Electrolux Chief Quits As Losses Mount

Arjan Gursahaney, the country head of AB Electrolux the manufacturer of the Kelvinator brand of refrigerators and the chairman & managing director of the Swedish appliances majors two Indian subsidiaries, Intron and Maharaja International, has put in his papers.

He leaves Electrolux with effect from April 30, 1997.

A finance and corporate team from Electrolux is scheduled to arrive in the country next week to take stock of the huge losses accumulated by the two companies and to put the Swedish giant back on track. Lennart Ribohn, senior executive vice president & president of new markets division of AB Electrolux, is also due to arrive in the middle of the month.

 

A general announcement dated April 02, 1997, and circulated to the Indian management from Stockholm states: Arjan Gursahaney, after 32 years of dedicated service, has announced that he has elected to retire effective April 30, 1997. Gursahaney, who joined the new markets division in February 1994, has spent the last two years in India as the chairman and managing director of the two group companies, Maharaja International and Intron, as well as serving as director of Eureka Forbes.

The announcement, signed by Ribohn, adds: Gursahaneys replacement will be named later.

Insiders say Gursahaneys abrupt departure may be related to the indifferent performance of the Swedish multinational in India which has been facing a major challenge in the Indian market from Godrej, BPL, Samsung and Whirlpool, as well as a lack of success in pushing through the multinationals holding company plan. A 100 per cent subsidiary proposal of Electrolux had been rejected by the government last year.

The multinational also failed in its attempt to hike its equity stake in its joint venture with Tatas Eureka Forbes, the vacuum cleaner maker from the current 40 per cent.Numerous attempts to contactGursahaneyfailed.Maharaja International, the refrigerator company, is heading for a loss of about Rs 14 crore for the year ended March 1997. Intron, the washing machine subsidiary, is likelyto make accumulated losses of Rs 24 crore with last years losses touching Rs 5.5 crore.

Introns board meeting, which was scheduled to be held on March 31, was adjourned because of a lack of quorum.

The company has projected sales of 18,000 washing machines in 1997, but it is not expected to sell more than 10,000 washing machines this year.

Insiders say the company, which had expected to use the brand equity of Kelvinator, miscalculated by going in for a nation-wide launch of its refrigerators, instead of a phased launch region-wise. They say that the company has, as a result, accumulated large inventories of its products.