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According to a recent Businessweek report, Whirlpool Corp. (NYSE: WHR ) issued a dishwasher recall that was the largest of such recalls in three years. Apparently, 1.7 million of its Maytag models (Whirlpool acquired Maytag in 2006) have a faulty heating element that can short-circuit and ignite, creating a fire hazard. So far, there have been 12 reports of fires, but no one has been injured.
Whirlpool estimates the recall cost at approximately $75 million. The company sells appliances under the brand names of Maytag, Amana, Jenn-Air, Admiral, Magic Chef, Performa by Maytag, and Crosley, and products are sold at major retailers like Sears Holdings (Nasdaq: SHLD ) , which accounted for 10% of total Whirlpool sales in 2009.
In the past, we've seen recalls do major damage to a company's brand, such as Toyota (NYSE: TM ) . The total recall cost for the sudden acceleration problem is now being estimated at over $2 billion. That number includes lawsuits, warranty payments, and lost sales. Toymaker Mattel (Nasdaq: MAT ) also experienced embarrassment and brand damage when a recall of Chinese-made toys with excessive amounts of lead cost the company $30 million back in the second quarter of 2007. And the near-ubiquitous McDonald's (NYSE: MCD ) has just issued its own recall of cadmium-tainted drinking glasses.
However, some such instances have been a mere blip on the radar screen (E.coli-laced spinach, anyone?). Will there be any considerable brand damage to Whirlpool? And more broadly, if there's not, is it too much to ask that products be safe and not seriously injure (or, god forbid, kill) consumers? Let us know what you think in the comments box below!