Archive for March, 2004

Maytag CEO sees salary cut

March 25, 2004

Maytag CEO sees salary cut
Date March 25, 2004
Section(s) Local News

By PETER HUSSMANN

Editor

Maytag Chairman and CEO Ralph Hake saw his base salary increase by $50,000 last year, but his overall salary dropped by nearly $600,000.

The salary figures were released as part of documents filed with the Securites and Exchange Commission in advance of the corporation’s annual meeting set for May 13 in Newton.

Hake’s base salary jumped from $800,000 to $850,000 in 2003, representing a 6.25 percent increase, the SEC document states. He did not, however, receive any incentive payments for meeting financial goals for the corporation last year.

In 2002, the first full year of his employment with Maytag, Hake received $800,000 in base salary, $800,000 in annual variable incentive and $103,000 in long-term incentives, bringing total compensation to approximately $1.7 million.

With his new base salary and long-term incentives, Hake’s overall compensation in 2003 dropped to $1.13 million.

Hake’s annual incentive pay is based on the company’s performance. According to the SEC report filed on Monday, “Maytag did not reach the threshold level of financial performance in 2003, but did fulfill many of its strategic objectives.”

In granting Hake’s base salary increase last year, the compensation committee of Maytag’s board of directors said it arrived at the rate by considering his annual base salary compared to CEO compensations in other industrial companies, his performance and his strategic actions and plans for 2003 and beyond.

“Based strictly on Maytag’s performance against the financial goals approved by the compensation committee and the board for the CEO at the beginning of 2003, Mr. Hake was not awarded any annual variable incentive compensation,” the report states.

The SEC documents also list the salaries for several other top executives including Maytag Appliance Division President Bill Beer.

Beer’s base salary in 2003 jumped from $328,000 to approximately $350,000. His annual incentive payment dropped from $213,000 in 2002 to $166,000 last year. His total compensation for the year was approximately $600,000, the SEC report states.

Maytag CEO makes 31 times wage of factory worker

March 25, 2004

Maytag CEO makes 31 times wage of factory worker
Date March 25, 2004
Section(s) Opinion

To the Editor:

I find it ironic that the Maytag Company officials have taken the stand that the hourly employees are making too much money. It was revealed yesterday that Maytag CEO Ralph Hake received a 6.25 percent yearly raise. His salary now stands at $1.15 million a year.

How can they say that we are costing this company too much money when one man makes 31 times what the average employee makes? That doesn’t include stocks and options. How much is truly enough?

The Newton facility is the most productive in the corporation. Generations of Iowans have given their best years to this company. The entire corporation was purchased on the backs of the Newton employees! Those of us in Newton have done our share to make this a profitable company.

Compare us to the sports world. If a team doesn’t do well they don’t get rid of the team, they fire the coach. Maybe it is time that we adopt that approach!

Chris Schoh

Newton

Maytag employees have paid insurance costs for years

March 25, 2004

Maytag employees have paid insurance costs for years
Date March 25, 2004
Section(s) Opinion

To the Editor:

I have been a Maytag employee for over 17 years. I find it interesting watching our corporate officers spread their propaganda across this community. They have spoken at every civic group and organization in Jasper County.

The main topic of conversation seems to be our insurance. The general public has a right to know the truth concerning this matter. We have diverted a share of our cost of living raises toward our insurance costs since the early 1980s. The hourly total now stands at $2.58 an hour. If you take $2.58 an hour times 2,080 hours worked a year, it equals $5,366.40 a year. If you take that dollar figure times 1,650 employees that are currently working, it equals $8,854,560 dollars every year that we have given back to the company to pay for our insurance!

The company needs to tell the whole truth when it comes to our insurance. Our union has a long history of honest bargaining with the Maytag Company. It is unfortunate that our current corporate leadership feels that telling half-truths and spreading false propaganda to the public is the proper way to handle negotiations.

Vickie Hewitt

Colfax

Maytag creates separate appliance services business unit

March 23, 2004

Maytag creates separate appliance services business unit
Date March 23, 2004
Section(s) Local News

Special to the Daily News

Maytag Corp. announced today that its Maytag Services consumer in-home appliance repair operation will become a separate business unit within the company. The newly formed Maytag Service business unit remains part of the corporation’s Major Appliances financial reporting segment, along with Maytag Appliances and Maytag International.

Arthur B. Learmonth, formerly Maytag Appliances’ senior vice president supply chain, has been promoted to lead the new unit as president of Maytag Services, effective April 1. Learmonth will report to Ralph Hake, Maytag chairman and CEO.

Last year, Maytag announced the formation of Maytag Services to provide repair and maintenance services to Maytag brand appliances, as well as other major appliance brands. Since then, Maytag Services has expanded this service into select markets nationwide.

