Archive for September, 2004

Maytag Community Innovation awards available locally

September 30, 2004
Maytag Community Innovation awards available locally
Date September 30, 2004
Section(s) Local News
Application forms are now available from the Maytag Corporation Foundation for the 2004 Community Innovation Awards.

In the United States, each of the 11 communities where Maytag has major U.S. operating facilities, employee committees have funds available from the foundation to award grants, generally in the $500 to $2,500 range, to non-profit charitable or educational organizations.

Locally, programs in Jasper County that address issues or problems in the following categories are eligible: families, youth (including teens and preschool), emergency services, community betterment (include recreational and cultural programs), education and program addressing issues of the elderly, persons with disabilities and health-related programming.

Awards will be made only for innovative programs, those that are creative, new, enhanced or expanded. Awards will not be granted for general operating budgets.

Interested non-profit organizations should contact Lou Ann Hill by phone at 787-6357 or by e-mail at to receive an application. The deadline to submit grant proposals to the Community Innovation Awards Committee is Oct. 18. Grant awards will be announced by the end of the year.

The Maytag Corporation Foundation is the primary source of charitable contributions made by Maytag Corp. The foundation’s support is focused primarily on education, family life, community betterment and employee involvement.


Maytag reaches contract with union workers at Amana plant

September 27, 2004
Maytag reaches contract with union workers at Amana plant
Date September 27, 2004
Section(s) Local News

Associated Press Writer

Workers at the Amana Refrigeration plant in eastern Iowa ratified a new three-year contract Saturday, union officials said.

A tentative contract agreement between Maytag Corp. and the International Association of Machinists and Aerospace Workers Local 1526 was announced just hours before workers met to vote.

“It passed overwhelmingly,” said Sue Wilson, a special representative for the union. “I think that committee did one heck of a job on this contract.”

She declined to release specifics but said it did offer pay increases.

The Middle Amana plant, one of the region’s largest employers, has about 2,250 union workers covered under the contract and about 400 salaried employees.

Contract talks began in August. The current contract was set to expire Sunday.

Maytag spokeswoman Lynne Dragomier declined to discuss specifics of the contract proposal.

“We are pleased to have reached this new labor agreement between the I.A.M. Local 1526 and Maytag,” said Mark Krivoruchka, Maytag senior vice president, human resources. “This agreement demonstrates a willingness on the part of both parties to address the critical issues impacting our business to allow us to become more customer-responsive and competitive in the marketplace.”

Maytag, which bought Amana in 2001, has been struggling to cut production costs as cheaper imports eat into the market share of domestic appliance manufacturers. At the same time, unions are fighting hard to maintain health insurance and retirement benefits.

Workers at the Amana plant went on strike for seven weeks in 2001 and eventually reached a three-year agreement that boosted pay about 10 percent but allowed the company to start new workers at lower pay.

Middle Amana residents had expressed in recent weeks concern about a shutdown of the 1.9 million-square-foot Amana plant.

Those concerns were raised as Maytag completes the shutdown of a refrigerator plant in Galesburg, Ill., where 1,600 jobs were lost. Production work was transferred to Amana and to a new factory in Mexico.

A 27-day strike at Maytag‘s laundry products plant in Newton idled 1,525 workers represented by the United Auto Workers in June.

The resulting four-year contract required workers to pay more for health care and reduced retirement benefits for future workers.

The concessions will save Maytag about $13 million a year, CEO Ralph Hake told analysts in a July 23 conference call.

Newton does have the best work force

September 27, 2004
Newton does have the best work force
Date September 27, 2004
Section(s) Opinion
To the Editor:

I could not believe the words in front of me as I read about Mr. Krivoruchka’s speech in Sept. 22nd’s paper…

Mr. Krivoruchka got one word wrong in his description of our perception of Maytag. Maytag is a 1,000 pound gorilla and (not or) it is the home of the best production work force in the world. They haven’t seemed to really recognize that yet.

I will let people more informed than me respond to the specific economic assertions in the article, but I do know this. Newton employees have earned every penny and every benefit they have received over the years and still made a profit for Maytag. They will have to hire two to three workers elsewhere to replace one worker in Newton. The people of this community have done more than their share …

As I’ve written before, I worked at Maytag, but I am not a “Maytager.” In fact, I am more proud to say I am a UAW member who worked at Maytag. I feel deeply for the men and women still working in the plants. They have to be the ultimate judge of their relationship with this company …

Mark Babcock


How can Maytag and Newton work together?

