Archive for January, 2005

Hake: Maytag will ‘migrate products’

January 28, 2005
Hake: Maytag will ‘migrate products’
Date January 28, 2005
Section(s) Local News

NDN Editor

Continued reductions in staffing levels at Maytag production facilities in Newton may lie ahead as Maytag continues to target “factory utilization” as a cost saving measure in the coming year, Maytag CEO Ralph Hake said following release of the corporation’s fourth quarter results today.

Speaking in a conference call with business reporters, Hake said the corporation will “migrate” product platforms to its most cost-effective production operations throughout the coming year.

“We will migrate products to our more cost-effective factories,” he said. “Work forces in those facilities will grow while work forces will continue to shrink (in the least cost effective operations). This puts us in a better cost position with the intense competition. You will see more of that in 2005.”

Although not expressly naming the local laundry facility operation, Hake has said in the past that “Newton is our highest cost facility.”

Labor negotiations last year resulted in a new four-year agreement. However, Maytag said the cost savings generated under the new contract still did not make the plant eligible for new product platforms.

Maytag Corp. reported a fourth quarter loss of $14.1 million or 18 cents a share including the costs of a company restructuring and litigation over a front-load washing machine.

The Newton-based appliance manufacturer’s results compared to a profit of $23.9 million or 30 cents a share a year ago.

The quarter included charges of 12 cents per share for the company-wide reorganization and 13 cents per share to set aside money related to the early generation front-load washer litigation. A charge of 1 cent per share was reported for the closing of a refrigerator plant in Galesburg, Ill.

Results would have been about 8 cents a share excluding the charges. Analysts surveyed by Thomson First Call expected fourth quarter earnings of 17 cents a share.

Sales for the quarter were down 8.4 percent to $1.16 billion, compared to $1.27 billion for the same period last year.

Hake said lower sales in Hoover floor care equipment and vending machines and higher steel costs also contributed to the loss.

“Higher raw material and energy costs significantly impact our operating results for the quarter and the year,” Hake said, in a statement. “We have addressed our challenges head on, and have taken decisive steps to improve Maytag‘s performance going forward.”

For the full year 2004, the company reported a loss of $9 million or 11 cents per share, compared to income of $120.1 million, or $1.53 per share in 2003.

Excluding charges year-end earnings would have been about 88 cents a share. Analysts’ expectation was for a profit of 97 cents.

Sales were $4.72 billion, down 1.5 percent from $4.79 billion in 2003. Operating income was $40.3 million for 2004 versus $228.3 million for the prior year.

Hake also lowered the company earnings guidance for 2005, saying the company expects reported earnings per share of $1.10 to $1.50 in 2005 including about 5 cents for restructuring charges. Previous guidance was between $1.50 and $1.60 including the restructuring charge.

Hake said he expected 2005 to be a better year.

“It’s not business as usual for Maytag,” he said. “We’re a leaner organization that’s becoming more responsive on all levels. We expect to benefit in the coming year from our ‘One Company’ cost reductions and our stream of innovative products, including the new Maytag 27-inch washer and dryer, Jenn-Air suite of reflective glass appliances, the FloorMate hard floor cleaner and a premium upright introduction, among others. As we work through the first quarter, we also expect to benefit from favorable pricing initiatives, which were announced late last year.”

At 10:30 a.m. today, Maytag‘s stock was down $1.63 to $15.42, a 9.56 percent drop. Trading was heavy with more than 4 million shares traded.

Associated Press writer David Pitt contributed to this story.


Iowa buys Maytag’s attention for now

January 27, 2005

Iowa buys Maytag’s attention, for now
Date January 27, 2005
Section(s) Opinion
What does Amana have over Galesburg? Not enough old world, family dining halls in Galesburg? No PGA caliber golf courses?

Whatever it is, Maytag Corp. seemed eager to add 200 new jobs and retain 550 more at their Amana refrigerator plant in return for government incentives that are nowhere near the windfall lavished upon the company a decade ago by Galesburg.

Iowa promises $1.5 million in tax credits and Economic Development Director Mike Blouin heralded the deal as a blow against global outsourcing.

