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September
2008

Wolf: Where the Customer is Always on the Menu
Effective September 3, Wolf is recalling 24,000 48" ranges manufactured between 1998 and June 2008. The CPSC release states:

"Delayed ignition of gas in the 18-inch oven can cause a flash of flames to be projected at a consumer when the range door is opened, posing a burn hazard to consumers"

That sounds like the kind of exciting dinner party one is unlikely to forget.
There have been 97 reports of "delayed ignition" and 15 reports of "minor burns".
Do you think these 15 representatives of the nation's best and brightest, would term the loss of eye lashes, knuckle hair or 1st degree burns as "minor"?
There were 97 reports of un-combusted gas spilling into Wolf ovens, building up and finally igniting with an effect best left to Hollywood stunt men.
Were there 10 reports a year? Not bloody likely. With Wolf's huge sales ramp up since Sub-Zero acquisition, the bulk of the 97 are much more likely to be front loaded into the last 5 years....maybe last 3 years.

BUT WAIT....THERE'S MORE: Wolf is no stranger to "Delayed Ignition". In 2001 Sub-Zero / Wolf recalled 15,000 gas ranges sized 30, 36, 48, and 60" manufactured between 1996 and 2001.
        The 2001 CPSC release from archives.
        Our amusing report from 2001.
Were some of those recalled units in this recall? Did that recall solve those problems or create new ones?

See the CPSC 2002 report: GAS RANGE DELAYED IGNITIONS Tests and Examinations of Ranges, to see an analysis of the general problem (Wolf was not discussed) and to see photos of the business end of delayed ignition.

August
2008

At its Pinnacle
Effective August 25: Windcrest appoints Pinnacle distribution for the Southeast.

FCI Is, Was, and Forever More Shall Be, Fulgor
FCI, the North American brand of Italian cooking appliance maker, Fulgor, is coming home. The "FCI" brand has been chucked out for a new start with the old name, Fulgor. Not to be mistaken for Fagor or Frigo or Faber. Fulgor will be announcing its new distributor lineup shortly.

Financial Difficulties Galore
August 11
Barbecues Galore with 74 high rent corporate and franchise retail locations nationally is said to be at, what could be, an un-navigable hair-pin "bend in the financial road", so say several store managers, distributors, and industry insiders. BBQ's Galore was an Australian public company taken private by an Australian private equity investment group, Ironbridge Capital 3 years ago. At least some US franchisees claim to be doing well, though recently they were forced to take over purchasing direct from vendors.
There have been no public releases of information, and the corporate offices of Barbecues Galore when reached refused to comment on this story.
We will follow this story as it develops.
UPDATE Aug 15: Nothing. No news.
UPDATE Aug 18: Rumors Galore.....but still waiting for news
UPDATE Aug 18: Barbecues Galore files for bankruptcy, finally. We are always very concerned about using the term "bankruptcy" before bankruptcy is declared since the term is so final, official, and loaded with meaning, none of which is good. Terms such as "un-navigable hair-pin "bend in the financial road" allow for a nuance, an ever so slight spin, the possibility of anything, which we hope keeps the exits open and the lawyers at bay. In the process of filing for bankruptcy, Grand Hall takes a dive on the Taiwan stock market so steep that trading was stopped. So how stupid are we? August 11, we know that BBQG is down for the count, and we don't all sell their primary supplier, Grand Hall short. Duh. Bloomberg's Report.

Haier Denies that It will Buy GE
Haier denied reports in the Sunday Telegraph of Britain that it was teaming up with the Blackstone group to acquire GE Appliances.
Here's what we do know:
      -Haier wants deeper into the US appliance industry than it already is.....and wants it "crack addict" bad.
      -The sale of GE Appliances is conceivably a once in a lifetime opportunity a front seat.
      -That we, the hoi palloi, know that if the report is untrue, something very similar to it is true.

What we don't know:
Would GE make the one deal most likely to turn Louisville and possibly the entire American appliance industry excluding luxury products into a wasteland that only the protagonists in Cormac McCarthy's book "The Road" would recognize?

Of course we are being facetious ! If it could get them out of the quarter, GE Corp. would turn Kentucky and half of Tennessee into a sea of molten glass.

Middleby Buys TurboChef
Middleby expanded its commercial business and slightly added to its residential business with its agreement to purchase TurboChef. TurboChef indicated that the market slowdown and their Q2 results were key to the decision to sell. TurboChef promised to scale back its residential business following the sale......but the feeling is that the scaling back was already managed by the market. TurboChef launched aggressively styled ovens which broke with moldy traditions and all expectations to illustrate the dramatic difference in oven technology within. Turbochef ovens featured radiant heat, microwaves, and high velocity cork screwing jets of air. The speed of the ovens allowed Dominoes to deliver in 30 minutes, Subway to make bread on premises, and Dunkin Donuts and Starbucks to offer all those fancy sandwiches.
     Motley Fool
     BizJournal
-TMIO which had a slightly similar residential high tech oven strategy slipped under the waves with nary a whimper sometime before December 2007.
-Whirlpool's Polara range with TMIO type oven technology disappeared soon after launch.
-Thermador's CJ oven system, which used the same jet impingement oven technology as TurboChef was canceled in 1998/1999, shortly after launch. The blame for cancellation has been put at the feet of both technical complications and unwillingness on BSH's part to plow ahead to perfect a technology not of their making.
-Quadalux's Flashbake oven employed halogen lighting in a microwave-size unit with promises of accelerated cooking. Quadalux vaporized.
-Russell Range, (raise your hand if you remember Russell), introduced ambient pressure steam assisted cooking........and well....by now you know how this ends.

The most common high speed oven technology in use today is the triple combination of microwaves, radiant heat and convection first introduced by Thermador and now found throughout the industry (Sharp, GE Monogram to name a few).

UPDATE August 13: Reached TurboChef Senior VP of Corporate Strategies and Investor Relations Al Cochran. Mr. Cochran spoke of the day that TurboChef's plans for world domination started to come apart at the seams. The day in January that Starbuck's Howard Schultz announced that breakfast sandwiches just ain't what the "Starbuck's" experience is all about. The day that all Starbuck's North American operations immediately suspended purchases of TurboChef ovens which coincidentally aligned with the depths of economic malaise (a.k.a a word starting with 'R' which shall not be named). Mr. Cochran indicated that TurboChef will remain in residential and will leverage its existing relationship with Emeril Lagasse and Martha Stewart, but will reduce its overall expenditures in sales, marketing and product development. More of a "pull" rather than a "push" strategy. Several people involved in residential marketing and product development were released (canned) from TurboChef in May, but none are expected to be released (fired) as a result of the agreement with Middleby. Mr. Cochran said that it is expected that the combination of Middleby and TurboChef will result in greater efficiencies through supply chain management and therefore enhanced profitability.

What's the fine print? How does this effect all of our lives? There's a great chance that no one will be handing out samples of succulently roasted cow at the next KBIS. That makes me sad.

New Distributor and PR Listings on ApplianceAdvisor.com
ApplianceAdvisor.com welcomes to the Distributor Directory
     -Sunwest Distribution
     -Eastern Marketing Corp

ApplianceAdvisor.com welcomes to the PR Bazaar Directory
     -Merlot Marketing

Stay Tuned
As you enjoy the waning hours of your 2008 Summer doldrums spectacular, we are following these stories:
1) 10 hour/day, 4 day/ work weeks at Viking
2) Rumors of major-ish merger in Italy. (its only a rumor)
3) Weak Rumors of a major brand shopping around Italy for another acquisition.