September 27, 2004
How can Maytag and Newton work together?
Date September 27, 2004
Section(s) Opinion
To the Editor:

In our Newton Daily News of Wednesday, Sept. 22, 2004, I read Maytag company seeks a partnership with local community

I do sincerely hope to see those words stated by a Maytag representative Mark Krivoruchka become a reality. I quote Mr. Krivoruchka “We need to find ways to work together.” I also repeat my being in agreement with Mr. Hake’s words in the Sunday, Aug, 29, Des Moines Register, “Amazing things can happen if people get on the same side and work together to solve problems.”

Maytag has been and is a great company, full of hard working people… Maytag is not only an icon of Newton, but a very important part of the community in many ways …

I know we cannot all eat steak, however I know society should have compassion for the human race …

In my struggle to understand what is happening in this great country of ours, I find we are becoming owned by other nations. With this happening we the little folks are, I am afraid, picking up the taxes that would have been paid by tariffs and/or American owned companies. Many companies are no longer American owned. Today a product may be built in the United States, however if it is not American owned that means less tax dollars are paid to the IRS and state. So … we make up the shortage of the tax dollars …

I give the Chrysler merger as an example that did what seemed to be a 50/50 merge. However according to what I read, this became 25 percent American owned and Germany owns the rest. Remember the tax and who makes up the difference?

OK! My questions are: How can we the (workers and community) work together with Maytag to ensure Newton’s future, or as some have said, do we need Maytag at all? Finally should we not all write a few congressmen and other political leaders about our concerns? And please, will someone tell me how gambling and race tracks are constructive to the life and times of Newton?

Just one more comment. If the federal, state, local city or county government invents a job, who pays the salary? So if nothing is being manufactured, should we not see a benefit to the community? Now if we depend on gambling and/or others to make playtime activities, please tell me how can that can be constructive to the economy? I’m not saying we do not need those jobs and playtime. However, it seems to me if there is not at least a few tangible products produced it is a fairy tale!

Of course Walt Disney did well.

James Wilson McKinstry


Layoffs hit Newton, contract unsettled at Amana, Maytag stock takes hit

September 24, 2004
Layoffs hit Newton, contract unsettled at Amana; Maytag stock takes hit
Date September 24, 2004
Section(s) Local News

NDN Staff Writer

Layoffs for 193 positions at Maytag Plant 2 were taking place today as Maytag decreased production levels in Newton.

Company spokesperson Lynne Dragomier said the cut in the number of employees was in response to a decrease in demand for the products manufactured here.

While the layoffs were occurring in Newton, contract negotiations for the workers at Maytag‘s Amana refrigeration plant continued.

“There is nothing to report at this time,” Dragomier said. “Obviously because we’re in negotiations, I’m not able to comment on them specifically.”

The Amana contract, covering nearly 2,300 workers at Maytag‘s Amana facility, expires at 12:01 a.m. Sunday, she said. The negotiations come on the heels of the closure of Maytag‘s Galesburg, Ill., refrigeration plant last week. Maytag officials have said some of the 1,600 jobs lost at that plant would move to Amana, with other jobs moving to a new facility in Reynosa, Mexico.

Amid the layoffs and contract negotiations, Maytag stock hit a new 52-week low Thursday, falling to $18.38 before rebounding to finish the day at $18.54 a share. Maytag stock has had a tough week, already falling about $1.50 from Monday’s opening price of $20.03. In early morning trading, the stock had dropped another 28 cents to $18.26.

Thursday’s drop came after rival Electrolux sent word earlier in the day that steep steel prices would eat into second-half profits. On that news, Electrolux fell in trading yesterday $.66 to $35.54. Other appliance makers’ stocks took hits as well with Maytag rival Whirlpool falling $1.23 from Wednesday’s close of $63.03 to $61.80 by Thursday’s close.

“The steel cost issue that Electrolux identified is an issue that we have been discussing,” Dragomier said. “We’ve been discussing it for some time. Specifically, most recently in our second quarter results, the steel cost issue was discussed. This isn’t a new issue.”

Maytag looks to form partnership with Newton community

September 22, 2004
Maytag looks to form partnership with Newton community
Date September 22, 2004
Section(s) Local News


When Fred Maytag built his washing machine company in Newton more than 100 years ago, he was a father-figure to the community. And he fostered his paternalistic role by building parks, recreation facilities and assisting in local government developments. His success was Newton’s success as he took care of his Maytag and Newton family.

Fast forward 100 years. While the heritage and legacy Fred Maytag developed remain, the business factors the company now faces are as different as the wringer washers that drove the company’s success.

Mark Krivoruchka, senior vice president, human resources, at Maytag Corporation expounded on some of the challenges facing Maytag in a speech sponsored by the Newton Development Corporation on Tuesday.

