"We need to have more passion for products," he says. "We need red goods, blue goods, yellow goods. Washers and refrigerators should have attitude and personality."

Treschow is betting that customising design and colour of household equipment will boost brand awareness and, eventually, sales, in the mature white-goods industry. He also predicts Electrolux will be riding the wave of new Internet technologies that will interconnect household appliances and allow them to be controlled via mobile phones, personal digital assistants or a TV screen. The kitchen is the center of each household, the logic at Electrolux goes, and it won't escape the Internet invasion: The company already has launched the Screenfridge, aninteractive refrigerator that keeps track of food-shopping needs and provides cooking tips.

Of course, gadgets and glitz alone aren't enough to keep ahead in today's white-goods industry. Product pricing, and thus cost control, ultimately determines what profit margins will look like for household-equipment makers like Electrolux and its main competitors, General Electric Co. and Whirlpool Corp., both of the US, and Bosch-Siemens, a joint venture of Bosch AG and Siemens AG of Germany.

"Cutting costs is the name of the game," says Hans Westerberg, a white-goods industry analyst with Myrberg Securities in Stockholm. "High-tech features on refrigerators and stoves play second fiddle and will not have a big impact on volume for now." Treschow knows that like no one else. On the day he became chief executive, he embarked on a rigorous restructuring programme. He laid off more than 12,000 workers and sold several non-core businesses, including Gotthard Nilsson AB, an aluminum-recycling company. To pay for it,he took a one-time restructuring charge of 2.5 billion kronor ($300 million) in late 1997.

The price Treschow paid was high: Media dubbed him "Mike the Knife," and the atmosphere among workers at the company turned sour. A feeling of fear still exists among some employees today. "There was a lot of yelling and screaming and discussion," he says. "It was very painful, but it had to be done."

Electrolux has improved its performance during Treschow's tenure. Profit more than quadrupled to 5.9 billion kronor in 1998 from 1.3 billion kronor in 1997, excluding restructuring costs of 2.5 billion kronor for the year. But that still hasn't erased the potential impact of a weakening Brazilianmarket, which makes up roughly 5 per cent of the company's total market, and a possible downturn in demand in the US and Europe down the road.

Further cuts may be needed, even as the company is leaner today than it has been in years. "We'll do whatever it takes," he says. "Brazil remains an unknown factor for now."Uncertainty about market developments aside, Treschow's cost-cutting bout has created more financial space for product development, which he thinks is a pivotal part of the future success of Electrolux. As a result, the company's two design centers-one in Stockholm and one in Porcia, Italy-each have churned out a growing number of snazzy-looking household products. Few of the products have hit the market, but most have attracted media attention and triggered the imagination of consumers.

For example, Electrolux designed a vacuum-cleaning robot that roves through a living room without any human help. Though the round, compact machine, which looks like a cookie box, caused a stir in the media, it hasn't been launched yet, and it is uncertain whether it ever will be. "We're trying to see if there is a market for the robot," says Folke Hammarlind, spokesman for Electrolux. "But even if there isn't, this shows that we are thinking about the needs of consumers."

Other conceptual products in the company's glitzblitz include the Lighthouse, a refrigerator that serves as a table or working-surface; the Teo Cooker, a curvy stove that comes in deep yellow and sports a cartoonish flame design on the front; and the Oz, a pear-shaped refrigerator that is on the market.

The company is also pushing a series of refrigerators called NOW, an acronym that stands for Not Only White. The series features countless interior and exterior components, from stainless-steel doors to wooden shelves to leather-coated handles, that consumers can mix and match to create the refrigerator of their dreams, for a price between 7,000 kronor and 12,000 kronor per refrigerator.

The Asian Wall Street Journal