Uh huh.

It may look that way from Des Moines. But in the Quad-Cities, 43 miles north of Galesburg, that $1.5 million seems less than quaint.

Maytag took that, plus $6 million more in state of Illinois grants that looked every bit like a blow against global outsourcing in 1992. Then Maytag took another $4 million in local tax breaks. And $3 million cash incentives paid for by hiking sales taxes on the Galesburg residents who are still paying even after Maytag shuttered its plant last year.

That’s $13 million in incentives for about 10 years of jobs. Galesburg made refrigerators. The Amana plant makes refrigerators.

The Amana expansion involves value-added, high-tech jobs, re-engineering refrigerators so that better products can be made more cheaply. “This product will help improve Maytag‘s competitiveness in the refrigerator market,” company representative Karen Lynn said.

The company sang a similar tune a decade ago in Galesburg: “Maytag decided to redesign not only the product but also the manufacturing process from the ground up,” Managing Automation wrote about the Galesburg innovations back then.

If $13 million in taxpayer incentives buys jobs for a decade, how much can Iowa expect for $1.5 million?

Quad City Times

Contact the Quad-City Times Editorial Board at

We need to expand our business base

January 27, 2005
We need to expand our business base
Date January 27, 2005
Section(s) Opinion
To the Editor:

To the Newton City Council, I agree with your tough decisions recently and you are going to make some people mad, but you also need to look at your position in the future if you can promote other facilities to build here. Please do all in your power to help and look at the big picture in the future.

I believe we wouldn’t have all these budget cuts; more corporate taxes would be paid. Like in past years, we had Saturn, 3M, Barella, all three major industry providers wanting to build here. That would have created more work force locally and more local revenue. But being so Maytag-whipped, our city council voted not to make things possible to accept them.

I believe these hardships have come from bad decisions in the past from all aspects of the community not being more inclined to opening our doors to new industry and welcoming change.

Peter J. Swank


Maytag shakes up senior sales force

January 26, 2005
Maytag shakes up senior sales force
Date January 26, 2005
Section(s) Local News
Maytag Corp. today announced that Paul J. Bognar will assume a new role as senior vice president, sales, effective Feb. 1.

Bognar, currently vice president and general manager, Canada, for Maytag International, will replace Christopher D. Wignall, who will assume a new role working on special projects focused on Maytag‘s growth initiatives. Both will report directly to Ralph F. Hake, Maytag chairman and CEO.

In his new assignment, Bognar will be responsible for leading Maytag‘s field sales organization in developing and executing strategies to achieve profitable sales growth through the organization’s various customer channels.

“Paul is a very talented member of our senior leadership team, and I am very pleased to announce his new appointment,” Hake said. “Paul’s demonstrated leadership in his current role with Maytag International, as well as his tremendous customer-focused discipline, will provide our sales organization with new energy and urgency for driving business results.”

Bognar, 45, joined Maytag in 2002 as general manager, Canada, for Maytag International. He was named vice president and general manager in 2004. He brings more than 20 years of sales and general management experiences to his new assignment with Maytag, including previous positions at Whirlpool, Panasonic and Kohler.

Wignall, 44, began his career with Admiral in 1983 and served in various executive positions with Maytag Corporation and Maytag Appliances, prior to becoming senior vice president, sales and marketing for Maytag Appliances in 2003. He was named senior vice president, sales, in 2004.

Maytag repairman in Kellogg ad spot

January 25, 2005
Maytag repairmen in Kellogg ad spot
Date January 25, 2005
Section(s) Business
Kellogg Company unveiled a new television spot in its Cheez-It “Get Your Own Box” campaign featuring the Maytag men. The new spot will air on national network and cable through the spring of 2005.

“We were thrilled to have the chance to tap the Maytag men for our ‘Get Your Own Box’ campaign,” said Jenny Enochson, senior director marketing communications, Kellogg Company. “What better way to demonstrate the lengths to which people will go for a box of Cheez-Its than with these two much-loved and instantly recognizable characters.”