The former GE and Pillsbury executive, who has been with Newton for more than two years, said there are factual and emotional descriptions ascribed to Maytag‘s place in the community, though the perceptions are only a part of a picture many might not see.

First, he said, is the fact of Maytag‘s 100-year history in Newton, its laundry manufacturing plant, one of the largest in the world, and the corporate headquarters facility near downtown Newton, one of only three Fortune 500 companies in the nation sitting in a town of roughly 15,000 people.

Emotional elements also drive the company’s perception. Depending upon where one sits, Maytag is viewed as either a 1,000-pound gorilla extracting a price from its workers through its greedy grab for more profits or home to the best production work force in the world, Krivoruchka told the 40 community members attending the luncheon discussion.

There’s more to the story, he told the group.

While most think of Maytag at either end of its spectrum — from the production workers producing washers and dryers at Maytag Plant 2 to the corporate headquarters building — there are many other facets to Maytag‘s involvement in Newton.

Newton, Krivoruchka said, is home to one of three Maytag call centers — which handle 5,000 calls a day; headquarters for Maytag Business Services — responsible for directing the work of 2,000 appliance technicians across the country; the location for Maytag‘s laundry engineering center; headquarters for sales and marketing operations; the center for the corporation’s logistics, directing shipments from nine national warehouses, including one located here; and the location for its information technology center.

“There are a lot of people who work in the middle,” Krivoruchka said. “There is a lot located here that is not part of corporate office and the plant. That’s a big plus for the Newton community.”

Krivoruchka also addressed the corporation’s One Company reorganization announced in June aimed at saving the company $150 million annually when fully initiated.

While most focused on the loss of 1,100 salaried work force jobs, the reorganization is designed to improve Maytag‘s ability to participate effectively in the appliance manufacturing market and eventually make for a stronger company.

By combining the operations of Hoover, Maytag Appliances and Maytag Corporate into one business unit, Krivoruchka said the new dynamic will create speed and responsiveness to business conditions.

Under the old alignment, the senior vice president said, Maytag had as many as 10 layers of management oversight from top to bottom. The goal now is to bring that down to five layers, he said.

“That drives the level of responsiveness,” he said.

Krivoruchka also noted the span of control some Maytag managers had in the past. For as many as 65 percent of Maytag managers, the past figures showed them with oversight responsibility for as few as one to three people.

“We want to stretch that,” he said. “By doing so, we empower people and allow people to grow.”

The human resources VP also noted Newton’s hourly to salaried worker statistics that the company hopes to change. Currently, there are 11 hourly employees in Newton for each salaried employee. At Amana, that figure is 23 to 1. The standard to which they want to meet stands at 30 to 1.

HEALTH CARE COSTS are another big issue facing Maytag today. As a self-insured corporation, Krivoruchka said the company stands to spend as much as $150 million on health care costs for its employees and retirees this year, up 10 percent from last year’s costs.

Those costs were a big part of the recently negotiated union contract. After a nearly month-long strike, the local membership ratified a new four-year agreement where workers will pay a portion of their health insurance. Overall, the company said the new Newton union contract will save the company approximately $13 million, although the costs of operation locally continue to make the plant exempt for new product platforms based on the corporation’s safety, quality, delivery and cost matrixes for investment.

“We look at it as a shared responsibility,” Krivoruchka said. “There will be deductibles and copays.”

Maytag salaried workers are all part of the “Maytag Model” health care plan — an 80/20 shared cost.

Krivoruchka also noted the impact of safety issues on Maytag‘s cost of doing business.

“We take seriously our ability to provide a safe place to work,” he said. “Overall, Maytag‘s safety record is very good.”

The human resources director, however, noted that the hourly worker’s compensation costs in Newton are much higher compared to other production facilities. In Cleveland, Tenn., the hourly cost of covering worker’s compensation claims is 8 cents an hour. In Newton it stands at 64 cents, down from $1 two years ago.

“The challenge in Newton is getting those costs under control,” Krivoruchka said. “Newton is still the highest cost facility. They are making progress.”

Maytag also faces numerous business challenges. With the influx of Asian manufacturers into the appliance market, analysts expect continued downward pressures on pricing, Krivoruchka said.

As examples, he noted that a Maytag washing machine produced in 1974 pulled a $499 price tag while a model today, even with more features, draws only $439. The same is true in refrigeration, he noted. A side-by-side cost $1,600 in 1990 but only goes for about $1,000 today.

With these business realities in mind, Krivoruchka asked that a two-way street dialogue be opened in the community.

