Maytag, the third-largest appliance-maker in the United States, has withdrawn from a joint venture with one of China's leading manufacturers, Rongshida. It took a loss of US$42.3 million in ending the brief reign of the first Western chief executive of a Chinese appliance firm. Xing Shumin, a spokeswoman for Rongshida, based in Hefei, capital of Anhui province, said all US employees of the venture, including chief executive Vic Lawrence, had returned to the US and Maytag had withdrawn from the venture. The venture was set up in 1996 by Rongshida, which then controlled half the domestic market for washing machines and wanted to move into refrigerators but lacked capital or technology for such an expansion. It sought out Maytag, which had global sales last year of US$4.3 billion, as one of the world's top producers of refrigerators. The US firm invested US$70 million in the venture, of which it and Rongshida each held 49.5 per cent, with the remainder by the Hong Kong Ai Yue Group. Maytag was looking for a profit in three to five years. Business went well until the first refrigerator came off the production line in October 1998. Competition in the market had intensified, especially from market leaders Haier and Rongsheng. Rongshida also could not manage the world-class technology and equipment Maytag provided. A production line with an annual capacity of 1.2 million units turned out only 100,000 units. Initially, the US firm provided only technical support and a financial supervisor and did not take active part in management. However, after losses began in 1999, pressure mounted on Rongshida, which hired people with multinational experience the following year to try, without success, to turn the venture around. Maytag last year sent Mr Lawrence, a senior manager from its Asia-Pacific operations, to take over as Rongshida's chief executive, making him the first foreigner to head a big Chinese appliance firm. However, Maytag has now decided to cut its losses and withdraw from the venture, taking a non-cash loss of US$42.3 million from its investment. This was one reason why the firm posted a loss of US$20.7 million in the fourth quarter. Ms Xing said the pull-out had been decided for the better development of the company. 'The transition was completed two weeks ago and things are going normally. The board will decide how to deal with the shareholding. 'Maytag will either dispose of its entire share or retain a part and Rongshida will give the US firm the preferential right to buy shares. '[Mr] Lawrence's departure is not what he or Rongshida wanted, but it was decided by the requirements of capital.' Officials of Maytag at its corporate headquarters in Iowa declined to comment.