Frigidaire Home Products
Frigidaire Home Products
Wholly Owned Subsidiary of Aktiebolaget Electrolux
Incorporated: 1916 as Guardian Refrigerator Company
Sales: $3.5 billion (1996 est.)
SICs: 3630 Household Appliances; 3524 Lawn & Garden Equipment
Celebrating its 80th anniversary in 1996, Frigidaire Home Products ranks third among America’s manufacturers of “white goods” or major household appliances. In the 1990s, the company offered a complete line of branded appliances, including refrigerators, freezers, washers, dryers, microwaves, air conditioners, gas and electric stoves, and dishwashers. For many decades, Frigidaire was owned and operated as a division of automobile giant General Motors Corporation. Throughout its first half-century in business, Frigidaire earned renown as one of the appliance industry’s most innovative companies. But by the late 1970s, cutthroat pricing had pushed the GM division into the red. Acquired by White Consolidated Industries (WCI) in 1979, Frigidaire was subsumed under the WCI Major Appliances Group and existed primarily as a brand in the parent’s diverse lineup.
The Frigidaire corporate entity was revived after 1986, when WCI became a subsidiary of Sweden’s AB Electrolux. A 1991 reorganization brought all of the brands in WCI’s Major Appliance Group under the aegis of Frigidaire Co. Brands offered by the reborn subsidiary included White-Westinghouse, Kelvinator, and Gibson. Under Electrolux, Frigidaire was repositioned as an upscale brand. Its Gallery and Gallery Professional lines featured European styling and high-performance features.
Origins in the Early 20th Century
Frigidaire’s history reaches back to the earliest days of the household refrigerator. The company was founded in 1916, when engineer Alfred Mellowes and a group of investors formed the Guardian Refrigerator Company in Fort Wayne, Indiana. Just a year earlier, Mellowes had constructed the first true refrigerator, as opposed to an ice box with a refrigeration unit, by attaching an electric refrigeration system to a wooden cabinet. Mellowes set up a small factory and started hand-assembling the appliances, but it was very slow going with workers taking over a week to make each refrigerator. Within less than two years, the company had lost over $30,000 and was headed for bankruptcy.
Recognizing the efficacy of Mellowes’ concept, General Motors Corp. president, William C. Durant, personally acquired Guardian and renamed the company and its products “Frigidaire.” In 1919 Durant sold the business to General Motors, moved the operation to Detroit and converted its manufacturing process to mass production. Though productivity increased dramatically, the $775, nine-cubic-foot refrigerators were still priced out of the reach of most consumers.
Frigidaire came into its own after 1921, when General Motors transferred the division to its Delco Light subsidiary in Dayton, Ohio. With guidance from electrical engineer and Delco president Charles F. Kettering, Frigidaire made rapid progress. Incremental innovations over the first half of the decade transformed the wooden food cabinet into a porcelain-coated, insulated, steel “fridge” with temperature controls. Frigidaire also diversified its product line with a number of cooling appliances, especially in the commercial arena. Over the course of the decade the company introduced ice-cream cabinets, refrigerated soda fountains, milk coolers, drinking fountains, room air conditioners, and display freezers for groceries.
The implementation of efficient manufacturing processes brought the price of a Frigidaire refrigerator down to $468 per unit by 1926. Having surpassed the sales revenues of Delco Light, the refrigerator division was made a subsidiary in its own right in 1926, with Elmer G. Biechler at the helm as general manager. Technological innovations and production efficienties allowed Frigidaire to sell more than one million refrigerators from 1919 to 1929.
Frigidaire’s growth continued to accelerate in the 1930s in spite of the Great Depression. Total refrigerator production topped two and a half million by 1932 and climbed to over six million by 1941. Frigidaire also made its first diversifications outside of its core refrigeration niche during the late 1930s, introducing a range, oven, water heater, clothes washer, and clothes dryer before the decade was out. On the eve of World War II, Frigidaire boasted the world’s largest refrigerator plant and over 20,000 employees in the United States and abroad.
