Archive for August, 2004

Illinois county seeks Maytag settlement in lieu of lawsuit

August 27, 2004
Illinois County seeks Maytag settlement in lieu of lawsuit
Date August 27, 2004
Section(s) Business
GALESBURG, Ill (AP) — The Knox County board has approved a motion that allows the state’s attorney to seek a settlement from Maytag to recoup property tax breaks.

State’s Attorney Paul Mangieri had requested that the board approve a lawsuit that seeks $1.1 million, but the board voted Wednesday to pursue a settlement instead.

Mangieri said Maytag got more than $1 million in tax abatements that it shouldn’t have.

Maytag spokesperson Lynne Dragomier has said the company repaid all its state and city loans when it announced plans to close its Galesburg plant.


Maytag Amana plant, union start contract talks

August 26, 2004
Maytag Amana plant, union start contract talks
Date August 26, 2004
Section(s) Business
DES MOINES (AP) — Negotiations have begun toward a new contract covering 1,530 union workers at Maytag Corp.’s Amana refrigerator plant.

“They started earlier this month,” Maytag spokeswoman Lynne Dragomier said Wednesday.

The workers at the plant in Middle Amana are represented by Local 1526 of the International Association of Machinists and Aerospace Workers.

Their current contract expires Sept. 25.

A union representative did not immediately return calls Wednesday.

Workers at the Amana plant last went on strike Sept. 23, 2001, about two months after Maytag bought the company from Goodman Global Holdings Inc. The strike ended about eight weeks later.

The resulting three-year contract boosted pay by about 10 percent and included a two-tiered wage structure that allowed the company to start new workers at lower pay.

The Amana negotiations follow a 27-day strike at Maytag‘s laundry products plant in Newton. The 1,525 workers represented by the United Auto Workers make Maytag‘s high-end washers and dryers, including the Neptune and Atlantis models.

The Newton contract requires workers to pay more for health care. It also reduced the company’s costs for retirement benefits for future workers.

Similar concessions could be sought from Amana workers as Maytag strives to cut costs.

“Is there more work to be done? Absolutely. Are we making pretty good progress? Yes,” said Ralph Hake, Maytag‘s chief executive, in a July 23 conference call with analysts. “We are a long way ahead of where we were several years ago.”

The Amana talks are occurring as Maytag winds down operation at its Galesburg, Ill., refrigeration plant. The company announced in late 2002 that the plant would close, idling 1,600 workers.

The refrigerator production is moving to Amana and a new factory in Reynosa, Mexico.

Prosecutor: Maytag owes taxes

August 17, 2004
Prosecutor: Maytag owes taxes
Date August 17, 2004
Section(s) Local News
GALESBURG, Ill. (AP and NDN Staff) — The Knox County state’s attorney plans to sue Maytag Corp., which is closing its refrigeration plant here, for $1 million in real estate property taxes, his office announced Monday.

State’s Attorney Paul Mangieri has scheduled an 11 a.m. Tuesday press conference about the taxes, which he says the company owes, Mangieri’s office said in a statement.

“No contact was made with any representative of Maytag‘s Galesberg facility or Maytag Corporation prior to a press release being issued by the state’s attorney announcing today’s press conference,” said Maytag spokesperson Lynne Dragomier. “We cannot comment on the specifics of the issue until we receive information about the state’s concerns.”

Maytag announced in October 2002 that all 1,600 employees at the refrigeration products plant would lose their jobs by the end of 2004.

“When we announced in October of 2002 the planned closing of the Galesberg refrigeration plant, we repaid immediately in full all loans from the state and city well before the loans matured,” Dragomier said. “This is the first we have heard of an issue around repayment of abated taxes and we are eager to hear from the state’s attorney to understand the situation.”

Company officials said production will move to Amana, Iowa, and a plant will open this fall in Reynosa, Mexico.

About 380 workers at the Galesburg plant have already been laid off, and last month a required 60-day termination notice went out to 875 full-time production workers. They will be out of a job in mid-September.

About 200 employees will continue working until their jobs are phased out by February 2005, officials have said.

Moody’s lowers Maytag outlook

August 13, 2004
Moody’s lowers Maytag outlook, keeps Newton’s bond rating high
Date August 13, 2004
Section(s) Business
By Daily News staff

Moody’s Investors Service lowered its outlook for Maytag Thursday, dropping the company from a “stable” rating to “negative.”

The company cited Maytag‘s lower second quarter results for the move.