Ola Aloha Kakou
Effective June 1st, 2008 Fantech president (and past Chairman of HVI, the Home Ventilating Institute) Ola Wettergren has stepped down from his position with Fantech. He has been replaced by Fantech VP of Sales and Marketing Glenn Thompson. Prior to his departure, Ola completed the acquisition of Emerson Ventilation Products.

A Death at Pacific Sales
I have never met Pacific Sales' retired buyer and GM, David Sheek, but the letter read at his funeral (attached) paints his picture in fine detail.
Sounds like the guy one would avoid running afoul of, but JUST the guy one would want to steer the ship.

July
2008

Loss in the Schott Family and to the Industry.
Jurgen Ausburn, retired president of Schott's Hometech group died July 28 in Bermuda in a snorkeling accident at the age of 66. Mr. Ausburn's group supplied the appliance industry with Ceran brand ceramic glass used in a myriad of cooking applications. Mr. Ausburn retired from Schott in 2002.
See Bermuda's Royal Gazette obitituary.

Faber's New Distributor
As of August 1, 2008, Milestone Distributors will be selling Faber for the Southwest in the following states: TX, OK, southern KS and southern MO.

Northland-Marvel New Factory
Northland-Marvel this week (week of July 14) broke ground on a new 275,000 sq.ft "innovation and manufacturing" center in Greenville, MI. The event was attended by state and local officials, the chief executive of AGA William McGrath, the president of Eastern Marketing Distribution Marty Friedman and a gaggle of Northland officials.
Michigan has been sucking wind for years longer than the rest of us. They deserve some good news.

Electrolux Yanks Your Hose? EXCLUSIVE
Electrolux is considering removing hoses from all of their top loading washers, over 300K units. Same price just without the hose. Who could complain with such a thrifty idea? Convert all that peripheral junk into an accessory, charge up the winger for it, and distill what's left in the box to the absolute minimum allowed by law. Not just chickens without lips, or snakes without armpits, but cars without tires, computers without operating systems, toasters without plugs, hoods without filters, grenades without the pull pin, dishwashers without racks, the risk without the reward, the mattress without the warning labels, the beer can without the pull top.

What Electrolux may be attempting in following Whirlpool, is a reinvention and restructuring of consumerism, the consumer experience and the basic expectation of consumers while consuming. Why, just imagine if the lobster came without the bib, or the baby without the diaper, the refrigerator without the door seal, the cold turkey without the DTs, the bellybutton without the lint, the natural gas without the fart smell, the pain without the gain, the dog without the ears, toothpaste without the tube, or the North American appliance market without a trace of the North American appliance industry.

Yes sir, we can see what Electrolux and Whirlpool are getting at....and damn if they won't be successful one day.

GE Employees Rethinking MABE's White Knight Status
The Montreal Gazette reports that only one year after securing union wage freezes and other concessions based on the promise of keeping a Montreal plant open until 2012 or 2013, Mabe indicated it would shift 2 of the most profitable product lines out of the plant to Mexico.
The factory was acquired by Mabe in its purchase of CAMCO 3 years ago.

Analysis: If the Gazette's article is the whole story, there's a truck sized loophole here in the union agreement.
Keeping a factory open is not synonymous with keeping the factory's 900 workers employed. One guy printing labels by candle-light should be just enough.

Whirlpool Closes Two Off-Shore Factories
Whirlpool is closing factories at two off-shore locations, at Puebla, Mexico and Oxford, Mississippi. Puebla production is consolidating into Whirlpool's Celaya, Mexico plant. Oxford production is shifting to Whirlpool's Cleveland, Tennessee plant.

1) The press release doesn't get into the details, but it doesn't take a rocket scientist to see what's driving the firing of 750 Oxford employees and the hiring of 500 new people in Cleveland. The economic slowdown has put gobs of slack in Whirlpool's Oxford AND Cleveland production....about 250 gobs. Consolidation improves plant and employee utilization.....and saves, by our backass estimate, about $7.5 million....assuming we have the currency conversion correct.

2) To my dear friends at Northland and Marvel: This is how you close a factory.
Read what the mayor of Oxford has to say about Whirlpool: Clarion-Ledger.
Compare this to what was said by Richmond, Indiana officials when Marvel announced closure of their factory in May 2008. Click

GE Considers Spinning Off Unrelated Businesses
GE is considering spinning off GE Capital, GE Healthcare, NBC Universal and GE Infrastructure representing 79% of corporate revenue, and 90% of corporate profits, leaving GE Consumer and Industrial, the historic core, the soul of the company, which includes, appliances, lighting and whatever "Industrial" is. GE stockholders are said to be thrilled at the prospect of distilling the most profitable and most distasteful segments of the corporation into a separate entity as long as Jeff Immelt is carried out with the tide, and a pretty engraved stock certificate for the separate entity arrives in the mail.

The Advisor is a big fan of cutting out these unrelated and distracting businesses, but is hoping to sway the powers that be to keep the Infrastructure Division, which makes such excellent mega-machines as locomotives, steam and gas turbines, windmills, and jet engines. How could such glorious smoke belching, freight moving, energy converting, wind harnessing, and earth shrinking industries, which define the very greatness of what this country once was and stood for, be forced to bed with the white shirted do-nothing, number crunching, pedicured, weenie geeks at GE Capital who represent in their wheezing pale decrepitude what this country has been reduced to? NBC's "30 Rock" should stay as well for story continuity.

UPDATE July 26: GE announces restructuring plan which includes splitting GE Infrastructure, our second favorite division, into two pieces thereby marooning Jet Engines and Locomotives in a new division called GE Technology Infrastructure, with Healthcare and Enterprise Solutions. See news article.
Dear Jeff: Why must you take us all down with you?

Changing of the Guard at Standards of Excellence
Effective July 31, Standards of Excellence VP and GM Dick Tipton, is retiring. Dan Post who is president of ABD West will temporarily fill the position
Mr. Tipton has served our beloved industry as Sales Manager at Sierra Select Distribution, Senior VP of Sales at BSH, VP of Sales and Marketing at Thermador during that brand's golden pre-BSH years, and Zone Manager at GE.

Luxury Institute Poops a Press Release
July 8
Appliance News published the top 10 prestigious luxury appliances as "researched" by the New York-based "Luxury Institute". This is an institute with a phone number that goes direct to voicemail....no receptionist it seems. Appliance News reported:
     "The top 10 rankings of luxury appliance brands were:"
     1.La Cornue
     2.Bertazzoni
     3.Viking
     4.Wolf
     5.Sub-Zero
     6.Gaggenau
     7.AGA
     8.Thermador
     9.Bosch
     10.U-Line"

Really? La Cornue #1? Bertazzoni #2.....even in the top 20?? Bertazzoni more prestigious than Wolf or Sub-Zero or Gaggenau!!! Really!!! Are we talking about the same Bertazzoni with economic Italian pro-style products ....or is there some other Bertazzoni we are not familiar with?
U-Line is lovely, but so prestigious as to be in the top 10?
Just think of the brands not in the top 10: Dacor, ASKO, Liebherr, Miele, TurboChef,
     -Were the brands presented to the 1880 wealthy consumers surveyed, or did the consumers come up with brand names on their own?
     -If the brands were presented, who was on the list?
     -Was the list longer than the 10 brands listed above?
     -How did they find these 1880 wealthy consumers?
     -Were these wealthy people residing in the United States? Did they speak English? Were they screened for mental illness or dementia?

