Maytag today
Date April 30, 2004
Section(s) Opinion
To the Editor:
In the U.S.S.R., especially during the Stalinist purges, the secret police would show up at someone’s door, say “come with us,” and that person was never seen again.
That is quite similar to Maytag today, April 27, 2004.
Joel Wormley
Newton
Hearts go out to Maytag workers
Date April 30, 2004
Section(s) Opinion
To the Editor:
Our community is once again experiencing the turbulence of employee reductions by one of Newton’s major employers. As pastors of a variety of churches we wish to express our support and concern for all involved.
Our hearts go out with compassion:
To those who have lost their positions through lay-offs or attrition;
To those who have been bearers of bad news;
To those who have had to make difficult personnel decisions;
and especially to families whose livelihoods have been upset.
As we find ourselves living, shopping, worshiping and playing together in the community, may we continue to look upon each other as sisters and brothers in the family of God.
This Sunday many of our churches will observe Good Shepherd Sunday. As the 23rd Psalm so eloquently puts it, God is in the business of accompanying us and providing for all of our needs.
Yours in faith,
Stephen Mathison-Bowie
First Presbyterian Church
Tiare Mathison-Bowie
First Presbyterian Church
Michael Dack
Congregational United Church of Christ
Howard Vrankin
First Lutheran Church
John Moore
Our Savior Lutheran Church
Cathleen Bascom
St. Stephen’s Episcopal Church
Ernie Braida
Sacred Heart Catholic Church
David Wendel
First United Methodist Church
Linda Butler
St. Luke United Methodist Church
Elder Stephanie Conklin,
Community of Christ
A different story
Date April 30, 2004
Peter Hussmann
Editor
f Maytag was a physician, it wouldn’t get very high marks for its bedside manner. If I had some dire plight, it might be too late before the doctor actually came forward about the condition I was in.
I hate to take that jab. Like everyone else, I’m sure those given the task of answering the prodding questions from those outside the inner sphere were only doing their job; doing what they were told. But it’s frustrating trying to tell the story when some key parts — on purpose or not, I do not know — are left out giving a potential false impression of what is going on. (One thing is certain, you have to know the questions to ask. Information is not freely divulged. But unlike a lawyer, you don’t know the answers before you ask.)
Earlier this week, I talked to Maytag about the job eliminations that were taking place at Maytag Plant 2. Two working days after about 115 production workers were laid off — due to a decline for washers and dryers made in Newton, the official word said — pink slips were being handed out to salaried Maytag personnel.
The calls to my office started coming in shortly after 7 a.m. At 8 a.m., I was on the phone to Maytag. The terminations, sad as they were, had to do with the necessity of aligning supervisory personnel at the plant to the reduced number of production workers on hand after the last two layoffs. With nearly 300 production workers gone in the past two months, the need for supervisors to oversee the production schedule needed to be reduced.
Made sense.
But it didn’t necessarily jibe with what those who were marched before the HR people had to say once they left the office. In a town like this, it’s not hard to find someone directly affected. Discussions I’ve had and heard paint a bit of a different picture.
While I was told that plant production supervisors were only those affected by the latest move, the reality is that individuals ranging from engineers to product purchasers to clerical workers — even the plant’s physician assistant — were targeted in the latest purge.
Now that’s a different story.
COMMENTING ON Maytag’s first quarter results, which were good save for profit margins and troubles at Hoover, CEO Ralph Hake indicated that aggressive cost reduction strategies would continue. Talk about foreshadowing.
My guesstimate is that in the three days following the first quarter report, Maytag has cut about $10 million from its local annual payroll, combining the loss of the latest Newton production positions (115) and the salaried jobs terminated Tuesday.
The estimates bantered about by those exercising their God-given right to drink beer after abruptly being shown the door is that about one-third of the salaried positions at Maytag Plant 2 were eliminated this week. And one has to remember that just last October, a good number of local salaried jobs were lost as part of the company’s plan to eliminate 500 positions corporate wide.
