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Spain-Based Fagor, Europe's Fifth Largest Appliance Maker, On Verge Of Bankruptcy
There has been much media insinuation in recent months that just because Spain's economy has virtually shuttered, and imports have slid to unprecedented low levels in the process pushing the (adjusted) GDP beancount positive for the first time in 3 years, that things are somehow getting better. What the media has roundly ignored is that as a result of the collapse in consumption and end demand, courtesy of an unemployment rate that at least according to Eurostat just rose to a new record high, the companies that actually operate in Spain and form the basis for any real economic growth, are shuttering at an unprecedented pace. Of note: Spanish electrical appliance maker Fagor, which employs 5,700 people worldwide, or in a few shorts months, employed, is one step closer to bankruptcy after its Polish subsidiary filed for protection from its creditors. The company, which claims to be the fifth-biggest electrical appliance company in Europe, had trading of its debt suspended after its mother firm - private Spanish conglomerate Mondragon - refused to pour in money to rescue the company.
Fagor makes washing machines, refrigerators and other appliances at 13 factories in five countries. Or, in a few shorts months, made.
Spain's financial market regulator said Fagor Electrodomesticos's debt was suspended from the fixed-interest market on Thursday morning as a precaution "owing to circumstances which could disturb normal trade" in its securities. Shortly afterwards, the regulator said Fagor's Polish subsidiary, Fagor Mastercook, had voluntarily filed for bankruptcy protection. It employs 1,400 people at its factory in Wroclaw, southwestern Poland. The Polish offshoot's filing at a court in the northern Spanish city of San Sebastian did not affect the status of the parent Fagor Electromesticos, which is part of the sprawling Basque cooperative Mondragon.
But it raised fears among Fagor workers in the Basque country, where the company says it employs 2,000 people directly and supports the same number of jobs indirectly.
Workers planned a demonstration on Thursday evening in San Andres, the remote Basque town where the company is based.
Fagor announced on October 16 that it had launched initial proceedings towards bankruptcy protection while it tried to refinance its debt, which a source within the company said was 800 million euros ($1.1 billion).
Under Spanish bankruptcy rules, Fagor has four months from that date to try to raise funds, but the source told AFP its fate could be determined much sooner in the absence of financing from Mondragon.
"If there is no change in the corporation's decision, the company will have to enter bankruptcy proceedings. I don't know if that will be within one week or two, but it will be in the short term."
But while defaults are normal things, at least in the Old Normal economy, when failure was allowed, what is troubling is that Fagor's parent company refused to preserve the firm's viability in exchange for a tiny liquidity injection of just €170 million.
Fagor has said 170 million euros would be enough to save it and warned that a lack of financing would push it to an "imminent bankruptcy request". But Mondragon said in a statement late on Wednesday that it felt Fagor, which has suffered a prolonged period of falling sales, "the company no longer responds to market needs, and the financial resources it requests would not ensure its business future".
Fagor posted sales of 1.17 billion euros in 2012, a drop of over one-third since 2007, a year before Spain's sharp economic downturn began with the collapse of a decade-long property bubble.
The company operates with 10 brands in 130 countries worldwide, and has 13 factories in Spain, France, Poland, Morocco and China. It has a market share of 16.3 percent in Spain and of 14.2 percent in France.
The Mondragon group was founded in the 1950s by a local priest, Jose Maria Arizmendiarrieta, as a small workers' cooperative and is now an international conglomerate with a mission of maintaining jobs. Its various branches, present in 20 countries, include industry, distribution and finance.
Despite its international presence, Mondragon's cooperative structure has kept most of its jobs and production at home, with 35,000 employees in the Spanish Basque Country, 35,000 elsewhere in Spain and about 13,500 abroad.
And since bankruptcy now appears inevitable, that is up to 5700 former Spanish jobs that will very soon be on the streets, protesting and enjoying the Spanish "recovery."
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Anyone got a fork to stick into it?!
Hey... It's a Fagor
You don't stick forks into Fagors...