Oh....see it says right here on the website....why didn't we read this?
     "The annual Luxury Brand Status Index survey is a proprietary survey methodology and index..."
     "The LBSI incorporates four main "pillars" of brand value:
               Consistently superior quality
               Exclusivity and uniqueness
               A measure of enhanced social status
               A measure of the brand's ability to make a customer "feel special""
Nothing gives one a "special feeling" like reading survey results based on a top-secret survey method from an "organization" which does not answer its phone during business hours. Can any idiot get their crap published? Hmmmmm.....ahhhhhhhh....scratch that last question....................

Where were the Appliance News fact checking goalies?

UPDATE July 9: Luxury Institute CEO Milton Pedraza reached us and spoke to us both BEFORE and AFTER reading the above report. Mr. Pedraza was the gentleman for both calls, though we preferred the first call. He was firm in his belief that the survey methods were correctly used and the results were honestly developed. He defended the Luxury Institute as a virtual organization with associates all over the country just not physically in the New York office, and as a market research consultant with clients all over the world and as a resource quoted in thousands of articles. We apologized for our over-the-top characterizations, but repeated our assertion that something's fishy in Denmark if Bertazzoni, as much as we like them, is #2. We also raised other issues we had with the results. We offered Mr. Pedraza the opportunity of responding to our piece (as we do for all of you slugs) and hopefully he will see past our intemperate analysis to do so.

UPDATE July 10: CEO Milton Pedraza of Luxury Institute Responds
Thanks for the opportunity to respond. The Luxury Institute is an impartial, independent and objective entity, over five years old, and with hundreds of luxury brands buying our ratings surveys annually across dozens of categories. Our surveys are conducted with independent, unbiased panels and are weighted using Federal Reserve data to reflect national results. The results are tabulated by external, independent analytical experts to ensure a level of transparency and objectivity that has earned the trust of consumers, the industry and the media. The list for the Appliances survey was created by consulting industry experts and manufacturers, as are all the lists we develop. We strive continuously to reinforce the trust that allows us to facilitate a constructive dialogue between wealthy consumers and luxury brands via our surveys. We stand by the results of this survey, since they reflect the voice of wealthy consumers. We also truly welcome constructive comments that help us improve the list and our survey methodology. To this end, we welcome any and all list changes suggestions.
Please come to the Luxury Institute site at www.luxuryinstitute.com
     -go to the contact page, register, and please provide your suggestions. We welcome them openly and in a spirit of continuous improvement and look forward.
Thank you for your journalistic integrity and the opportunity to comment.

UPDATE July 10: Final Note on the subject
Mr. Pedraza provided some information on the methods used. A list of 20 brands was created from input from the industry and used in the survey. We didn't ask who from the industry was involved in creating the list, but we did ask which 20 brands were on the list.
And they were:

AGA
ASKO
Bertazzoni
Best
Bosch

Dacor
Fisher & Paykel
Gaggenau
GE Monogram
GE Profile

Jenn-Air
KitchenAid
La Cornue
Miele
Siemens

Sub-Zero
Thermador
U-Line
Viking
Wolf

UPDATE July 11: Where are our manners? Bertazzoni, through no fault of its own, was deeply mixed up in our story....which is really just half the story. The general feeling in the industry is that Bertazzoni has been hitting doubles and triples since entering the market. Perhaps this is the survey result most important to Bertazzoni.

Miele Recall
Effective May 29, Miele is recalling 3100 "Super Large Gas Dryers" for possible gas leaks caused by loose internal gas fittings. There have been 11 reports worldwide and 1 fire causing property damage. See CPSC
Interesting Timeline:
   -Units were sold March 2007 through December 2007.
   -Units serviced for this or any reason since January 23, 2007 have been inspected for gas leaks and repaired.
   -CPSC recall effective May 29, 2008.

Come close to the campfire........for this part of the story is more spooky.
   -Miele likely received complaints of gas leakage long before December 2007, but finally made changes to production in December.
   -Though production changes were enacted in December 2007, the servicers were not alerted to the gas problem until January 22, 2008.
   -127 days after the Service alert, at least 149 days after the production change, and between 200 - 400 days after first understanding of a systematic problem, CPSC releases an official recall notice.

What don't we know?: Did Miele start the process of contacting ALL owners of this appliance in parallel with the January 22 Service Alert and outside of the CPSC process? An action such as that would demonstrate Miele's understanding of the magnitude of the problem even before finalizing and approving a fix with the CPSC. This would show good faith........and who doesn't like a little bit of good faith when we are discussing a potentially gas spewing death machine.

Stay tuned.....we are still looking.
UPDATE July 21: Received a call from Miele. Information was to the effect that Miele did understand the importance of the problem. Problem was first identified in factory QC testing. 11 global gas leaks were not proved to be related to the problem but were reported to CPSC as is the process. 1 fire was not related to problem, (lint related). Miele proactively contacted CPSC in advance of setting out the recall path, simultaneously contacted effected customers, a process delayed by digging through distributors and dealers to get to the names of the end users. We are expecting an official communication from Miele, which we will reprint here. The reprinting here awaits the return from vacation of the Miele Service manager and the crew of ApplianceAdvisor.com.
UPDATE July 31: See official comment from Miele.

June
2008

Sextuple Bypass Effective July 1, 2008
Sirius, Italian manufacturer of high-end rangehoods, has reconfigured its North American product distribution.
     1) Sirius distributors will purchase product in container loads directly from Italy instead of sending orders to, and taking product from, the Sirius USA warehouse.
Sirius said, "This positive step has been taken in order to eliminate the unnecessary cost of a lengthy distribution chain and to ensure that the product line remains price competitive under the current and evolving market conditions."
Other changes:
     2) Sirius Italy will take over the management of marketing, promotion and show planning.
     3) The Sirius USA warehouse will be closed effective July 1 2008.
     4) An inter-distributor inventory management and shipping program has been structured to ward against stock-outs and trans-Atlantic backorders.
     5) A MAP (Minimum Advertised Pricing) program has been launched to limit cross territory internet sales.
     6) Sirius USA President Allen Lombard takes on the newly created position of North American Market Dvlp Mgr directly with Sirius Italy.
Sirius said they "will of course continue with the high standard of customer service and after sales support through a national service company."