Cutting the fat is one thing, cutting the bone is another. People I’ve talked to — those who were included in the termination and those who were not — feel sorry for those left behind. Who, they ask, is going to do the work?
WHICH LEADS TO the question, what work will remain?
Earlier this year, Maytag made no bones about the fact that no new product platforms would emanate from the Newton facility unless a number of factors — cost, quality, delivery and safety — were rectified. What sort of rectifications were needed, however, were not stated.
At that time, it was generally felt the shot across the bow was aimed at the future union contract negotiations. Health care costs and retirement benefits were — and likely continue to be — targets for concessions.
The North Canton, Ohio, Hoover facility, faced with the prospect of closure, had recently approved a renegotiated contract which has been deemed a model of cooperation between the company and the local by Maytag. The agreement traded payment of a portion of health care costs for guaranteed employment levels. What those employment levels are, however, have not been stated.
A similar situation might play out here. What that might mean for local jobs, however, is yet unknown. But one can’t help but think that Maytag’s recent agreement with Korean giant Samsung Electric to build horizontal-axis washing machines — albeit at the current time such smaller models that fit under counters than the 27-inch models made locally — gives an option for Neptune production elsewhere. And, it should be noted, even if the inefficiencies noted by the company are fixed in Newton, it doesn’t necessarily mean a new platform here.
The bottom line is events of the past several days have shaken the community. Are more terminations planned? Will production layoffs continue? Are we headed the way of Galesburg?
It’s frustrating not to know. But only time will tell. Hopefully, the doctor will let us know the real state of our condition. Hopefully, we will be able to get some reassuring second opinions.
What you hear depends on the particular audience
Date April 23, 2004
Peter Hussmann
Editor
It’s all about your audience.
While Newtonites are absorbed with what’s going on locally with Maytag — more than 100 more layoffs today and additional rumors running rampant — listening to Ralph Hake give his spin on the corporation’s first quarter results to the investment community during a conference call on Thursday makes it clear this isn’t Fred’s company anymore.
A couple of hours after Maytag reported that revenues for the quarter were 7.3 percent higher than the same period the year before, investment professionals were grilling the Maytag CEO over margins, inventories and the problems at its Hoover floor care division. While the results overall were “good, but not great,” according to Hake, investors focused on the 22 percent slide — or “so-so” results — at Hoover to drive the stock price down as much as $2.40 a share at one time during trading on Thursday.
While the corporation’s major appliance group, which includes Newton production, did well for the quarter, the conference call showed that what goes on locally is only a portion of the big picture.
Some comments made by the CEO, however, might be used to see what the future might hold locally.
First of all, is the place the Maytag’s high efficiency laundry platform holds.
The premium laundry category is something Maytag created when it introduced the Neptune back in 1997. Retailers love it, Hake said, and consumers have bought into the product based on the resources it saves and the clothes care benefits it provides. The Neptune has validated the premium laundry category. Maytag’s new Neptune dryer is the next advance and will force competitors to follow suit.
Hake mitigated the impact of Samsung’s entrance as an outsourced front-load supplier to local production by saying its production focus will be on smaller units; products that can fit under countertops and be stacked in cramped quarters where the traditional washer and dryer might not fit. Production of the standard models will not be replaced by Samsung’s entrance as a supplier but will rather focus on smaller appliance models. However, Hake said, the goal is to source 30 to 40 percent of products from Asia.
Mr. Hake also made some statements to investors in regard to the “aggressive cost reduction efforts” alluded to in his prepared comments on the quarter that may give an inkling to previous corporate statements that Newton will not be the site of a new product launch until a number of cost containment factors are reached.
During discussion with investors, the CEO said the goal of the corporation is to remove 3 percent of total costs out of the equation each year. That amounts to about $70 million this year, he said, a whole lot of which will be eaten by rising steel prices.
It was no accident, I assume, that Mr. Hake’s prepared remarks also included the benefits the corporation will see from the renegotiated production contract at Hoover’s North Canton, Ohio, plant. With Newton facing a June 1 contract deadline, Hake took the time to say that inventory levels from production at Newton were set at a “hedge” against a 30 to 45 day strike. He also cited the labor negotiations at Newton and Amana, which comes up Sept. 25, as potential significant risks for the coming quarters. The relatively high inventory levels questioned by investors, Hake said, are also part of the contingency planning in place for the pending collective bargaining negotiations.