“We view Maytag Services as a significant opportunity for the company to extend its brand and reputation for dependability by providing consumers with a quality service alternative,” said Hake. “Consumers today have fewer appliance service options. By making Maytag Services a separate business unit, we’re affirming our strategy to become a growth-oriented services business for Maytag-branded appliances and other major appliance brands.”

Maytag Services’ new leader, Learmonth, has worked extensively in lean manufacturing. In 1997, he joined Maytag Appliances as vice president manufacturing and engineering, before taking on the role of senior vice president, supply chain in Maytag Appliances during 2003, leading the company’s LeanSigma & reg; efforts at transforming its major appliance product development and manufacturing processes.

“Art’s experience in lean methodology will be extremely important in leading Maytag Services in his new role as president,” Hake said.

With this change, Steven D. Benton, the current vice president and general manager of Maytag Services, has been named Maytag’s vice president of strategic alliance development, effective April 1, reporting to Roger Scholten, senior vice president and general counsel.

Benton will use his 30 years of Maytag experience to support the company’s strategic alliances, OEM development and other business opportunities. He has held leadership positions within Maytag Appliances, regional operations and marketing, and corporate development, where he successfully led the integration of Amana into the Maytag family of brands.

“Over the past year, Steve has led Maytag Services to this critical point, allowing us to make it a separate business unit,” Hake said. “Maytag is now going to benefit from Steve’s experience to contribute to continued growth opportunities for our company.”

Maytag Corporation is a leading producer of home and commercial appliances with 12 manufacturing facilities in the United States. Its products are sold to customers in the United States and in international markets.

Maytag scaring away customers and investors

March 23, 2004

Maytag scaring away customers and investors
Date March 23, 2004
Section(s) Opinion

To the Editor:

The following is an open letter to Ralph, Bill and everyone else whose operating strategies are rapidly weakening our company’s reputation in the marketplace.

Certain market conditions are favorable for our company’s success, such as low interest rates and strong new housing sales. The last several quarters have seen both, and as a result, the household appliance industry in general has been doing quite wells, as I understand it. Except Maytag. Word around the campfire is we are losing market share. In my opinion, these are some reasons for this disturbing trends.

First of all, we are scaring away potential customers. That’s right. I see it like this:

Traditionally, when someone dropped their hard-earned cash on a Maytag appliance, they expected it to last a long, long time. Many of our machines have lasted the lifetime of the purchaser and beyond. Quality and dependability have been our stock in trade for several decades.

But lately, every time Joe Average consumer opens his newspaper or switches on his foreign-made TV, he sees yet another news story about Maytag off-shoring another sub assembly, or worse yet, an entire assembly line to peasant labor in some Third World country.

Ralph said to us, “You can build quality anywhere.” Maybe he is right, but it really doesn’t matter because it a potential customer doesn’t agree, then we just lost a sale. I fear we have lost a lot of consumer confidence in our brand name because of our foreign outsourcing and all the bad press that has resulted from it.

Secondly, stop scaring away potential investors with spooky language.

Investors are only human and we all know that humans, as a rule, are afraid of change. If said change is perceived as unnecessary, too complicated or even just confusing, this fear intensifies. Lloyd Ward started all this big impressive talking nonsense and Ralph Hake is making the same mistake talking to potential investors today. Just climb down from your stack of college degrees and stop trying so hard to impress these people because it isn’t working, you’re only making them skittish, in my opinion.

In the last few weeks we have been told over and over how inefficient and wasteful we all are. Well, as I see it, we just follow orders, do as we’re told, using the equipment you provide us. It’s your responsibility to present us favorably in the marketplace…

Do I think I have a better plan? You bet… I do. Stay tuned, I’ll share it with you soon.

Rich K. Harris

Newton

Maytag’s Jackson Dishwashing Products wins ‘Nobel prize’ for excellence in manufacturing

March 23, 2004

Maytag’s Jackson Dishwashing Products wins ‘Nobel prize’ for excellence in manufacturing
Date March 23, 2004

Special to the Daily News

NEWTON — Maytag Corporation’s dishwashing plant in Jackson, Tenn., is one of 12 recipients of the 2004 Shingo Prize for Excellence in Manufacturing. Dubbed the “Nobel prize of manufacturing” by Business Week magazine, the Shingo Prize is the only industrial excellence award in the world that focuses on lean manufacturing, and Maytag Jackson Dishwashing Products is the first appliance manufacturer to receive the award.

Maytag Chairman and CEO Ralph F. Hake called the dishwashing plant’s award “an achievement that represents the finest efforts of Maytag people and an inspiring example of what our LeanSigma & reg; philosophy can help us accomplish.