“Our business challenges are not going to go away,” he said. “We have to reduce our fixed cost base. We want to look back at the community and ask for support of our business challenges and understand what we’re going through.”

On the other side, he said, Maytag needs to understand how it can be a better partner in the community. While it has a long tradition of community involvement — everything from assistance with the new Maytag pool, the development of a day care center to developing a local community college in a former plant building — its days as a paternalistic protector needs to move toward an asset partner with the community.

“We need to find ways to work together,” he said.

Maytag layoffs now top 190

September 21, 2004
Maytag layoffs now top 190
Date September 21, 2004
Section(s) Local News
NEWTON (AP) — About 193 workers at Maytag Corp.’s laundry factory are getting layoff notices, the result of lower demand for certain machines made at the company’s central Iowa factory.

The company acknowledged layoffs last week but declined to release a number saying it was dependent on scheduling issues.

United Auto Workers Local 997 President Pat Teed confirmed the number Monday.

The Newton factory makes several models of washers and dryers including the Neptune and Atlantis.

Maytag spokeswoman Lynne Dragomier said it’s a routine adjustment affected by customer orders for certain models. She couldn’t be specific about which models are impacted, she said.

“It’s a production schedule adjustment. We do periodically adjust the schedules up and down. Obviously, the employees do have recall rights,” she said.

The job cuts are the first since a contract agreement was reached with the UAW Local 997 in July, ending a 27-day strike.

Newton-based Maytag negotiated a new package of retirement and health care benefits that Chief Executive Officer Ralph Hake said would save the plant about $13 million a year.

He has also said production at Newton continues to cost more than at other locations and further reductions will be needed for the plant to be eligible to make new products.

Lawyer’s win big

September 17, 2004
Lawyer’s win big
Date September 17, 2004
Section(s) Columnists
By Peter Hussmann


Let’s start with money — $8.25 million to be exact.

That’s how much the three law firms — in Philadelphia, St. Louis and San Francisco — stand to split amongst themselves as counsel in the proposed settlement agreement recently announced by Maytag in the class action lawsuit filed on behalf of early generation Neptune washing machine owners.

The suit claimed that design flaws in the first models produced at the Newton facility resulted in the growth of excessive mold and mildew inside the machines, as well as wax motor and circuit board failures that left the washers inoperable. Though Maytag denies the claim — and says it attempted to fix all the problems brought to their attention by early Neptune owners — the corporation said it decided the best course of action was to agree to the proposed settlement that allows affected owners the opportunity to recoup any costs incurred to fix or replace their machines. In addition, the corporate spokesperson noted the design problem was rectified in early 2000 and does not impact the current machines being produced, even though they’ve allowed any Neptune purchaser to August 2004 to be a part of the class by notifying them of their rights under the terms of the settlement.

But let’s get back to the lawyers and the potential award they’ll receive should an Illinois court allow the settlement to go forward at a hearing set for late November. Many people say that they are nothing but opportunists using a skewed legal system that let’s them make a ton of money off corporations.

While the Neptune owner who might have experienced the problem might get their couple hundred dollar repair bill returned — should they have retained all the proper repair documentation — the lawyers will be investing their earnings in a new boat. And we’re not talking about a bass boat here. (There were several Web sites set up by the law firms involved in the class action suit asking Neptune owners who had experienced problems to log on to their sites and report the problems experienced.)

But let’s look at the other side.

The Neptune, when it was first introduced, drew a $1,000 price tag, no small amount. Consumers plop down such amounts because they deem it to be a superior machine, one that will provide superior service. When it prematurely fails, it makes owners mad, especially if your new silk blouse now reeks of mold.

While Maytag says it tried to rectify the situations owners experienced, many apparently weren’t satisfied. Internet consumer chat boards have been full of gripes about the Neptune for some time. Most were not happy campers. So they did the American thing: They sued.

But who can blame them? They should have. A Cadillac-priced machine is supposed to work as advertised.

It’s a good thing Maytag is standing up, taking the heat and putting its money where its mouth is concerning its dependability reputation. Nip it in the bud before things spin (or don’t) out of control.

It will be interesting to see what the court does with the lawyer fee proposal at the settlement hearing. Will members of the class complain about the proposed fee agreement? Stay tuned.

Galesburg Maytag plant shuts down

September 17, 2004
Galesburg Maytag plant shuts down
Date September 17, 2004
Section(s) Local News

Associated Press Writer

GALESBURG, Ill. — Bobbi Neice has counted down the days to unemployment for nearly two years but says the early warning didn’t make it any easier when Maytag shut down its last assembly line in this western Illinois city.

Neice and nearly 900 other workers walked out of the Galesburg plant for the last time this week, some hauling bargain-priced refrigerators or work benches and others clutching only years of memories.