Man, who needs to cook in Spain anyway? Their tapas joints are fantastic.
That cooking utensil looks suspiciously like a pressure cooker.
Does Europe really need a 5th largest appliance maker?
The brand, Fagor, was the kind used by the Brothers Tsarnaev in Boston
http://www.businessweek.com/news/2013-04-21/boston-bombing-hinders-spani...
Man if you named a company Fagor in the U.S. you'd get sued up the ass.
I guess durability wasn't an issue in their choice as they were planning on a one time use.
Is that an electric pressure cooker, designed to run on green energy?
Wonder how that thing would blow.....
Spanish-based FAGor and MonDRAGon? This is either waisist, fomohobic, anti-treehugging hate-speechlessly gun-lovin' goldbuggin', or somepin... ;-)
Looney
P.S. Do I down-vote myself BEFORE or AFTER I kick myself in the balls? ;-)
Hey!...look at that!
We've got a whole conspiracy thingy happening here (the time stamp) ;-)
Who needs pressure cookers these days? IED Academy welcomes all applicants for hands on learning in Jordan, Turkey and Iraq. Final exam to be held in Syria. Come one come all.
And when you get creamed by the SAA, get hunted for beheading a bunch of people or some other trivial thing, just seek asylum in europe. God knows Europe needs more shellshocked extremists with demolition skills and shitforbrains roaming around with idle hands.
I hear Spain is hiring in construction.
completely politically in-correct.
Here comes the 1929-33 Durable Goods implosion, tick tock
Thanks for the heads up; I better order that FAGOR rice cooker right away; nice gooey, white FAGOR rice; hmmm. can taste it already.
Its 9nly $294, 000 in debt per employee, surely if they worked 10 times as fast that debt could be reduced in no time. Back to work pepper bellies.
The Rain In Spain...
https://www.youtube.com/watch?v=uVmU3iANbgk
The european economy is booming.
People should buy greek bonds.
Okay, I'll bite....how many polaks does it take to screw up a washing machine company ?
OK
1 to put the clothes in and 4 to spin the machine in circles?
It's all the Germans fault.
Don't drone me Bro!
Lawyers = LANDSHARKS!
Plastic handled pressure cooker zone/ Government walker required to Kindergarten!
They needed more cow bell.
It's really hard to have too much cowbell.
Nice picture update, from clothes washer to pressure cooker. I love Tyler's sly sense of humor.
A Fresh Start.
The pressure cooker industry has been devastated by .gov false flags.
Because Obama.
But....but..... I just read in the Wall Street Journal on Wednesday about Spain's remarkable, durable export engine now out proforming Germany and has gone through the fire and emerged more stronger than ever.
Didn't see anything mentioned about a sky high currency knee capping them and the impossibility of getting bank financing unless your a major multimational.
This must be some sort of mistake - I mean come on why would the WSJ lie?
the politicians on this side are now lying through their teeth! It does not cross your minds. We are hearing things like "there is an economic miracle recovery", "the foundation has been set for future growth", "we are weeks away from ending the recession", "there are clear signs of economic recovery".
Absurd I tell ya.
I guess it is pretty hard to accept that spain has overspent and has such a rigid labor market to protect the "rights" of employees that the country is going down the shitter.
If u understand spanish labor law you know why young peoPle are doomed to go from one shitty temP assignment to the next if they are even lucky enough to get it.
The older peoPle killed the goose that laid the golden egg, then cooked it and ate the goose too. Shitting all over the young generation and laying waste to their kids' future.
Debt is paid by either the borrower or the lender, but it will be paid. Facts are stubborn things.
Time for an international GE buyout.
Over.
¡Socorro!
But I am sure they are optimistic.
Have you ever been afraid to be tired? (want to sleep)
I am
If Fagor Mastercook ( of Poland) is filing for bankruptcy and employs 1400 of the total of Fagor Electromesticos personnel,which " employs 5,700 people worldwide", why the final statment in this article " that is up to 70,000 former Spanish jobs that will very soon be on the streets.. . " ? Mondragon, which employs more than 70,000 isn't closing down or filing for bankruptcy.
