Frigidaire's Run For The Cold CashZachary Schiller
Frigidaire President Hans G. Backman didn't need much convincing that his company should try to win the refrigerator competition launched by a group of utilities. Frigidaire Co. was already hard at work on more efficient units free of chlorofluorocarbons (CFCs). "Just the time frame was shorter," says Backman. A win would also help Frigidaire with its main strategy: to set apart its top brand and firmly differentiate its products. So last August, Backman gave the Super Efficient Refrigerator Program Inc. (SERP) contest the nod.
In meetings at its refrigerator unit in Greenville, Mich., Frigidaire brought together as many as 30 marketers, engineers, and manufacturing officials to brainstorm the entry. By then, Frigidaire had already made the first key decision: to drop all exotic technologies. "In order to meet the timetables, we felt it was necessary to take known technology and enhance it," says Dennis E. McCloskey, head of the company's refrigerator business and team leader.
CHIPPING AWAY. Frigidaire also decided early on to base its SERP models on its new UltraStyle line, a 1992 design overhaul featuring a rounded look, made on a new production line in the Greenville plant. For its SERP prototype, Frigidaire put a "smart" compressor inside the cabinet. It was already being designed by Americold, which like Frigidaire is owned by Sweden's Electrolux. The compressor is said to be the first to rely on a computer chip that recognizes the load and raises or lowers the operating rate accordingly, instead of simply turning on or off.
Frigidaire was also well along with replacements for CFCs. The company already had reformulated its foaming agent to cut the CFCs in its insulation by 50% in non-consumer models. Still, the company had to do plenty of further refinement and testing to cut out the rest. It got help from Americold and Electrolux, which recently introduced some CFC-free models in Europe, in shifting to HFC-134A as a refrigerant.
Making further energy-efficiency gains also wasn't easy. A small group worked seven days a week, often 10 hours a day, from before last Christmas until this May. The team was taken aback when a key component expected to get one-third of the needed energy savings hardly provided any. "That was a low point," says product planner Brian P. Dillon.
Backman says he's happy now that he went through with the SERP bid, but he wasn't always so certain. "There have been one or two times we asked: 'Shall we continue or not, considering all the other projects we have?'" Stretched for resources, Frigidaire had to delay other new products. In addition, some of the UltraStyle line on which the SERP models are based may have been experiencing more failures than expected at the Greenville plant--though the company says its startup problems were normal.
Even if Frigidaire wins, "it's not a bonanza," says marketing chief Arjan J. Gursahaney. But the SERP contest has forced Frigidaire to slash in half, to nine months, the time it usually takes to develop a product and has pushed it to put "gold" in the system with its new compressor, as McCloskey puts it. Because of the compressor's cost, that's something Frigidaire wouldn't have done without the prospect of SERP's prize money. In the end, consumers are likely to see some of Frigidaire's SERP models whether or not it's named the winner.