“It was hard. It was happy but sad at the same time. It’s been a long two years. Very long,” said Neice, 33, who worked at the plant for more than eight years. Her last day was Thursday, the plant’s final day of production.

The shutdown ended more than a half-century of refrigerator production at the sprawling plant, which has become a symbol of America’s job losses to foreign factories since Maytag announced in late 2002 that it would move Galesburg’s jobs to plants in Mexico and Iowa.

Workers driving out the gates for the last time said they appreciated the national attention, including a mention during U.S. Senate candidate Barack Obama’s keynote address at the Democratic National Convention.

But many remained bitter over losing jobs they thought would stretch to retirement.

“I think 90 percent of the people here thought that. They thought ‘This is Maytag. They aren’t going anywhere,”‘ said Kevin Bowman, 47, who spent 26 years at the plant where his dad retired after 40 years.

Steve Raymond was also a second-generation worker at Maytag and sadly recalled finding his 61-year-old father dead of a heart attack on the plant floor nearly three years ago.

“This was my father’s life for 35 years, and this is how they pay him back. They’re destroying his children’s lives and the community,” said Raymond, 41, who worked at the plant for six years.

As they left the plant behind, workers wondered what’s ahead for Galesburg, which will lose about 300 more jobs by the middle of next year when a plant that makes pre-engineered metal buildings closes.

The city is developing a business park that it hopes will attract small manufacturers and distribution companies. In the meantime, the highest-paying jobs are about an hour away in Peoria or the Quad Cities.

Workers blamed corporate greed for their limited job options, along with federal trade policies that they say are sending high-paying U.S. factory work to Mexico, China and other foreign nations.

“I hope this will get people to stand up on their back legs and get the government back in shape,” said Charles Nott, a security guard at the plant for 13 years.

Workers said there was a mix of emotions as assembly lines began shutting down Tuesday, from tears and hugs to whoops of joy that the nearly two-year countdown was finally over.

“When you work with people a long time, it’s hard to say goodbye. You spend more time with these people than you do your family,” said Mary Shaw, who was retiring after 30 years at the plant.

Only about 400 production workers remained Thursday at a plant that that was Galesburg’s largest employer two years ago, with 1,600 employees. About 100 workers will stay through the end of the year to shut the plant down.

Workers signed the last refrigerators off the line, and they’ll ultimately wind up in union training centers as a tribute to the Galesburg plant and its workers, said Dave Bevard, president of the International Association of Machinists and Aerospace Workers Local 2063 at the plant.

“It’s nice to know that there’s going to be something to remind people of what these workers did,” Bevard said.

Maytag spokesman Lynne Dragomier said the plant’s workers were professional to the end and that the factory’s waning days have been “emotional but proud.”

A slow stream of trucks moved in and out the plant’s half-empty parking lot Thursday to pick up work benches, break tables and vending-area refrigerators that workers bought in bargain bidding.

Thomas Medina paid $40 for a break table that will find a spot in his garage while he tries to find a new career. After eight years at the plant, the 41-year-old thinks he might go to a community college to study heating and air conditioning.

He said workers are nearly evenly split between landing new jobs, heading to college, retiring or starting an uncertain job search.

David Sivert, 28, worked at the factory for eight years and hopes he doesn’t land in another one when he finds his next job.

“But if I have to, I will,” Sivert said. “I’ll do anything.”

Maytag will lower production levels at Newton plant

September 14, 2004
Maytag will lower production levels at Newton plant, workers to be laid off
Date September 14, 2004
Section(s) Local News


Production levels at Maytag‘s washer and dryer plant in Newton will go down later this month resulting in employee layoffs.

Postings of the layoffs at Maytag Plant 2 were made last week, according to Maytag spokesperson Lynne Dragomier.

Dragomier would not state the exact number of employees to be impacted by the production declines. She said the changes to employment levels at the plant are in response to demand for the products manufactured in Newton.

Union officials said the exact number of employees to be laid off is still being determined but said as many as 170 positions could be affected.

In early July, Maytag and the UAW Local 997 reached an agreement on a new four-year labor pact following nearly a month-long strike. Company officials said the new contract helped bring down the cost of operations at the Newton plant but said it still was not enough to make the Newton facility eligible for any new production lines.

“Future investment is predicated on four areas — safety, quality, delivery and cost,” Dragomier said after the labor contract was ratified. “We continue to assess all plants against these measurements. As investment decisions come up in the future, we will continue to assess those areas. While good progress was made at the Newton laundry plant, it is still Maytag‘s highest cost facility.”