This Time Next Year: News from June 2009
1) Sales growth of combi (all in one) washer/dryers and compact washers and dryers.
2) Death of the Side by Side refrigerator reported.....and not a moment too soon.
3) Luxury brands launch down market "aspirational" and "builder" product lines to leverage brand equity and protect annual revenues.
4) A new day for (2) step distributors as economic priced smaller import brands gain a foothold.
5) Average gasoline prices temporarily rest at the $4+ per gallon level unless Israel attacks Iranian nuclear facilities and air force assets...then gas hits $8.
6) The premise of appliance sales over the internet teeters upon the cost of national shipping.
7) Luxury brands follow GE Monogram and Fisher Paykel / DCS to Mexico.
8) Pro-style dies...finally. Death certificate indicates cost of stainless, smaller homes, a failure to perform, and inane ergonomics. Pro-style is a joke manufacturers have pulled on consumers who think they can cook. Euro-style grows to take up the slack.
9) Explosive growth of projects for development of urban-ring condo towers convenient to mass transit.
10) Un-gentrified urban wastelands rediscovered. Displaced poor and working class continue shift outside outer ring, secondary urban areas and hopelessly set adrift in suburbs.
11) Kitchen remodels drop. Appliance sales trend away from discretionary upgrades to failure related urgent replacement.
12) Dealer and distributor inventories grow to improve service levels.
13) Mom and Pop dealers finally catch a wind. (this is good)
14) Birth rate drops slightly...except in Gloucester. Future Gloucester appliance sales expected to be sterno-related.
15) Home ownership drops (confirmed by NYT). Rental rate stays level or drops. How? Single occupancy rentals drop and "Boomerang Generation", (grown children moving back with parents), includes growing number of grown married children with children of their own.
16) Pure electric non-hybrid vehicles become the de rigueur 2nd vehicle inside the urban ring. First thousands arriving from China are 3-wheeled enclosed vehicles registered as motorcycles.
17) Electric space heating gains. Wood pellet industry gains strongly
18) National average electric rates rise to 15¢ KWH even before carbon tax, with 20¢ and 25¢ impatiently waiting in the wings.
      Note: Assume in 10 years that actual appliance electricity usage cost to be at least 3 times higher than the DOE Yellow Card estimate.
19) Green marketing of polluting brands and products explodes with mixed results. Marketers wrestle with the problem of trying to educate and sensitize the consumer but not so much that they understand the issue. (coal, hybrid SUVs, BP, and some of our favorite appliance brands).
20) GE appliances languishes unsold like a Florida condo. Its perceived value falling faster than GE can adjust its selling price.
21) UPDATE: Two needs mutually satisfied? Florida's empty homes and condos are rented on 6 month leases to northern retirees fleeing winter heating costs
22) UPDATE: Northern plumbers tied up October through December winterizing homes of newly minted snow birds.
23) UPDATE: Miami Dealer. Miami's general contractors & roofers are backlogged 6+ months since 2008's Cat 5 hurricane "Fiona" destroyed or damaged 80% of the homes. With power grids finally back on-line, construction is full swing. Californians fleeing sky-high taxes and inflated property cost, and unimpressed by Florida's insurance costs, are shopping for bargains among Miami's abandoned properties.
24) UPDATE July 11: The city of Palmdale, CA a city founded on cheap housing, long commutes and cheap gas, a god awful distance from Los Angeles is discovered to be uninhabited by girl scouts selling cookies.
Plan accordingly

IS THERE ANY GOOD NEWS OUT THERE?!!
We need just a little bit of good news, even the smallest morsel, the thinnest thread of something remotely positive in the appliance industry. We'll take what we can get.

UPDATE June 23: Manufacturer
Custom hood maker Metallo Arts plans to double workforce in next 6 weeks to meet growth since KBIS. Also will be location of "American Chopper" type reality show.

UPDATE June 18: Manufacturer
Part of my morning routine is to check the latest news on your website. It must be bad out there when you have no good news and no job postings on your website. As much as I hate to admit it, there is something to be said for the Celtics win over the Lakers. I’m not a huge sports fan, but I am tired of all the over-paid athletes with a major attitude (aka Kobe Bryant). So be proud my friend, that Boston has brought it home & rightly so. Congratulations on the Celtics win! There must be dancing in the streets right now – don’t party too hardy!

UPDATE June 18: Southeast Dealer
I am not sure what is going on elsewhere, but a little ole distributor in the Carolinas and Virginia is up 10% thru May with the best June we have EVER had going so far! Life is Good!!

UPDATE June 17: Northeast Dealer
In the last 6-12 months, my sales of energy efficient appliances have exploded. We live in a country built around cheap fuel. To have prices skyrocket in just a few short years is certainly a difficult adjustment for everyone but it's a good thing too. In a few more years, as we make adjustments, it won't bother us anymore. The general public is finally aware of the savings involved in energy efficient products such as appliances, vehicles, etc. Perhaps the public will finally realize that the $299 washer costs far more over its life than a more efficient model.
Smarter consumers and more sales of more efficient appliances, will be good for all of us in the long run. We'll tough it out this year, but next year is the beginning of the next boom. As people make the proper adjustments in their lives, things will start to pick up again. Just give it time. Things will be good.

Sub-Zero Dips Toe in Costco CONFIRMED
The Sub-Zero free standing wine storage unit model 424FS/G is available at both the Oak Brook, IL and downtown Chicago (Lincoln Park) Costco locations with a list price of $2750, about $600 less than UMRP. Is it just us, or does that seem expensive?
These units are not listed on the web, nor available in every Costco region (there are 6). The full extent of availability is unknown.
Wringing out an overstock perhaps? Dent and Ding units are unlikely. A distributor dump through Costco is unlikely. Evidently whatever the driver, independent dealers are having a hard time squaring Costco availability with the mandatory floor plans and rules of UMRP that they do business under.
We said this kind of thing couldn't happen. Don't we look silly.

Unanswered Questions about the 2008 KBIS New Products Pavilion   EXCLUSIVE
June 15, 2008
110 products were in the Pavilion paying $350 for table display and $600 for floor display. Votes were collected from visitors for Best NEW Kitchen and BEST new Bath products. The Lance Larkin 10-cup coffee maker was voted winner in the kitchen category, beating out the kitchen products listed below. Video of Acceptance Speech
     -American Range French Door Wall Oven
     -American Range Outdoor Steakhouse Broiler
     -American Range Hybrid Range
     -Broan QDE Range Hood Series
     -Broan Elite XE Trash Compactors
     -Capital Cooking Equipment Precision Series 30" Self Clean Ranges
     -Euro Cast Design Inc Ultra-Light Cast Travertine Kitchen Hoods
     -Fagor New 24" side door opening convection oven
     -Fagor New Induction Cooktop
     -Fuji decorative Keystone Chimney Hood
     -Lance Larkin 10 cup Brew Express: Voted Best New Kitchen Product of 2008
     -Liebherr CS 2062
     -Liquid Stainless Steel faux stainless paint
     -Metallo Arts Inc Kitchens
     -Perlick's Fully-Integrated Signature Series
     -Scotsman Gourmet Clear Ice Machine
As much as we like the spunky little company with the niche built-in coffee product, the addition of a 10-cup product to their 4-cup model is not, to us, the makings of a "Best New Kitchen Product". We wondered what the voting looked like, but after 2 months of trying to get the voting results from the KBIS PR firm Trent and Company, the KBIS sponsor K+BB, we finally heard back 2nd hand from show producer Nielsen Business Media (owner of K+BB and a sibling AC Nielsen the TV ratings service).

I just heard back from Atlanta and unfortunately, they said that they don’t release that information.

Nielsen refused to respond to us directly. We contacted a few of the non-winners who had paid to enter the Pavilion and the competition, and they were not provided voting results either. The New Products Pavilion generates between $38,000 and $66,000 for Nielsen. The winner nets real marketing value. Though we have nothing to indicate anything untoward took place in the competition, our difficulty in obtaining the results does make the imagination do a back flip.

The structure of the New Products Pavilion competition MUST be reorganized BOTH to eliminate the potential for corruption AND to build a foundation of legitimacy and propriety for the competitors.
     -Voting MUST be tallied by a 3rd party
     -Voting results MUST be made public
     -Voters should vote for up to (3) different products in Kitchen and another (3) in Bath, not just one each.
     -Voters MUST have their identities "scanned".

Our choice? We love you all, but did you see that Liquid Stainless Steel? That stuff looks great. Why didn't someone think of that before?
We know, we know..... it's a cop out.

