Originally created 04/25/06

Strike is factor in drop in profit



STOCKHOLM, Sweden - Electrolux AB, the world's biggest maker of household appliances, on Monday said earnings dropped 5.5 percent in the first quarter, partly because of a 6-week strike by workers at a plant in Germany.

Stockholm-based Electrolux, whose North American operations are managed from Augusta, also said it was closing another plant in Sweden as it continues to move production to low-cost countries.

Net profit in the first three months of the year was 807 million kronor ($106.9 million), down from 854 million kronor in the same period in 2005.

Sales grew 14 percent to 33.9 billion kronor ($4.49 billion) from 29.7 billion kronor in the first quarter last year.

Workers at the washing machine and dishwasher plant in Nuremberg, Germany, went on strike in January.

Their action came a month after Electrolux announced it would shut down the factory, cut 1,750 jobs there and move production to Poland and Italy.

The strike ended March 7 after workers accepted a deal under which Electrolux offered a payoff of 1.8 months' salary for every year of employment and help to find new jobs.

Electrolux said it took a restructuring charge of 145 million kronor ($19.2 million) related to the closure in the first quarter.

The company also closed a refrigerator plant in Greenville, Mich., and moved most of the work to a new factory in Juarez, Mexico, during the quarter.

The company has been undergoing a continuous reorganization that includes shifting production to low-cost countries in Eastern Europe, Mexico and Thailand from western Europe and North America.