Whirlpool on Wall Street

If one were to look around, one might revel at the active and ever-changing events emblazoned in our world. Crisis and calamities stun us, while occasional good fortune favors us.

Nothing sits still, and stock is no exception.

The Whirlpool Corporation has experienced these repercussions and looks for what might strike next. As of now, they could have their focus on a housing boom and changing EPA regulations. These could have a major impact on the company's stock as well as help or hurt the profitability.

The Whirlpool Corporation not only owns a greatly recognized name, but also a dynamic history.

Founded in 1911, Louis Upton, Emory Upton, and Lowell Bassford started the business in the growing industry of household appliances. They began their work in Benton Harbor, Mich., when they partnered together to create electric motor-driven wringer washers. The idea became very popular and after several partnerships, the company was in full swing.

Today Whirlpool owns eight different brand names including Maytag, KitchenAid, Jenn-Air, Bauknect, Brastemp, Consul, and Amana. It proudly owns sixty-six manufacturing and technology centers around the world that produce fabric care products, refrigeration, dishwashers, cooking goods, counter-top appliances, garage organization products, and water filtration supplies.

Currently headquartered in Benton Harbor, Michigan, it is headed by the CEO and chairman, Jeff M. Fettig. This company is noted for its success with 68,000 employees and $19 billion in annual sales. It is the number one global appliance brand and is marketed in nearly every country worldwide.

Occasionally major events occur that cause Whirlpool’s stock price to sky-rocket and change the course of the stock. Such an event that could spike its stock prices is a housing boom, for Whirlpool’s sales are tied directly to the housing market.

For example, in 2008 a drop in the house construction and sales depressed Whirlpool sales by fifteen percent through the channel to new housing installers. Therefore an increase in houses built would result in a greater demand for new appliances. This in turn would increase the price of the stock as people are willing to pay more money for the product and increase profitability. This event would benefit not only the company but the stock-holder too.

Like most companies, Whirlpool is subjected to rules and regulations about what materials may or may not be used in production. These regulations are created by the Environmental Protection Agency (EPA), a government-based organization. Their purpose is designed to protect human health and the environment, but their decorum can have an effect on product assembly in the sense of what materials may or may not be used.

For Whirlpool, it touches the spectrum of usable chemicals in their products. An event that would strike the price of Whirlpool stock and cause it to plummet is an EPA ban on hydrochlorofluorocarbon refrigerants. Hydrochlorofluorocarbons are a range of chemicals made of hydrogen, chlorine, fluorine, and carbon with the common name of HCFCs. This category of chemicals is much less harmful than the chlorofluorocarbon refrigerants (CFCs) that were banned in 1987 for environmental harm, but are still suspected of depleting the ozone layer. They are commonly used in Whirlpool’s refrigerators and are vital for construction.

The forbiddance of HCFCs would force Whirlpool to invest in research and development of a new, safe cooling agent. The quest for a new component would charge quite a large tariff and decrease the total profitability of the company. The price of the stock would decrease in response to this expenditure. This could possibly cause problems for Whirlpool until a new safe substitute is found.

Although Whirlpool has been rising up from the ashes with its new innovations, purchases of this stock should be put on hold and reconsidered, for a developing case in Fort Smith, Arkansas, is causing some officials and stock holders to rethink their loyalty to the corporation.

Sometime between the late 1960s and the early 1980s, a trichloroethylene (TCE) leak occurred at the Fort Smith plant that contaminated the ground water and the soil. TCE is a degreaser used in the construction of refrigerators that readily evaporates and is easy to accidentally inhale. Over the years the begrimed water has spread and now affects several adjacent neighborhoods.

There have not been any health cases reported, but the degreasing chemical is quite toxic. Enraged that action was not taken earlier, homeowners in the contaminated areas are demanding action. If a lawsuit is filed and won in favor of the residents in the affected areas, then Whirlpool could lose a large sum of money. There is too much controversy and risk to buy this stock with such a large settlement hanging in the balance.

Spontaneous events occur sooner than we know and influence a plethora of aspects embedded in everyday life. From a housing boom to an EPA ban, Whirlpool stock can ebb and flow with current events. Would you be willing to swim the tide on the Whirlpool ride?