Sunday's Digression Digest
June 15, 2008
For anyone who has read or written an appliance manual, read Lenore Skenazy's diatribe against product information which assumes or maybe confirms that consumers are imbeciles at best. Unlike the Crayon industry discussed by Ms Skenazy, our industry has proof that consumers are not nearly the equal to the appliance responsibilities they have taken on. Just imagine how much better all our lives would be if Appliance-Ed were up there with Driver's-Ed, and Sex as a right of passage.....sigh.
A few quotes from a randomly chosen rangehood manual:
     -"Do not touch the bulbs immediately after use. The bulbs will remain hot for several minutes."
     -"Before servicing or cleaning the unit, switch power off at service panel and lock service panel."
     -"NEVER PICK UP A FLAMING PAN, you may be burned."

As our customer's ability to read or just focus on a single thought for 15 seconds declines, we have, in inverse proportion, perversely responded by creating all encompassing User Manual monstrosities. How long until our manuals provide instruction normally covered by the autonomic nervous system ("upon tightening the screw, exhale fully"). Can we not assume a certain level of common knowledge of our customers with the understanding that those who, regrettably, get cut from the team were simply lucky to have played this long. Let's dedicate ourselves to keeping manuals to 6 pages or less.

Lenore Skenazy also recently gained a level of infamy and our admiration for allowing her 9 year old to travel New York's subways alone. This reminds me of my frequent weekend 4 mile bicycle treks to my grandparent's upon my beloved Raleigh Chipper when I was 6. The route was an old sharply curved Indian path that had been widened to allow 2 cars to pass, but not 2 cars + 1 bicyclist. The Sports Man's Club was a rough blue collar bar in the neighborhood which produced an endless variety of long remembered wrecks. Every tree, or rock or telephone pole on those 4 miles had a story, or several. The human blood puddle which formed with each rain storm at the base of the tree notable for the motorcycle disc brake jammed several inches into it. Mooney's Hill where a sudden downward angle and veer to the right gave several motorcyclist the momentary thrill of weightlessness followed quickly by the perpetual downer of death or paralysis. The family on a curve that installed several cubic-yard blocks of concrete to protect house and lawn from the regular roll overs. Seems to me that a 9 year old on the subway is no great shakes.

UPDATE June 23:  Reader Comment
Way back in 1989 I was a rep for the Miele line of vacuum cleaners. As a motivated sales rep, I while reading the user manual as product training, I came across a passage that said something like:     "Do not pick up gasoline or flammable liquids".

In a discussion with some of the top people at Miele, the subject of the user manuals came up. The context of the discussion was that the manuals were printed English language translations of the German language manuals, and sometimes there were comical results. I raised the issue of the passage about sucking up gasoline.

Surprisingly, not only were they aware of the passage, they had a story about why the passage was included. Seems there was a high end yacht several miles off the east coast. The yacht had a gas leak, and the 'customer' apparently used the Miele Vac as a wet vac to suck up the gas. The resulting explosion sunk the yacht - and now every Miele Vacuum user manual warns against sucking up gas.

20 years later, here is the actual current manual verbiage: "Do not use to pick up flammable or combustible liquids, such as gasoline, or use in areas where they may be present. The vacuum cleaner could explode."

Franke Exchange EXCLUSIVE AND CONFIRMED
June 11, 2008
Franke North America President Michael Babula left the company on Monday June 9, and may have been shown the door.
Sources tell us that Mr. Babula was brought in from Baldwin Brass by his predecessor, president Helmut Brockelmans. Mr. Babula replaced key Franke-North America managers with more Baldwin Brass people. The Baldwin team tried to merge Kindred and Franke brands together with disastrous results in sales for both lines. Franke North America then tried to force its distributors to take on a new Franke branded hood line or else lose the sink and faucet lines. Dealers and distributors are peeved over deliveries since Mr. Babula moved the Franke brand sinks from the Hatfield, PA headquarters warehouse to the Ruston, LA manufacturing sink plant & warehouse. Sales have plummeted.
The next president has a hell of a mess to clean up.
No replacement has been named.

FUEL PRICE CRISIS / RECESSION : REQUEST FOR READER INPUT
What are you doing, thinking of doing, contemplating doing, or heard that others are doing?
What is your business doing to counteract energy prices and the recession?
     -Employee programs
     -Spiffs, discounts
     -Freight ideas
     -Product mixes, shift reductions, layoffs, material changes, project cancellations
     -Reduced work days.
All Comers: Manufacturers, Distributors, Dealers, CKDs. Named or Anonymous.

UPDATE June 13: Distributor:   Faxon Sales (New England)

Here are two things we are doing at Distributor XYZ in response to fuel increase and slowed economy:
1) Starting June 16th, we are now charging a $15 per stop drop charge
2) We are beefing up our inventory, that's right, increasing our inventory. As dealers, groups, distributors and supply houses look to cut costs by lowering inventory levels - if we have it and the competition is 4 weeks out, then hopefully we get the business.

UPDATE June 13: Dealer

This year, we are up a bit in high-end appliances (80% of what we sell). High-end buyers are a bit more selective, but buy nonetheless.
-Some mid-line customers have asked about green alternative appliances, but only if they don't cost any more.
-Electrolux is just beginning to steal some high line thunder
-Fascination with mega BTUs is waning, induction cooking is waxing.
-Distributors, not manufacturers, are offering rebates on high line appliance for the first time in my experience.
-UMRP has crept down to accessories, one of the few places we formerly "wiggled" for good customers.
-We still offer limited free delivery, but those outside a 25 mile radius pay by the "outgoing mile" for delivery.
-We no longer offer warranty service on appliances we did not sell if more than 25 miles from us. At the rates manufacturers pay, it is simply un-economic. No manufacturer has objected to this yet
-Apropos of nothing in particular, the BEST warranty reimbursements we enjoy are Firemagic Grills and Fireplaces from Empire Comfort. Their failure rate are admirably low, so they can afford to be human. And by-god, we actually make a profit selling this stuff.

While common grill sales have tanked, high line outdoor kitchens have become more sought after.

UPDATE June 12: Florida Dealer

We are expanding. Added one line, and booting a few others. We are looking to the high-end even more.
Excess real estate inventory means buyers have 80,000 condos to chose from, so sellers needs to stand out. As an appliance guy, my answer to the builder / owner is “look at that kitchen!” We ARE the label in your home!!! As far as appliances go, now is the time to spend more, not less!
Our numbers are up. Can't say how. We keep positive, adapt our conversation to the new market, and work the streets! You work harder when times are hard. (-;

What I see.
-Sub Zero is pushy, they should be careful. People are talking about how little they want to be pushed these days.
-Hadco is working extra hard .. and its hard not to return the favor. Same goes for Miele, those guys just seem to show up even more often and work with us even more closely. Whirlpool, pushy, but we need them, and the rep works well with us, but we've added some competition to the floor with Frigidaire and Icon.
-These days, reps that show up earn a lot of respect and loyalty. The better they serve us, the better we serve the customer and the more reason a customer has to work with us. Rep’s assist in that role a great deal.
-Pricing: I have not changed a thing. I do back flips when I get 15 points on domestic lines. As apposed to what you (ApplianceAdvisor.com) have written, UMRP pricing at 18 points is far from abusive and goes a long way to keeping the lights on. I hope to see more of it.
-Distributor numbers . .down 20 to 40% from what I am hearing
-Gas . . well you said it already. Probably will be good for condo’s in the city, bad for single family homes an 1-1/2 hours of gas-burning rush-hour traffic away. We are giving away fewer free deliveries.
-A few of us think a few good oil wells off the coast would add new well paying jobs and new opportunities for us, we can only hope. Here, middle class opportunities are disappearing. There are no homes under 300K, and no jobs that pay over 100K to buy the homes we have + cover the crazy tax + insurance costs we are buried in. What's left: Tends to be very high end, or bargain basement working poor these days.
-Things are what they are, and other than the fact we have increased sales a little and expect more in the short term . . we see what everyone else sees . . . bubble burst, and the market is adjusting. Gas is the problem, but that’s 50 years of stupidity coming due, so in a way, just a kind of bubble bursting again. We will adjust to it as well.

