What you hear depends on the particular audience

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.

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