Maytag, UAW contract negotiations under way

Maytag, UAW contract negotiations under way
Date April 07, 2004

By PETER HUSSMANN
Editor

Contract negotiations between Maytag and UAW Local 997 representatives began today as workers received unofficial word that another round of layoffs could be pending later this month.

The outcome of the new agreement was targeted by Maytag Chairman and CEO Ralph Hake in comments at the beginning of the year as key to future production operations in Newton. The current contract expires May 31.

“Especially at Newton,” Hake told the investment community in releasing last year’s financial results, “we will be examining, with union leadership, how that plant can become more cost effective and competitive so that they may again become eligible for new product platforms and preserve jobs.”

Maytag Appliances President Bill Beer echoed those remarks saying that “as it stands today, Newton is not eligible for new product platforms. There will be no new launches here.”

At issue, Beer said, is the Newton plant’s ability to be competitive with its other operations in quality, cost, safety and delivery considerations.

“We use these performance criteria as the basis for our decision making on where we make capital investments and where new product platforms go,” Beer said in an interview with the Daily News more than a month ago. “In general, the Newton laundry facility has challenges against these performance criteria compared to the others. Newton has not been selected for our last two laundry launches, the Neptune TL (Florence, S.C.) and the Drying Center (Herrin, Ill.).

In addition, it was announced in late February that a new product line of high efficiency, front load Maytag and Amana laundry products will soon to be produced by South Korean manufacturer Samsung.

While Maytag and union officials have not identified specific issues to be negotiated in the pending contract, the situation at a Maytag Hoover plant in North Canton, Ohio ,may be instructive.

Maytag said it would close its vacuum operations in Ohio next year unless the union representing workers at the plant agreed to concessions. Hoover profits have tumbled in recent years due to competition with low cost overseas manufacturers.

Late last year, the union membership agreed to a new five-year contract which calls for workers to pay an increasing percentage of health care costs. In exchange, Maytag agreed to job security language in the contract that guarantees minimum levels of employment at the production plant.

Maytag officials said the renegotiated contract with Hoover employees could serve as a “model” for its other U.S.-based operations.

“Their actions are a model for the compromises that are required in the face of imported products coming from low-cost countries — a model for the preservation of jobs and facilities that can effectively compete,” Hake told investors earlier this year.

Local Maytag workers argue they have long been contributing to their benefits package.

Since 1980, the union has agreed to divert 25 cents of its cost of living adjustment back to Maytag, plus additional amounts in contracts approved in 1989, 1995 and 2001 for health care benefits.

All told, workers have diverted $2.58 in hourly wages for health care benefits, which currently amounts to more than $5,300 in yearly pay.

The Newton production facility has seen a steady decline in employment levels since the launch of the Maytag Neptune in 1997.

After the last layoff of 170 workers in late February, production levels are down about 600 workers in the last several years. Should the layoff occur as unofficially announced, those hired as long ago as 1997 could find themselves vulnerable to layoff.

Both sides have said they expect negotiations to go smoothly.

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