my friends' moms lack of care in sorting, measuring detergent, choosing correct water levels, water temps, agitate/spin speeds, etc., compared to the way things were done in my home.  We tend to view the past, the good old days, with rose-colored glasses.

[this post was last edited: 9/29/2014-06:15]
 

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