"The Polish offshoot's filing at a court in the northern Spanish city of San Sebastian did not affect the status of the parent Fagor Electromesticos, which is part of the sprawling Basque cooperative Mondragon."
Silly rabbit, never allow facts to get in the way of sensational journalism.
Boston Strong!
The War On Pressure Cookers...
I hear Albania is the hub for radical pressure cooker training camps.
Thousands more families without an income.
Think about that for a moment and what you would do if you lost your job.
Humans are becoming dispensible, irrelevant and surplus at a rate that callenges the value of civilization.
the penny has dropped and suddenly a man says Peter is not a pansy at the vampire's ball.
The entire population of Spain is close to the number of US persons on food stamps. Guess which grows faster.
Shit stinks worldwide.
the french are having a field day buying cheap property in Catalogna.
Catalogna? is that near Bologna? What's the zip code of Catalogna? I think we should all buy more Spanish Bonds.
put a "g" in your pizza topping if you want it to smell of goodies.
It seems some things are not TBTF.
their competitors must be uncorking the champagne; one flew out of the pressha cookaa!
There goes the Bankia, open an account get a free pressure cooker offer then;
http://www.bankia.es/en/page/id-1-1002-0-100298-442076-0-0%24PD%3D442080.go
Must not be a client of UnderTone. I've never heard of them.
Sorry workers, demonstrating won't do shit, the management needs to Fagor-it-out......
"Spain-Based Fagor, Europe's Fifth Largest Appliance Maker, On Verge Of Bankruptcy"
uh, like, their banks aren't?
:)
This is the end result of Spain's Socialist mafia green energy policy.
There's just no way a windmill powered factory can compete with the Chicom coal powered steam generated factories, even if they have zero employees.
In manufacturing electricity is a major expense, and if your major expense is 200%-300% higher than your competition, then you lose.
Bankruptcy is an integral part of the Socialist business model, the lenders from the very beginning sought to loot the assets of both the company employees as well as the factory owners when they began their Socialist journey.
Once all the assets have been transferred to the "true masters" worker rights as well as the "green agenda" go out the window.
How else can the masters of the universe buy productive assets that owners would never voluntarily sell?
That was a very cryptic phrase "they are not responding to the market". It makes it sound like a management problem rather than a product problem.
There shall only be German appliance makers!
German appliances suck (or fail to suck in the case of vacuums) as miserably as any other in Europe. The Europeans should just get out of the appliance business entirely and leave it to countries that actually want to dry clothes, clean dishes, or suck dirt, and not those countries that want to do a half-assed job at twice the price while claiming "it's for the children/environment" as a valid excuse for their dysfunction.
GOOD RIDDANCE! Bought a pressure cooker from them, it was faulty. This company deserves to die.
Frank (from the answering machine): Jerry, it's Frank Costanza, Mr. Steinbrenner is here, George is dead, call me back!
I live in Spain. Fagor's quality isn't so good compared with Bosch or Miele but costs similar. Spaniards were loyal to Fagor (to a fault, encouraging unrealistic prices) because it was a Spanish co-operative movement - but they had no export market. Then in 2007 the days of housing developers installing 1000s of kitchens a week came to an abrupt end and there was no export market left for them to fall back on. Whereas Bosch were still able to ship the odd container load of appliances to mop up limited demand for replacements. It's hard to see a way out short of leaving the Euro and devaluing, thereby making Spanish vacations and property extra cheap again, like they were 30 years ago.
Fagor products are crappy as hell.
No need for this shit.
Mondragon...
Jeepers. Isn't that the Co. that Socialists tout as being the warm hearted employee owned, where the CEO and the floorsweeper earn the same, workers paradise ?
Tossing their children to the wolves for the benefit of the 'Greater Good'?
Sounds suspiciously like EVIL, MEANSPIRTED and EXTORTIONIST run of the mill CAPITALISM to me.
Oh, say it isn't so.