“I congratulate our Jackson associates who worked as a team to deploy LeanSigma & reg; methodology to its fullest, making our dishwashing operations a world-class facility that is a source of great pride across our company. This prize will inspire our other sites to strive to reach the same level of manufacturing excellence,” Hake said.

“We believe that through committed applications of our LeanSigma & reg; philosophy and through a committed and dedicated workforce, our U.S. manufacturing plants can become more competitive, grow and prosper,” he continued.

Maytag’s Searcy Laundry Products in Searcy, Ark., was a finalist for the 2004 Shingo prize.

The Maytag LeanSigma & reg; philosophy, which combines lean manufacturing methods with Six Sigma tools, was the path for transformation beginning in 1999 at the Jackson plant. Significant improvements were achieved in safety, quality, cost and delivery — the performance measures used at all Maytag plants.

Terry Spalding, director of manufacturing at Maytag Jackson Dishwashing Products (JDP), explains that the plant’s associates belong to empowered “High Performance Work Teams” producing more than 100 models of dishwashers with brands including Maytag & reg;, Amana & reg; and Jenn-Air & reg;.

“Our team culture encourages empowerment at all levels in the decision-making process. Maytag Jackson team members are totally committed to the never-ending quest for continuous improvement. They are dedicated to creating a safe environment and to providing a top-quality dishwasher in the quantities required by our customers, at the time required by our customers,” Spalding said.

Some of the improvements in safety, quality, cost and delivery achieved by JDP are:

* Transformed a single assembly line into eight one-piece flow assembly cells allowing flexibility to produce any of more than 100 models in any hour of the day.

* Reduced the OSHA recordable injury rate by 65 percent

* Improved attendance by 16 percent to 99.1 percent

* Improved labor hours to produce a unit by 29 percent

* Reduced scrap and rework costs by 64 percent

* Improved first pass quality yield by 88 percent to 99.15 percent

* In 2003 alone, conducted more than 2000 kaizen events and performed 53 Six Sigma projects to help generate several million dollars in cost reductions.

November shutdown planned for Galesburg refrigerator

March 19, 2004

November shutdown planned for Galesburg refrigerator production
Date March 19, 2004

GALESBURG, Ill. (AP) — The last refrigerator will roll off assembly lines in mid-November at Maytag’s Galesburg plant, part of a planned shutdown that will shutter the city’s largest employer by the end of the year, the company said Thursday.

Production of side-by-side refrigerators will end the week of Sept. 20 and the plant’s top-mount lines will close the week of Nov. 15, Maytag spokeswoman Lynne Dragomier said.

Most of the plant’s remaining 1,200 workers will be laid off as the assembly lines are shut down, Dragomier said. Some employees will stay through the end of the year to help with shutdown and cleanup, she said.

“That brings a lot of closure, knowing there are dates set now and we can start planning,” said Marty Settles, a 20-year Maytag employee.

About 400 workers were laid off last September as Maytag began scaling back production at the plant, which employed 1,600 workers when the planned closing was announced.

Maytag announced the closing in 2001, saying the Galesburg plant was no longer “competitively viable” after competitors began cutting costs by moving production to Mexico.

The company will shift side-by-side production to its plant in Amana, Iowa, and a new facility that will open later this year in Reynosa, Mexico. Daewoo International will take over top-mount production under a contract with Maytag, Dragomier said.

A center that assists displaced employees with services ranging from career planning to unemployment benefits will continue at the plant through the end of the year, she said.

Maytag reaffirms earnings call at investor’s conference

March 1, 2004

Maytag reaffirms earnings call at investor’s conference
Date March 01, 2004
Newton Daily News Staff

Maytag Corporation today reaffirmed its 2004 earnings estimates during the 25th annual Raymond James Institutional Investors Conference.

Ralph F. Hake, chairman and CEO of Maytag Corporation, and George C. Moore, executive vice president and CFO of Maytag Corporation, reiterated that for the full year the company is expecting reported earnings of $1.90 to $2 per share, including restructuring charges of 40 cents related to the closing of its Galesburg, Ill., plant. As previously announced, earnings per share in the first quarter are expected to be in the range of 42 to 47 cents, including Galesburg-related restructuring charges of 8 cents.

“We anticipate low single digit growth in unit sales in the major appliances and floor care industries in 2004,” Hake said. “We expect to outgrow the industry in both categories and expect to improve profitability through our product launches, sourcing agreements and efficiencies gained through LeanSigma & reg; implementation.”

One recent development of concern is the imposition of surcharges and proposed price increases for steel.

“We’re working to overcome the impact,” Hake said. “We have implemented cost reduction measures and will continue to take other actions to offset the risk of increases in steel costs in 2004.”

Maytag’s stock was up 46 cents at $28.69 in morning trading.