The spot, called “Maytag Men,” opens in the repair shop where the Maytag Repairman is enjoying his box of Cheez-Its while waiting to answer the phone that never rings. When his phone unexpectedly rings, the distraught caller says her washer is leaking and she needs him to come repair it immediately. Ol’ Lonely, realizing his partner, the Apprentice, is behind the female voice, asks the caller if the water level is over her head yet. When she says no, he tells her to be sure to hold her breath when it is. He then hangs up and calls out to the Apprentice, who has been hiding behind a door with a cell phone, and says “Nice try, rookie!” The voiceover says, “Cheez-It. Get your own box.”

“This ad offers a rare window into the everyday life of the Maytag men, playing on their individual characteristics,” said Rachel Kelley, Maytag brand manager. “We can just imagine Ol’ Lonely — a long-standing symbol of dependability — taking his time to enjoy his own box of Cheez-Its since his phone never rings. It’s also fitting that his partner, the innovative, restless Apprentice, would try to outwit Ol’ Lonely out of his Cheez-Its.”

Maytag to add 200 jobs at Amana plant

January 21, 2005
Maytag to add 200 jobs at Amana plant
Date January 21, 2005
Section(s) Local News
Special to the Daily News

The Maytag Corporation announced Thursday that it plans to add 200 new jobs at its Amana refrigeration plant. The company said it chose to launch the refrigerator product over foreign suppliers and company plants elsewhere in the United States and Mexico, although it declined further comment.

Michael Blouin, Iowa Department of Economic Development, said the company qualifies for a $1.5 million tax credit through the state’s New Jobs and Income program, which offers such state financial incentives to companies that promise major expansions.

Blouin said the company plans to hire 200 more workers once the Amana facility is expanded. The new workers will receive a reduced wage compared to current employees. The new hires will receive an average of $12.33 per hour, $3 per hour less on average than the plant’s other employees.

Blouin said Amana’s union, the International Association of Machinists and Aerospace Workers, have agreed to the lower paychecks.

The deal secures the jobs of about 360 workers, as Maytag did consider moving production to Mexico. Company officials have signed a five-year contract with the state, pledging the facility won’t be closed down or moved during that time period.

Blouin said it’s a signal Amana is in Iowa for at least the foreseeable future. He also noted that he and other state officials were in discussions with the company for about six months before the deal came together.

“Anytime you can get Amana or any other member of the appliance industry to commit to a new product line in Iowa, you have to be very, very happy about it,” he said.

Company officials and Blouin, however, are secretive about just what that new Amana product will be.

“The product itself is top-secret,” Blouin said.

People are worried

January 20, 2005
People are worried
Date January 20, 2005
Section(s) Opinion
To the Editor:

I think that we would be better off if we got rid of some of the top end people in the city. If we had just the city council and not all the highly paid administrators and directors and advisors maybe we would be better off.

I can’t see where all this advice that we are paying so highly for has brought any new large employers into town. In fact it hasn’t been able to keep our long time home bred employer (Maytag) to stay here. Maybe we wouldn’t be having grandiose ideas like the race track shoved at us when a good share of us taxpayers feel that it is not going to be successful, even if it does get built.

There have been so many unanswered questions about the race track, we as taxpayers are worried. Are we going to be stuck with a big bill when our biggest employer is trying to move out of town?

Let us scale back our thinking into a more sensible realm and maybe life would be less stressful here in Newton.

Mick Drew


Maytag honored by AMVETS for hiring veterans

January 19, 2005
Maytag honored by AMVETS for hiring veterans
Date January 19, 2005
Section(s) Business
Special to the Daily News

Maytag Corporation has been honored with a Certificate of Merit for Outstanding Support of America’s Veterans by AMVETS, a 60-year-old national veterans’ organization, for its aggressive recruitment of discharged American military soldiers for positions as repair technicians under its expanding Maytag Services organization.

AMVETS National Commander William Boettcher formally presented the organization with the honor at Maytag Headquarters in Newton on Friday, which included a brief meeting with Ralph Hake, Maytag Chairman and CEO.