Frigidaire Goes to War: The 1940s
Like so many other “nonessential” industries, appliance makers were drafted into military production during World War II. Though Frigidaire continued to produce refrigerators until April 1942, the company won its first military contract in September 1940, even before the United States was officially involved in the war. Frigidaire made a wide variety of aircraft parts and assemblies, including propellers, gas tanks, artillery, and bomb hangars. Over the course of the global conflict, the company produced more than 200,000 Browning Machine Guns. The company also put out tank assemblies and automotive engine parts.
Along with nine of its competitors, Frigidaire got a headstart on the postwar market in 1943, when it was granted permission to recommence refrigerator production. The company completed its first household refrigerator in July 1945, and by June 1949 had returned production to one million units per year.
Frigidaire continued to set the pace for appliance industry innovation in the 1950s, introducing automatic ice-makers and auto-defrost refrigerators in 1952 and a frost-free model in 1958. The company also helped make appliance design an important factor in the industry, launching color-matched groupings of appliances in 1954 and the “Sheer Look,” a streamlined design, in 1956.
Acquisition by WCI in 1979
All segments of the appliance industry came under assault from increasing imports in the decades following World War II, engendering heavy price cutting among domestic manufacturers. Led by Edward Reddig, White Consolidated Industries was forged in this competitive atmosphere, expanding from a tiny sewing machine manufacturer into one of America’s leading appliance manufacturers. In 1960, Reddig began amassing a coterie of big name appliance manufacturers that had fallen on hard times, including Kelvinator, Westinghouse, and Philco. WCI targeted Frigidaire in the late 1970s. Having lost an estimated $40 million on sales of $450 million in 1978, GM sold Frigidaire to WCI for about $120 million in 1979.
Under its new owners, Frigidaire shifted from an emphasis on industry-leading innovation to the pursuit of manufacturing efficiency. WCI transformed its losing acquisitions into moneymakers by slashing both administrative and production ranks, trimming product lines to the biggest sellers, and implementing what Business Week called “Scrooge-like” cost controls. Perhaps most damaging to the long-term performance of Frigidaire and the other brands in WCI’s stable was the eradication of research and development, a function that had fueled the company’s many industry “firsts.” Furthermore, instead of emphasizing cutting-edge design, Frigidaire was promoted as a reliable brand with the slogan “Here today, here tomorrow.”
WCI was itself acquired by Sweden’s AB Electrolux in 1986 as part of a two decade, round-the-world acquisition spree that added more than 300 companies to the Electrolux family and made it one of the world’s largest appliance manufacturers.
Upscale Positioning in the 1990s
After more than a decade in the shadow of WCI, Frigidaire regained the spotlight in 1991, when parent Electrolux supplanted the unimaginative WCI identity with Frigidaire, making the Ohio-based company the leader of a family of brands that included Tappan, Gibson, Kelvinator, White-Westinghouse, and Euroflair. Under the direction of longtime Electrolux executive Hans G. Backman Frigidaire got a brand makeover as well, including a new logo (a stylized crown with five peaks for the five lead brands), a new slogan (“Frigidaire Company .. . creating a better tomorrow!”), and an upscale positioning for the Frigidaire brand. Instead of competing with lowest-common-denominator imports on price, the new parent hoped to differentiate Frigidaire as a highly desirable brand.
With a target of doubling its U.S. market share by the turn of the 20th century, Frigidaire teamed with another Electrolux subsidiary, Italy’s Zanussi, to adapt European design and performance features to its high-end offerings for the U.S. market. The 1993 launch of the UltraStyle line, featuring over 100 coordinated, energy-efficient appliances, was the culmination of a five-year, $.5 billion redesign effort. Just two years later, Frigidaire boosted its advertising budget to record levels to support the introduction of its Gallery and Gallery Professional lines of commercial-style appliances. Noise and CFC reduction were also important concerns. Electrolux didn’t neglect operations, either, plowing over $650 million into manufacturing improvements from 1986 to 1996. The company also consolidated its office structure at Dublin, Ohio and laid off hundreds of workers in 1993.
At Frigidaire, we believe appliance design isn’t just about the product; it’s about you, the consumer. It’s about solving your time and space problems. Helping you achieve the look you want. And eliminating some of the inconveniences you deal with on a daily basis.
The result is a family of appliances engineered to meet and exceed your expectations. Beautiful sculpted lines. Affordable stainless steel. Features so intuitive they’ll surprise you.
