hift of power and decision making authority to Sweden and, just like many mergers, the possibility of laying off big part of the Zanussi's entire work force. However, Electrolux dealt with the situation in a different manner. Yes they reduced Zanussi's work force but they did it through forcing some people into early retirement and in stopping the hiring process.Another important issue had to deal with SELECO, an Italian producer of television sets. A majority of SELECO shares were held by REL and the rest by Zanussi and another company. Zanussi was committed to buy REL's majority holdings of SELECO and although Electrolux had no intention of entering the television business they agreed. The other dispute had to do with the Spanish appliance company IBELSA. Electrolux accepted this term as well. But the one term that Electrolux did not accept was the dispute on some machinery buy back that previous Zanussi's managers did by breaking Italian tax laws. Electrolux refused to assume such a risk until the Italian government promised them not to take any punitive actions against the Swedish firm. Another important issue had to do with the financial structure of the company. Electrolux was simply not willing to take over a majority ownership of Zanussi since this would have had major effects on the bookkeeping records of Electrolux. It would have also affected negatively the Electrolux's share price. To solve this problem a consortium made of few Italian financial institutions was established and took on a large part of the shares while Electrolux maintained 49%. Now Electrolux had to deal with the integration process of Zanussi. When Electrolux visited the Italian factories they found old technology that needed to be changed, updated and more automated in order to come up with better quality products. But Electrolux executives came across a very skilled and knowledgeable workforce. Another issue Electrolux faced after the acquisition was the ...