“Recent weak performance at Maytag‘s floor care business — Hoover — is likely to remain a major challenge as Asian imports continue to gain more influence in the U.S. market,” Moody’s said.

Meanwhile, Moody’s kept its bond rating for the City of Newton at A1, City Administrator Dave Schornack said.

“We can’t do any better than that,” he wrote in his weekly administrator’s report.

“Moody’s was very impressed with what the City Council and staff had done to address the reduction in state aids.”

Maytag gives customers chance to take appliances for a spin

August 6, 2004
Maytag gives customers chance to take appliances for a spin
Date August 06, 2004
Section(s) Local News

Associated Press Writer

DES MOINES (AP) — New Maytag appliance stores opening in cities across the country allow customers to take a new washer for a spin, avoiding the agitation of a crowded noisy discount store.

A mom curious about an oven’s baking capacity can make cookies while she ponders her purchase. If she needs to know how many pairs of blue jeans a particular dryer can handle, she’s more than welcome to throw a load of laundry in.

If she has youngsters with her, they can play or watch a video in a kids area while she shops.

Iowa-based Maytag Corp. has helped independent owners across the country set up more than 40 of the try-before-you-buy stores, with plans to triple the number over the next two years.

Maytag definitely did their homework on this,” said Ron Dorf, a store owner in Minnetonka, Minn.

The company conducted surveys of appliance buyers to determine what they wanted in a shopping experience and what bothered them.

“In every other category you can experience it before you put it in your house — your car, TV, stereo,” Dorf said. “How come appliances are such a mystery?”

Dorf opened his suburban Minneapolis store the day after Christmas last year and said he’s found customers — mostly women — impressed with the option of hearing and seeing an appliance work.

Clothes washers and dishwashers are tested most often.

“These are two appliances that have water involved and people are very sensitive about the noise performance of it and its washing capability,” Dorf said.

Akshay Rao, chairman of the marketing department at the University of Minnesota’s Carlton School of Management, said with the concept, Maytag is helping to reassure its customers that the appliance they’re going to buy is good quality.

“If my product was really bad, I would be a fool to provide you with that opportunity. So, it must be a good product,” he said. “Whether or not people come in to check it out, it serves the purpose of convincing a suspicious marketplace that the product is, in fact, good.”

Lynette Morgan, of Seattle, said she shopped at a new Maytag Store after hearing a commercial at the radio station where she works as an afternoon announcer.

“I was thrilled to be able to try out their biggest and most roomy washer and dryer,” she said. “I threw the laundry in, and looked around at other appliances while waiting.”

She wanted to test the appliances to see if they would wash the sleeping bags for her family, who enjoy camping.

Her new Neptune washer and dryer handle them easily, she said.

She also liked the store’s kids area.

“It’s great. They were distracted with all the videos and play table. I was able to still walk around the store and keep and eye on them,” she said.

Maytag plans to open another 60 stores by the end of this year and another 30 to 40 next year, said Rian Cain, head of business development.

The new stores are targeted toward urban women.

Because women typically make the decision about appliance purchases, Maytag found that stores with a child-friendly environment and sales people that were accessible but not hovering could make customers more welcome.

Marketing studies found women wanted clean, small stores, with the opportunity to try and compare appliances.

The first test site opened in 1998 in Des Moines and lessons learned there were then tested before focus groups in Los Angeles, Phoenix and Atlanta.

Exit surveys found 84 percent of the customers were satisfied or completely satisfied with their shopping experience, Cain said.

More importantly to owners like Dorf, customers frequently leave the store with a new appliance.

“Our close rate — that is how many customers actually purchase that walk through the door — is running upwards of 70 percent,” he said.

The stores sell most of Maytag‘s major appliance brands, including Hoover floor care products and Maytag, Amana and Jenn-Air appliances.

Maytag, a company that relies on its reputation for reliability and quality, has traditionally focused a large share of its sales on higher-end buyers.

The company’s premium Neptune clothes drying center, for example, typically sells for more than $1,000. Newer style washing machines can cost around $900. Those prices compare with traditional style washers and dryers priced closer to $500.

The company is working feverishly to lower production costs and better compete with increasing numbers of appliances made in low-cost foreign labor markets such as Mexico.

The new stores are part of a strategy to raise consumer awareness of the Maytag brand in the markets where stores are opened.

“We want to create an umbrella in all of these markets that makes it very conducive to hear the story about Maytag, Amana and Jenn-Air,” Cain said. “So, wherever they buy, Maytag becomes a much greater part of their consideration set — because of the Maytag store in the market.”