Frigidaire’s new designs won a number of awards in the mid-1990s. Its front-load Tumble Action Washer, which used 40 percent less water than conventional American top-load models, earned honors from Home Magazine and Today’s Homeowner. The latter magazine also named Frigidaire’s Gallery Precision Wash Dishwasher one of the Best New Products of 1997. This quiet new model used less water and detergent than its predecessors.
Electrolux merged Frigidaire with its two outdoor appliance businesses—Poulan/Weed Eater and American Yard Products—to form Frigidaire Home Products in 1997. This consolidation was seen as a way of increasing distribution efficiencies since all three businesses had retail outlets in common. Electrolux also hoped that it would be able to consolidate similar manufacturing functions among the company’s subsidiaries.
Though some observers felt that there was a danger of cannibalization among the company’s WCI-created family of brands, Frigidaire appeared to be devoted to its multi-brand strategy. Tappan, which became a part of the Frigidaire group after the Electrolux acquisition, was strong in cooking appliances, White-Westinghouse was positioned as a value line, Gibson was sold to independent retailers through distributors, and Kelvinator was targeted at first-time appliance buyers. All the brands were considered “step-up” models leading eventually to the flagship Frigidaire and its upscale lines. Frigidaire was the only brand to merit consumer advertising.
In spite of its efforts at repositioning the brand, Frigidaire remained something of a disappointment to Electrolux through the early 1990s. Even after several major reorganizations, the U.S. appliance-maker continued to exert a negative influence on the parent company’s bottom line. Though it ranked third in its home market, Frigidaire was a distant competitor to industry leaders General Electric Co.’s Appliances division and Whirlpool Corp., each of which boasted double the volume of their Ohio-based rival. At the same time, fourth-ranking Maytag was gunning for Frigidaire’s market share. The parent company continued to express confidence in Frigidaire’s ability to effect a turnaround, but noted that the U.S. subsidiary’s early 1990s performance was “weak.”
“All Systems Go,” Appliance Manufacturer, October 1991, pp. 6F-8F.
Beaty, Gerry, “Frigidaire Gets Praise from Parent,” HFN The Weekly Newspaper for the Home Furnishing Network, November 7, 1994, p. 62.
_____, “Frigidaire’s System Makes Its Brands Work Together,” HFN The Weekly Newspaper for the Home Furnishing Network, January 22, 1996, pp. 88-89.
_____’Major Move: Frigidaire Firms Up Programs to Challenge for Market Leadership,” HFN The Weekly Newspaper for the Home Furnishing Network, February 15, 1993, pp. 82-84.
_____, “Stretching a Name; Electrolux Dubs Home Unit ’Frigidaire,”HFN The Weekly Newspaper for the Home Furnishing Network, February 3, 1997, pp. 67-68.
Cayer, Shirley, “White Goods’ Wars—Continued,” Purchasing, May 7, 1992, pp. 69-72.
Fallon, James, “AB Electrolux: Frigidaire Still Lags,” HFN The Weekly Newspaper for the Home Furnishing Network, November 11, 1996, p. 84.
_____, “Electrolux: Merger Is a First Step,” HFN The Weekly Newspaper for the Home Furnishing Network, December 30, 1996, p. 73.
“Frigidaire’s Massive Gallery Ad Campaign,” HFN The Weekly Newspaper for the Home Furnishing Network, February 6, 1995, pp. 66-67.
“Frigidaire Realignment a Wrap,” HFN The Weekly Newspaper for the Home Furnishing Network, August 9, 1993, p. 80.
GM Frigidaire at War, Dayton, Ohio: Frigidaire Division, General Motors Corp., ca. 1944.
“Manufacturing Strategy Solidified,” Appliance Manufacturer, October 1991, pp. 28F-33F.
“Now: Market Driven,” Appliance Manufacturer, October 1991, pp. 14F-15F.
Remich, Norman C., Jr., “Flair for Frigidaire,” Appliance Manufacturer, August 1997, p. 94.
“Striving for Service Superiority,” Appliance Manufacturer, October 1991, p. 18F.
“White Consolidated’s New Appliance Punch,” Business Week, May 7, 1979, pp. 94-98.
—April Dougal Gasbarre