Other members of the AMVETS visiting Maytag during the presentation included Edward Kemp, national first vice commander and a member of Iowa Post 49 (Cedar Falls) and Joe Hays, AMVETS national executive committee member and a member of Iowa Post 2 (Des Moines).

Art Learmonth, president, Maytag Services, accepted the honor on behalf of Maytag as Commander Boettcher read its inscription:

“Through its progressive program of recruiting, hiring and training veterans as repair technicians, Maytag Corporation has demonstrated an exceptional commitment to those who have served our nation. Its initiatives in this area reflect the company’s keen desire to provide, not only employment opportunities for veterans, but also a work climate wherein the skills they learned in the service can be utilized to their maximum. Such practices are a credit to the company, its management and employees, and represent a standard of support worthy of imitation throughout America’s manufacturing sector.”

Boswell hopes to work with maytag to ensure presence in Newton

January 19, 2005
Boswell hopes to work with Maytag to ensure its presence in Newton
Date January 19, 2005
Section(s) Local News


About two dozen local business and government officials met over lunch with Congressman Leonard Boswell on Tuesday to voice concerns and give input on what lawmakers might need to address to positively impact the local community.

Not surprisingly, the first issue broached was what Congress might be able to do to stem the tide of outsourcing production and manufacturing operations, an issue that hits close to home as Maytag comes under even greater pressure from its larger appliance manufacturing rivals that have moved hundreds of thousands of jobs overseas.

“I don’t have an answer, but I know we can’t ignore it,” the Des Moines Democrat and former Iowa lawmaker told the group. “I believe that if we lose manufacturing it’s hard to restore it.”

Boswell said he has been trying to organize a meeting between his office, state officials and Maytag representatives to see what might be done to assist company. Scheduling conflicts and the holiday season have hampered efforts to put the meeting together. A Maytag representative attending the meeting said the gathering will occur sometime in the near future.

Boswell said he hoped Maytag will remain a strong component of the local economy for years to come.

Maytag‘s roots are here, their history is here and their success has been here,” he said. “I believe that given a chance and the opportunity, they will keep it here.”

Boswell also addressed the economic opportunities Iowa has at promoting the growth of industries that use Iowa produced products, such as soy diesel and ethanol products.

“We are in bondage to OPEC,” he said. “Anything we can do to get away from that reliance and move toward things we produce is a good thing.”

Skiff Medical Center Administrator Eric Lothe addressed the Medicare reimbursement disparities that exist between Iowa and other states in the nation. However, one program available under Medicare allows for the establishment of Critical Access Hospitals that stabilize funding streams to rural facilities by allowing for cost-based reimbursements. For Skiff, the funding method would mean an additional $3 million in annual revenue.

Lothe said that more than 60 small hospitals across the state have taken advantage of the program.

However, the Newton hospital is not eligible because the program caps the number of beds a facility may license at 25. He asked Boswell to consider raising the cap to somewhere between 35 and 50, a move that would allow Newton to consider seeking the designation.

Beer, Briatico set to leave Maytag posts

January 19, 2005
Beer, Briatico set to leave Maytag posts
Date January 19, 2005
Section(s) Local News


Two former Maytag appliance division presidents have signed separation agreements with the Newton-based corporation, the final chapter in its six-month-long reorganization process.

Bill Beer, former president of Maytag Appliances, and Tom Briatico, former president of Hoover, will end their 30-plus year associations with Maytag effective Jan. 31.

Beer and Briatico were removed from the posts atop the two separate Maytag divisions when the “one company” reorganization was announced in June. At that time, Maytag said it planned to move both the Maytag Appliances, based in Newton, and Hoover operation, based in North Canton, Ohio, under the Maytag corporate roof in Newton. In addition, plans called for the elimination of 20 percent of the corporation’s salaried workforce nationwide, but with the majority of the 1,100 positions coming from the Newton and North Canton operations.

In announcing the leadership changes, Maytag spokesperson Karen Lynn said the “one company restructuring” has now been completed with the corporation meeting its restructuring goals.

In June, Maytag announced the integration of the Maytag Appliances and Hoover divisions under its corporate banner. The salaried position reductions and streamlined operations was expected to produce a $150 million annual cost savings, something Lynn said Maytag will see in the full year 2005.

