Whirlpool files trade complaint on Korean manufacturers' pricing

A trade complaint filed by Whirlpool Corp. on Wednesday, March 30, claims that unfair refrigerator pricing by Korean manufacturers has harmed sales of refrigerators it makes in Middle Amana.

Whirlpool filed antidumping and countervailing duty petitions with the United States Department of Commerce and International Trade Commission naming Samsung Electronics and LG Electronics. The complaint focuses on the Korean companies' pricing of bottom-mount models that compete against the refrigerators Whirlpool manufactures in Middle Amana.

Bottom-mount refrigerators have pull-out freezer compartments on the bottom. They make it easier to view and reach contents of the refrigerator compatrment, which is used more fequently. Whirlpool has been an innovator in the category, which includes some of its highest priced refrigerator models.

One of the 138-page petitions concludes that “there is compelling evidence that the 2008-2010 rise in imports of bottom mount refrigerators from South Korea and Mexico has been driven by a combination of dumping and government subsidies, and the effect of the unfairly traded imports has been to “materially injure” the U.S. industry that produces “like product.”

The price of similar models sold by Samsung and LG in  Korea is significantly higher than their prices in the United States, the petition says, offering the example of one model selling in Korea 23 percent above United States prices.

Whirlpool asks the commerce department and the trade commission to initiate an antidumping investigation and if warranted, impose duties on the imported refrigerators to correct the imbalance in pricing.

The petition indicates LG has cut prices much more aggressively than Samsung. A chart illustrating the pricing in the petition indicates LG slashed prices 60.2 percent from April 2008 to October 2010 on its three-door bottom-mount 25-foot cubic-foot stainless steel refrigerator, from $2,331 to $928. The prices on two four-door LG bottom-mount models were reduced by 55.5 percent and 41.6 percent.

Whirlpool estimates that the volume of bottom-mount refrigerator imports from South Korea and Mexico has increased from 886,978 in 2008 to 1,552,497 in 2010. The petition cites articles in trade journals and other evidence to support Whirlpool's claims that Samsung and LG have stated plans to dsiplace Whirlpool as the largest seller of appliances in the United States.

Responding to the petition, Samsung said  it “respects the trade rules in the U.S. market, and is confident that the Department of Commerce will confirm that there has been no dumping or subsidization and that the ITC will find that there has been no material enjury caused to U.S. producers.”

LG officials were not immediately available for comment.

Whirlpool employs about 2,000 in the Middle Amana plant, the company said. Its products include the popular French Door bottom-mount refrigerator, which has two equal-sized doors to the refrigerator compartment.

The petition says the average retail price of Whirlpool's 25-cubic-foot French Door fell from $1.947 in the first quarter of 2008 to $1,226 in the fourth quarter of 2010, as LG and Samsung undercut Whirlpool's price with the introduction of models that are similar except such additional features as dual evaporators.

The petition claims unfair subsidies by the Korean government have enabled Samsung and LG to undercut Whirlpool's prices.

Dumping is a trade term to describe the practice of selling products below cost. Companies sometimes dump products in order to get rid of surplus inventory that has been accumulating, or to gain a competitive advantage in a new market.

Goss, the printing press manufacturer that formerly operated a Cedar Rapids plant,  launched an antidumping complaint against overseas competitors regarding their pricing of offset presses. The company won a favorable decision, but had already closed its Cedar Rapids plant and moved production overseas.