Interesting. But I think one might want to ask the laid off workers what they think of the remarks.
——
If you want to give your input on who might win two coming elections, stop by Drug Town next Thursday and Friday.
County Auditor Ken Slothouber plans to deliver a couple of voting booths to the Newton business next week as part of a straw vote and voter registration campaign. Residents, regardless of age, will be able to cast their ballots for presidential candidates George W. Bush and John Kerry and Democrat supervisor primary opponents Max Worthington and Pat Milligan. Slothouber plans to tally the votes and let us know which way local residents might be leaning prior to the coming elections.
——
Speaking of the coming primary election, a few yard signs in support of Max Worthington have popped up around town. In addition, his challenger, former supervisor Pat Milligan, filed a campaign finance report this week that shows he’s lent himself $4,000 to finance his primary bid. With no GOP candidates yet seeking the supervisor seat, the Democratic primary is for all the marbles.
——
I liked Pete Koppin’s suggestion that the city enact some sort of requirement that the city take care of dandelion control along the parking areas. Since it looks like the Spring Clean-Up is set to return, I’d be all in favor of city crews pulling my weeds at the same time they stop to pick up my junk.
——
Finally, the Chair-ries Jubilee event held last Saturday raised $20,000 toward the $30,000 purchase price of a new whirlpool system to be installed at Skiff Medical Center’s new hospice wing. The Skiff Auxiliary had pledge to raise the money over a three-year period and in just one event the Auxiliary met two-thirds of its goals. Way to go.
Remember Maytag’s forefathers
Date April 16, 2004
Section(s) Opinion
To the Editor:
The fate of this town is very grave. Newton based its hopes and dreams on a company which has lost sight of the founding forefather’s aspirations. Maytag’s name stands for quality, dependability, pride and craftsmanship unlike any other.
Unfortunately, the quest for wealth has given way to instability and a dispassionate attitude. To blame the employees for the company’s instability is unjust and naive. The average employee has little or no say in how things are done. When a flaw or defect is found on a part, it is still passed through inspection due to it “being minor.” But even minor imperfections can affect an image of excellence.
The problem now is the tight-fisted executives have disappointed the consumer to the extent that they are unsure of the reliability of Maytag products. My question to Maytag is this: If making the machines in Mexico and South Korea saves you so much money, why isn’t this savings passed on to the consumer?
If you relocate and terminate employment for these people, all you breed is bitterness and a loss of potential customers. Losing more jobs would deliver another devastating blow to an already weakened economy.
In short, by saving yourself a few dollars you risk losing more; a reputation built by the proud, hardworking Americans who support your products.
I challenge Maytag to consider your loyalty to the almighty dollar or to a town that has helped build Maytag into the company it is today!
Stephanie Bowers
Newton
Hake: Maytag in transition
Date April 16, 2004
Section(s) Columnists
Peter Hussmann
Editor
Shareholders attending next month’s annual meeting of Maytag Corp. can expect to hear some straight-forward talk from its CEO Ralph Hake, that is if he follows the script of his letter to shareowners contained in the company’s annual report.
In his message to shareholders, filed with the SEC this week, Hake describes 2003 as a year of “transition.”
“We squarely faced the competitive challenges of our industry and committed to make the necessary changes to successfully compete and win,” Hake says.
And while he acknowledges the “rich heritage” Maytag holds and what makes the company “special,” it “does not imply success in the future.”
“That brings us to where we are going,” Hake says. “We accept the world around us is changing and that we must change, too, if we are to further extend the power of our brand experience and enhance the profitability of our operations.
“The opportunities ahead, as well as the threats, begin and end with the markets we serve. Our future results will be determined by how well we serve the needs and demands of those markets and how well we respond to the challenges of aggressive foreign competition, declining product prices, channel consolidation and elevated consumer expectations.”