UPDATE June 11: Really!? Nothing!? As the world of cheap and convenient transport disappears you guys have done nothing to compensate? Go figure.

SMEG Grand Opening of their 1st USA Showroom

BSH Change at the Top
BSH President Franz Joseph Bosshard steps down to take a global business development position reporting directly to the chairman. Mr. Bosshard joined BSH USA from BSH China in March 2002.
He will be replaced by globe trotting BSH executive Michael Traub coming from 4 years as CEO of BSH Latin America (with prior stints in Suttgart, Singapore, Munich, San Paolo)

Boston Group Change at the Top
Sherman Revola, head-honcho at the Boston Group unexpectedly resigned his position. The Boston Group is a warehousing sub-group of the Nationwide Buying Group and made up of 100 or so independent dealers throughout New England. The Boston Group provides member dealers warehousing, cross docking, pricing, and shipping services giving them a huge leg up on the chains and big boxes.
Sherm is hugely popular in the group, but his fan club of 100 dealers are left wondering why he left.
Jim Cunningham has stepped up to take over his responsibilities on an interim basis.

Smeg Finds Love
Smeg announces that it has appointed Pinnacle Express to distribute in the southeast.
Smeg and Pinnacle are both ApplianceAdvisor.com advertisers, and we always feel a little pride when we help make the perfect match.
Mazel tov!!

Are you looking for love in all the wrong places? Find a love that will last longer than a 30 day cancellation.
Advertise on ApplianceAdvisor.com

Sub-Zero Delays Dishwashers
As part of the belt tightening at Sub-Zero, the dishwasher factory slated for Richmond, KY will be delayed 18 months, moving production from 2010 to either 2011 or 2012.
Viking's dishwasher is already 4 years late. Dacor's dishwasher nearly drove the company into the ground, with production stopped to work out the kinks and not restarted for 2 years.
If there was anyone who expected Sub-Zero to start producing dishwashers in 2010 no matter the economy, they haven't spoken to us. It is good news for ASKO.

Sub-Zero Rumor-mill not Entirely Rumor
Madison Wisconsin's Capital Times reports today June 2, that Sub-Zero is releasing 27 salaried employees and eliminating 16 open positions.
See the story
We've been following up several tips on this the last few days. The key point for us, and it turns out for Sub-Zero relates to whether these salaried employees were part of the original April reduction (removing the band aid with a quick fast pull), or if they were a new and unrelated reduction (death by a thousand cuts, shooting prisoners and deserters, blowing up the bridges, retreating in chaos). We could find nothing to verify the contention that these were new actions, and so did not post here. Sub-Zero's official position is that these were part of the original reduction, that there was a conscious corporate goal to measure twice and cut once, and having gone though a 6-wave layoff in a past life, I applaud the effort. If you have evidence to the contrary let us know.

During our investigation of our tips we inadvertently and unfortunately participated in the story for which we were taken to the woodshed by a SZ executive: our probes of SZ had resulted, we were told, in the creation of a new free standing rumor inside the company.

So while we were feeling terrible about this, we found today's (Monday 6/2) Capital Times story in which VP of HR Chuck Verri is quoted in an email to SZ employees:

"As we continue to monitor fluctuations in product demand, and as has occurred in the past, there could be additional adjustments to production............While layoffs are very unpleasant, it is important that we act to manage the business."

Yikes. If this is the official communication to SZ employees, there's little that ApplianceAdvisor.com can do to make the staff more nervous.

Update June 2: Wisconsin State Journal reporter Judy Newman characterizes the layoff as a 2nd round: "Another round of job cuts at" SZ/Wolf.
Update June 2: Capital Times reporter Lynne Welch quoted Chuck Verri: "It was a general reduction across all departments really as a follow-up to what we had done earlier in April"
Update June 2: We were assured by SZ on Friday May 30, and Monday June 2 that this is all a single layoff.
So let's summarize:
     We laid off in the past.
     We are laying off now, and it may or may not be related to the earlier layoff.
     We reserve the right to layoff in the future.
So much for measure twice and cut once.

GE Continued
June 1: Reuters reports that LG has denied that it had been approached by Electrolux to formulate a joint proposal for GE appliance, as had been reported in the Korea Economic Daily. The point of the proposal, if true, would be so that Jackal-like, they might tear GE Appliances limb from limb from limb.
June 13: Business Week story published May 29, summarizing LG's position, Click

More Whirlpool Hose Yanking News
This is not news.......just another documentary nugget.
Whirlpool's May 1 Letter to the Dealer

Our earlier thrilling installment of the Whirlpool hose imbroglio.

May
2008

Big Layoff at BSH
BSH released an estimated 10% of its workforce, located throughout the continent, from the continued hardship of full employment. What free spirited ex-employee would not thrill at the pre-summer timing of the layoff? There must be dancing in the streets.

New Theory: Oldest Profession is Appliance Sales and NOT Prostitution (and Yes!! there's a difference)
Harvard anthropologist theorizes in January Scientific American article that our big human brains are the result of switching from raw to cooked foods millions of year ago.
And "Cooking", as we all know, means there's gotta be a cooking appliance.
Cooking and the first cooking appliance is evidence, Ipso Facto, of the first appliance salesman.
How was the first appliance paid for? Let's just say that the Prostitution profession has nothing to be ashamed of.
(May also be evidence of first use of the sales promotion, the "Layaway"...Badda Boom!)

KBIS Swag Update: Dacor Comes Through
Dacor's generosity to the press never fails to amaze. We just received Dacor's "Outdoor Grill Fork and Barbecue Tool Set" model DE075, a $48 value. The 6-piece kit is made of 430 stainless steel and comes in a lovely aluminum security case. It could only be improved with the addition of a wrist locking security handcuff. Though 1/2 the value of Electrolux's $100 Bose buds, the Dacor gift is more useful, a better gift from an appliance company, and Dacor gets points for not using hired thugs in their booth.
Gift photo 1 Gift photo 2
See April's "Quickee KBIS Review" for full Swag report and Electrolux Thug report
With receipt of the Dacor gift, the ApplianceAdvisor.com is officially in the bag.

Miele to Launch Revolutionary Sales and Distribution Program Throughout Canada EXCLUSIVE AND CONFIRMED
Effective July 2, all Miele consumer orders in Canada will be placed at brick and mortar dealer locations, face to face with a salesperson who together will enter the order using an online, password protected website (https://www.mieledealernet.com). All delivery, installation and service issues will be managed by Miele directly. Miele has signed agreements with national installation, delivery and transport companies. Except for the display units, the dealer will never touch the product.
We have also been tipped that dealer display units will be leased at $1/year to the dealer. The entire program promises to cut costs throughout the system and improve service levels, though the $1 display lease, if true is a huge expense. Dealers are said to love the program in theory but not without concern that the change sets them up to be removed polyp-like (not puppy-like) in the future from the sales stream. Miele first employed the system successfully in Australia, but our tipster indicates that there is no plan to roll out the program in the US.....though why not? Could 2-step distribution work with this type of system if their value add is that of a 5% Sales Rep?

