US DOJ Confirms Antitrust Probe Of Compressor Industry

Two days after authorities in Brazil raided Whirlpool Corp.'s (WHR) offices there, the U.S. Department of Justice confirmed Thursday that it is investigating possible antitrust violations in the multibillion-dollar refrigeration compressor industry, in conjunction with international authorities.

"The Antitrust Division is investigating the possibility of anticompetitive practices in the compressor industry," said Justice Department spokeswoman Gina Talamona. "We are coordinating with other foreign competition authorities."

Whirlpool said Thursday that it received a grand jury subpoena Tuesday from the U.S. Justice Department seeking company documents. The company confirmed that Brazilian and Italian authorities visited Whirlpool offices in those countries on the same day.

Whirlpool said it would cooperate fully with the investigations and said that, to the company's knowledge, there have been no charges filed against the company or any of its employees.

Tecumseh Products Co. (TECUA), a Whirlpool competitor, said Wednesday that it, too, has received a grand jury subpoena from the U.S. Justice Department. Tecumseh said it also has received investigatory requests from Brazilian authorities and believes the European Commission is conducting an investigation. The company said authorities appear to be focusing on pricing issues.

Brazilian authorities swept through Whirlpool's Sao Paulo and Santa Catarina state offices Tuesday in an operation called Zero Grau, or Zero Degrees, with the objective to find evidence of a global cartel in the selling of hermetic compressors for refrigeration. The compressors are used in household refrigerators and freezers, as well as commercial vending machines and water coolers.

Sixty agents left with bags full of computers, laptops and other archival material.

Raymond James cut its rating on Whirlpool Thursday based on news of the investigation. "An investigation may aversely affect Whirlpool's ability to achieve pricing in its core white goods business in 2009, which is critical to its defraying input cost inflation and un-absorption rates," the firm said.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; [e-mail]

(Kenneth Rapoza contributed to this report.)