Hake says new ideas are needed for a new era. However, Maytag has in place several factors that will help it meet those expectations, including highly regarded brands, quality, a talented sales organization, a substantial logistics network and dedicated people.
But, Hake says, these strengths must be supplemented by “a new set of core ideas we must execute against to drive future performance. Rapid and compelling innovation is required for success. Our business is driven by products and great products will lead to good results — it’s that simple. We must create products that set us apart.”
Hake said the whole corporation must expand its lean, mean fighting machine mentality. The management system it uses as its efficiency model must not only continue within production operations, he says, but must expand throughout the entire corporate structure. The benefits of its use to date has been “dramatically improved quality and millions in savings…”
While the success of the corporation is contingent upon selling great products, manufacturing everything Maytag sells is not in the cards, he says.
“Our success results from designing and selling great products,” Hake says. “But we don’t have to, and in fact should not, manufacture everything we sell. In the eye of the consumer, it comes down to value. Maytag adds value to products in many ways through its brands, distribution, logistics systems, engineering design and testing. In many cases our manufacturing adds value, too. But when it does not, we need to source product from selected partners who agree to provide Maytag exclusive product. This sourcing strategy will provide more rapid product introduction with less investment and broaden the line of products we sell, distribute and service.”
Hake also talks of sacrifice.
“We must achieve best-in-class cost to compete globally and we know this transition will require sacrifice,” he says. “Aggressive cost management is a key to our success. We must partner with our supply base to support our strategic sourcing goals. We must also ask our employees to participate in cost containment. Hard decisions and tough negotiations come with the territory.”
Hake notes two specific instances involving those hard decision and tough negotiations.
The first is the closing of the Galesburg, Ill., refrigeration plant with production moving to Mexico and Amana.
“I want to express my appreciation and gratitude to Galesburg employees who have shown their continued dedication during this difficult transition,” he says.
Hake also notes the contract changes Hoover employees approved that will allow for continued operations in North Canton, Ohio.
“I am also particularly proud of employees at Hoover’s North Canton, Ohio, facility for showing the courage to change to help protect jobs,” he says. “We are extremely pleased with the open-minded support from Hoover’s union leadership and we are hopeful that the collaborative model created there between management and labor demonstrates how jobs can be saved in the face of global competition.”
Work, however, needs to continue in order for Maytag to meet its cost containment goals, particularly at plants in Iowa.
Hake says “2004 will be pivotal in our effort to achieve best-in-class cost levels. We must mitigate mounting pension and retiree medical expenses and we will negotiate two significant labor contracts at our Newton and Amana Maytag Appliances’ facilities.”
In his letter, Hake asks shareowners to learn about “a new Maytag… a company in the midst of transition and transformation in the way it does business, the way it reaches consumers, the way it creates the next generation of products that make life easier. We’ve set our sights on returning sustainable, profitable growth and after a challenging year… our time is coming.”
Though the transformation is well under way, Hake says, the financial benefits have yet to materialize. He expects that to change this year for a number of reasons.
First, he notes, all Maytag major appliance products have been renovated in less than two years. Last year Maytag also launched new cooking lines across the board, introduced new platforms in dishwashers and launched two laundry products. New refrigerators are on tap this year, including new top mounts “sourced” from Daewoo, wide-by-side refrigerators built in Amana and side-by-sides built in Mexico.
At Hoover, the focus is on cost and product positioning. New high-value products are in store and nearly 15 new products are slated for the market this year.
Maytag’s service business is also growing and a new housewares unit will market small appliances for the home. In addition, Maytag is expanding opportunities in luxury appliances by bringing its top-of-the-line Jade commercial cookware to the homeowner.
Hake says he is optimistic and enthused about the future of Maytag.
“Your company is undertaking enormous change at a fast-moving pace,” Hake says. “My thanks to the talented people of Maytag for their dedication and courage as we move forward with this transition. I believe we accomplished many key goals in 2003 that form the basis for improved results.”
As I said, more straight talk from the Maytag CEO. You can decide for yourself what it all means.
Maytag Story Archive 