Reuters Reports that Sears, Lowes, and HHGregg in Class Action Lawsuit.....Again
A federal lawsuit seeking class action status alleges that the above retailers sold and then installed dryers using dryer vent duct not approved by the manufacturer, namely flexible metal foil or plastic dryer hose instead of the approved rigid ducting. Flexible hose hooks lint, which as any 28 year old bachelor can tell you reproduces wildly and uncontrollably in dark warm environments such as under the couch or in ducts. It then become block-ed by the children, grandchildren and great-grand children of that first hooked lint. An argument ensues, (which is just like lint), it gets heated, there's a fire which tragically wipes out several generations of duct lint only a few brief seconds before burning down the entire house.

MAY DISTRIBUTOR UPDATES

4) NXR chooses Signature Marketing to distribute in Delaware, lower New York State, New Jersey, Maryland, Michigan, Pennsylvania, Ohio, Indiana, Illinois, Wisconsin, Minnesota, Iowa, Kentucky, North Carolina, South Carolina and Virginia

3) Schaedel Expanding Viking Business North
Carl Schaedel informed its dealers May 19th that it has reached agreement in principal with Delia Associates for the acquisition of Delia's Viking business in New York State. (As far as we know Delia would still have Zephyr and Sirius, though Zephyr's M.O. has been to follow Viking like a puppy. Why is Delia selling a chunk of both its bread AND its butter? Was the decision made under duress or as part of a well considered strategy? We have a call into Delia, and hope to have an answer shortly.
CORRECTION May 22: On Feb 15, 2008, Zephyr appointed Schaedel for New York State and Delia for New England, so Zephyr-wise:
-Viking is following Zephyr..........puppy-like
-Zephyr is distributed by (5) distributors which do not distribute Viking

2) ALMO and Samsung and Climatic
Samsung will now be available to independent dealers having reached agreement with ALMO and Climatic to go through 2-step distribution. Until now, Samsung was only available through national chains. Climatic will cover: AL, AK, FL, SC, GA, LA and MS. ALMO will cover the rest of the country.

ALMO and FCI
ALMO will no longer distribute Italian brand FCI (aka Fulgor....not to be mistaken with Spanish brand Fagor)

ALMO and Capital
.....and there is rumor that ALMOs Capital Equipment territory is changing....i.e. Florida.

ALMO and ASKO
In preparation for Sub-Zero's launch of its own dishwasher line, ASKO is migrating away from its Sub-Zero distribution dependency. ASKO is pulling out of Westye East and shifting to ALMO Distribution. The territory includes New York City, Long Island and New Jersey.

Viking Class Action Updates
See April

KitchenAid Goes to 403 Stainless Steel?
A Consumer Sent us a copy of an email they received from KitchenAid Customer Service:
"Thank you for contacting KitchenAid with your new product shopping questions! We appreciate your interest in our home appliances.
At this time, KitchenAid is in process of changing the grade of stainless steel being used on our appliances. Unfortunately, this is a running change with the model numbers and therefore, we will not know when the change takes place.
We were or are using the 304 grade stainless and plan to change the line to 403 grade. The two grades of stainless however, are designed to match as closely as possible. Also, the lighting in the room and surrounding cabinetry can affect the color and appearance of any color of appliance. The appliances may look completely different in your kitchen under different lighting."

A major running change without noting the change in the model? That sounds weird. Anyone hear anything about this?

GE Continued
May 28: Reuters: GE names LG, Haier, Mabe, Electrolux, Arcelik of Turkey (which is larger than you think), as potential suitors.
May 23: Indian conglomerate Videocon confirms that it has been invited to make a bid for GE. Videocon recently completed its acquisition of Daewoo and has formed deep strategic ties with Electrolux in India
May 22: Immelt comments that sale or spinoff should be completed by Q1 2009.
May 16: Analysis: Appliance Park (AP) is a place lost to time, shuffled to the back of the GE bus. The ugly step-child. Poorly lit, and never updated. Carpet worn or rippled by ancient roof leaks and never repaired. Stained cinderblock walls, ancient furniture and fixtures. One could say it reminds one of a Soviet hospital, but I have been to a Soviet hospital and AP is not nearly so cheerful.
AP is a depressing work environment successful in only one measure: making one feel sad for those who spend their careers so disrespected by their employer.
What if the new investor actually invested in AP? How much value could be unlocked?
     -If the far flung departments of AP were consolidated into a convenient vertical rather than time sucking horizontal building structure
     -If the time sucked away commuting to meetings all over the bloody place was instead productive time.
     -If the employees were shown the respect associated with a clean, modern and well lit work environment.
     -if the isolation of life at AP were replaced with a tighter, more interactive office layout, it would unlock the creativity and innovation of random interactions; the unplanned hallway conversations between unrelated appliance professionals.
What if the new owners saw the rejuvenating possibilities of a new facility and a new beginning in the mold of Chrysler's Auburn Hills HQ? We can only hope.
May 16: Analysis: Is the purchase of GE life and death for Mabe. No. Is this the deal that they must win? Maybe not "must", but they should make every attempt to make it happen. Mabe manufactures a huge chunk of products branded as GE or sold by GE and branded as Kenmore. Is that at risk in a sale? Even if the new owner will own 49% of Mabe? Yes and Yes. Mabe has the most to lose and the most to gain of the suitors so far mentioned. If it makes financial sense for GE to buy Mabe product in Mexico and resell it throughout the US just imagine Mabe's margins if they can remove the middleman......even in the "just better than coal" cooking categories.
May 16: NEW: GE Confirms that it is planning to spin off or sell division
May 15: Reader Suggestion: LG was always the end game at GE, always the suitor that was going to get into GE's panties. What should have been a civilized exchange of cash and equity has now become a free for all, which suggests that LG could not or would not meet GE's price.

Earth Shattering Paradigm Shift: UPDATE
Don't tell us that this is not Earth shattering, that this is not a Paradigm shift.
The GE decision to sell is a game changer and fits the bill for our promise in February and March of this year.

That said.......it is NOT the Paradigm Shift we've been waiting to tell you about. GE set the bar mighty high for any change in the industry which can be termed a "paradigm shift". So high in fact, we wonder if our little scoop might not measure up.
We would like to believe, though we have no reason to, that GE's Immelt jumped the gun for fear our scoop was his scoop.

ALERT: GE APPLIANCE DIVISION UP FOR AUCTION: May 14, 2008
It has been reported that GE will put the GE Appliance business up for bid.
The Wall Street Journal says: "With appliance sales getting hit by the slowing U.S. economy and the housing bust, jettisoning the business could help GE reach its long-term goal of boosting profits by at least 10% annually."
Business Week: Goodbye to GE Appliances

Why Now?
GE Appliance has always been the subject of possible spin off or sell off. (see ApplianceAdvisor Sept, 2005 "GE Appliance Business for Sale?")
GE has been hit by the recession of course reporting a 14% drop in builder sales where GE is huge, and a 5% drop in consumer sales.

What if it's not the recession, not the drop-off in sales, not the rise in oil prices, not the war in Iraq, not the coming election of anyone else. What if GE is actually paying attention to the US$ exchange rate? Take your time, roll it around in your head a bit.
WHAT DO YOU SAY? But why? The exchange rate has no meaning, except in the case..........except in the case....BUT IT CAN'T POSSIBLY BE TRUE ! IT CAN'T BE TRUE !
Yes naive, I fear t'is true, that GE, 2nd largest manufacturer of appliances in North America with a 27% market share is setting itself up for foreign takeover at a Euro/US$ exchange discount of 30% since 2005. The flag flying over GE Appliance will not be the Stars and Stripes, but instead could very well be the Iranian flag, or the red, white and blue banner of North Korea or Ethiopia, or the AK47 assault rifle be-decorated flag of Mozambique.
"Why at these prices it's almost an impulse buy!" The US$ discount more than counterbalancing a sales related loss in value.

