Power tool maker Techtronic Industries expects to return its recently acquired floor-care unit, Hoover, to profit in 2009 by relocating its production facilities to lower-cost Shenzhen from Ohio, a senior official says.
Joseph Galli, chief executive of the group's floor-care division, said yesterday Hoover incurred 'a staggering loss' last year due to 'unbelievably high production costs, poor marketing and high managerial overheads'.
The revelation came after the group announced a 5.19 per cent rise in its attributable profit to HK$1.07 billion for last year from HK$1.01 billion, even though turnover fell 2.39 per cent to HK$21.82 billion on weaker consumer demand in the United States.
Hoover, which Techtronic bought from Whirlpool Corp for US$107 million in December, would axe more than 80 per cent of its 900-strong workforce at the manufacturing base in Ohio, Mr Galli said.
Most of Hoover's manufacturing activities would be moved to Techtronic's production base in Shenzhen and the rest to Mexico, he said.
'This year is about restructuring Hoover,' he said.
