A different story

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.

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One Response to “A different story”

  1. Sports Direct Says:

    If that is the case how come I dont see it from what youve written. Please explain.
    J

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