“The restructuring will create enhanced value for our retail customers through one sales force and one marketing organization,” Maytag CEO Ralph Hake said at the time of the reorganization. “It will eliminate redundancies across the organization in areas including logistics and administrative functions and will also result in infrastructure cost savings. Maytag will be a much leaner organization, capable of better serving customers and more rapid decision making.”

At the time of the reorganization, Beer and Briatico were removed from a direct line of responsibility and their staffs eliminated. The two were placed in a new Office of the President as executive vice presidents. Their duties involved “substantial assignments” in giving “strategic guidance” to “ensure a smooth transition with the business,” Hake said. The office has now been eliminated.

“Our restructuring is now complete and both of these highly capable executives have decided to pursue the next phase of their lives,” Hake said in Tuesday’s prepared release. “I am grateful for their efforts and wish them well in their endeavors.”

Beer, 52, joined Maytag in 1974 as a market analyst and served in a number of marketing roles in Major Appliances. He was named director of corporate strategy in 1991 and then in 1993 vice president, marketing for Maytag and Admiral products. Beginning in 1996, Beer served as vice president, strategic marketing, responsible for all of the corporation’s major appliance brands. He was named senior vice president, product supply in 1997 and then took on the role of president of Maytag Appliances in 1998.

In August 2000, under the leadership of former CEO Lloyd Ward, Beer was assigned to a new role on corporate staff to support strategic projects. Shortly thereafter, he left the company, although he remained a consultant to Maytag, as well as other companies.

Ward left as Maytag‘s CEO three months later and Len Hadley was lured out of retirement to resume his former chief executive officer position. In January 2001, Hadley brought Beer back to Maytag as president of the corporation’s major appliance division, the job he previously held. Hadley cited Beer’s extensive experience in announcing his return to the corporation.

In a Securities and Exchange Commission report filed on Tuesday in connection with the elimination of the Office of the President, Maytag said Beer will conclude his 31-year career with the Newton-headquartered appliance manufacturer “to pursue personal and other professional opportunities.”

Under the terms of the separation agreement dated Jan. 14, Beer will receive a lump sum payment of $344,300, subject to withholding taxes, within two weeks of return of the signed document. The separation benefit represents 12 months base salary.

In addition, Beer will be eligible for accrued incentive compensation and disbursement from his corporate savings/stock plans. According to last year’s corporate proxy statement, Beer held more than 241,000 shares of Maytag stock.

The separation agreement also calls for Beer to receive a one-time lump sum pension payment of approximately $177,000. In addition, Maytag has agreed to retain Beer as a consultant for a 12-month period at a fee of $100,000 for work on business transaction matters for up to 40 hours a month. He will also receive an allowance for miscellaneous expenses associated with the consulting agreement of $12,500 per quarter.

Briatico, 57, began his career in 1974 with the Magic Chef Corporation in the Admiral Appliances Divisions, where he worked in many financial roles. He served as vice president of finance before being named vice president of manufacturing at Maytag‘s Cleveland Cooking Products in 1988. He was named vice president and general manager at Cleveland in 1995 and then president of Dixie-Narco Vending Systems in 2001. In 2003, he was named president of Hoover. He plans to retire at the end of the month.

Under the terms of the separation agreement filed with the SEC, Briatico will receive a separation benefit of $300,000, an amount equal to 12 months salary. He will also receive his accrued incentive compensation and the right to request disbursement under his stock/savings plan. According to last year’s proxy, Briatico held almost 124,000 shares.

Like Beer, Briatico will be retained as a consultant for Maytag for a 12-month period. He will receive $50,000 for work on Maytag business matters up to eight hours a month. Maytag has also agreed to reimburse him up to $5,000 if the appraised value of his home in North Canton on the date of the sale is less than his purchase price. The SEC filed agreement also shows Briatico will be eligible for a company pension.

In early trading today, Maytag‘s stock had dropped $1.51 to $17.16 with more than three million shares traded. The company also said it planned to stop selling Maytag-branded aplliances at Best Buy citing declining sales.