"So Rod Roddy, tell us what our contestants will be bidding on in the Showcase Showdown?"
     -2nd largest white goods maker GE Appliances with 27% of the US market. (WSJ says 20%)
     -A 49% stake in the largest Mexican appliance maker, Mabe (which owns the largest Canadian maker and distributor CAMCO)
     -The Monogram brand of high-end and pro-style appliances....the jewel if you will
     -Diversified Refrigeration, maker of GE Monogram built-in refrigeration, which GE Appliance purchased January 2006
     -A national direct sales force. Pish Posh to 2-step distribution.
     -A purchasing department which is regarded as a profit center.
     -The entire major appliance distribution infrastructure of Home Depot. That's right! If you bought it at Home Depot, no matter the brand, it was stocked, loaded, tagged, and delivered to you by the fine folks at GE under contract to Home Depot.
But Wait, There's More............
     -The use of the GE "meatball" logo for enough time for you to settle in, feel at home.
     -Appliance Park in Louisville, KY. A collection of cavernous buildings visible from the moon and housing GE Appliance HQ, purchasing, sales, engineering, and the desiccated remains of a once mighty manufacturing juggernaut.

Who might be interested in GE Appliances?
The entire industry has been patiently waiting for South Korean giant LG to make an offer, and that seems about right to us. Could it be coincidental that LG and GE just signed a patent sharing pact in February?

Louisville Courier Journal Q1 Results April 11, 2008: GE's Louisville unit profit falls, broader drop sinks stocks
NOTE: This editor was once employed as an intern by GE's Gas Turbine Division of Schenectady, NY (zip code 12345).
There is no telling how much this close working relationship effected the tone and content of this story. "What have you done for the General today?"

UPDATE May 15: NY Times. "GE Looking to Sell Appliance Division"

Whirlpool All But Wipes Out MagicChef
Whirpool's new June 29 price sheet only lists (8) Magic Chef products, all 24" manual clean wall ovens.
9512WUV, 9512XUB, 9522XUB, 9112VUV, 9112WUV, 9112XUB, 9122VUV, 9122XUB
This is a Reader tip. Does anyone want to second this?
Brand may see light of day in future as big box house brand

UPDATE May 15: Reader Tip and Comments
"West coast rep rumor has it that Magic Chef will be Lowes-only soon"
"But the new price sheet does include more Estate Appliance SKU's! Oh Happy Day."
"Keep a Brand no one knows, Estate, and kill one that people have known for years."

End of World as You Know It
Goldman Sachs predicts $150 - $200 per barrel of oil next 12 - 24 months, which is $5 to $7 a gallon.
What do we recommend to manufacturers of all the inefficient and un-necessary product lines built to cater to builders and residents of soon to be obsolete and decaying luxo-boxes in the suburbs and the exurbs? Makers of wine, compact, undercounter, and outdoor refrigeration, massive stainless ranges, super fridges, 42 towel washers, drying centers?
The appliance industry stands on the precipice last occupied by the US automotive industry in 1973, builders of products which require a specific set of regulatory, cultural, demographic and energy circumstances which have reached their "sell by" date. One day, very soon, we may look at a 2007 48" double oven stainless steel range with sealed burners (arguably the very worst deal in the appliance industry) with the same quiet bemusement we now look at the 1973 Chevrolet Caprice Wagon, a car wider than the street on which it drove.
At $7 per gallon we can only begin to guess what the future holds, except this: the appliance industry as we see it each KBIS would no longer exist, replaced by a much smaller industry populated by those who stayed on their toes. And for those who could not duck and weave? Stock up on rice.

NY Times: Oil Price Rise Fails to Open Tap ( REPAIRED LINK )

Atlantic Monthly: The Next Slum

Fretting? Here's why you can smile: "....And Then.......Depression Set In": October 2007

Marvel Indiana Plant to Close. Nation's Alcoholics, Boozers and Bums Express Outrage at Loss by Moaning Incoherently and Wetting Themselves.
Maker of undercounter refrigerators and icemakers to consolidate operations with parent Northland's production in Michigan. 140 Marvel-ous jobs were lost, and one imagines that someone is trying to contact the absent 15% of the workforce who may not learn of the closing for several weeks.

Marvel's Saga of Information Ineptitude Continues:
       -AGA / Northland threaten to close the Marvel plant, the threat gets into the public domain.
       -Information about Marvel quality problems and high absenteeism gets into the public domain damaging the brand
       -The Northland plant is chucked under the bus and reported to also be expendable. This gets into the public domain.
       -After running state and local officials through a ringer putting together $millions in incentives to save the Richmond, IN plant, local officials are shocked to learn 2nd hand of the decision to close the plant. Officials were embarrassed and to cover their flank were only too happy to dish dirt on the record to the local newspaper the Palladium Item with:
               -"Here we are ready to put up $2.074 million and we can't even get a simple phone call back from them to tell us they are leaving."
               -"With the amount of work, time and effort that many people put in, it would have been nice to let us know"
               -"This was a first -- even Target let me know when they were leaving."
Are you people certifiably insane? Is this how you protect a brand you paid millions to acquire? Is it amateur night over there? Have you forgotten that it's a recession, and you don't make things people "need"? This is not rocket science.

This should have been a short story about a "lamentable factory closing", of "moral support for the workers, worker retraining and the officials and people of the community of Richmond", immediately flowing into "Marvel's choice to keep jobs in America", and then of "plant modernization and production efficiencies in Michigan", ending finally with "higher competitiveness and better products for the consumer". This could have been a feel good story. Instead you have made the not so obvious choice of turning it all into a bloody train wreck, and the blood is your own. I feel like I need a shower.
Stockholders should be asking questions.

Northland one must remember, is the refrigerator manufacturer which has yet to figure out how to meet DOE energy requirements if not for a seemingly tailor-made loophole, (since fridge box and refrigeration mechanism ship in two boxes DOE regs don't apply, we sh** you not...See Dull Edge of Cold April 2004)

Read the Paladium Item Story (story moved to Paladium archives July 14)

See April 2008 "Big, BIG Problems Reported at AGA / Marvel / Northland" below for first story.

Reader Comment May 2:
AGA paid 21 million for Marvel. Hired Gordon Stauffer as President (he was already Northland's President) who ran the company along with AGA for three years. Marvel declined from a very profitable company producing high quality products to one which is losing money and producing lower quality products. After a series of bad management decisions and a steady turnover of middle management employees, top management proclaimed the financial loses and poor quality are due to the lack of efforts by the rank and file factory workers and their local union. As you know, Northland is the company that produces the NKA brand of larger built in refrigerators that cannot meet the energy standards-now or ever.

Marvel Dealer Letter May 5: Click Here

Whirlpool Yanks Your Hose II
Rumor has it that Whirlpool is once again making a run at eliminating the connection hoses included with their washers. The rumor suggests that the change effects Whirlpool's new top loading washer going into production in August.
Whirlpool's Yanks Your Hose I (October 2006)
Whirlpool's Yanks Your Broiler Pan (January 2007)

Have they no shame! Will they take our lint collectors next?
Dear Whirlpool, take what you will..........but leave us our dignity.
Dear Reader, if we are reporting "rumors"....never mind fact......on washer hoses and broiler pans.......it is obviously already too late for us. Save yourselves.

Reader Comment May 12: