No new product lines in Newton this year

By PETER HUSSMANN
Editor

Steve Ingham is not a detective, nor has he played one on TV. But he might as well be Joe Friday when he discusses “just the facts” surrounding Maytag’s manufacturing state of affairs.
Will a new laundry product line be launched in Newton this year?
“No,” the senior vice president of manufacturing for the corporation’s new One Company operation says matter-of-factly.
Will one ever?
“Don’t know,” he says.
What he does know is that Maytag faces some profound challenges as it attempts to rebound from a net loss of $14.1 million in the fourth quarter of 2004 compared to net income of $23.9 million the year before and a full-year loss of $9 million compared with net income of $120 million in 2003.
That fact doesn’t do much to stem the uncertainty in the community surrounding Maytag’s future. With 156 more layoffs at the plant just last week, employment levels are down about half from the 2,500 workers employed in production operations as recently as 2002. The layoffs impacted workers with as much as eight years’ seniority.
But Ingham says the facts, and the knowledge of those facts, will be what will lead Maytag to better things.
“We have to attack it with knowledge,” Ingham says as the new overseer  of the bulk of Maytag’s manufacturing operations worldwide.
The year past — financially and emotionally — was one Maytag would probably like to put behind. The closure of its Galesburg, Ill., refrigerator manufacturing facility, with production moving to Mexico and its Amana operation in Iowa, left 1,600 people without jobs. The restructuring of its operation to bring Maytag Appliances and Hoover under the corporate umbrella eliminated 20 percent of its salaried workforce, with the bulk of the 1,100 jobs lost occurring in Newton and North Canton, Ohio. A four-week labor strike idled Maytag production in Newton and left the community holding its collective breath.
The eventual four-year labor agreement reached, however, was not enough to pull the local operation from the banned list for new product lines. Employment levels at the factory have continued to dwindle, with the latest layoff occurring last Friday, pushing employment seniority levels back as far as 1997. A settlement was reached — costing the company millions — in a class-action lawsuit over mold and mildew and electrical problems associated with early generation Newton manufactured horizontal-axis Neptune washer models. As can be seen, the Lonely Repairman faced a barrage of unflattering reports that tested not only the mettle of the organization but its standing in some of the communities it calls home.
Maytag, however, moved forward.
“We have addressed our challenges head on and have taken decisive steps to improve Maytag’s performance going forward,” said Maytag Chairman and Chief Executive Officer Ralph Hake following January’s release of last year’s performance.
The challenges Maytag faces are many: spiraling production costs, spiked by increases in steel and oil prices; an influx of foreign competition, especially acute in the high-efficiency washer platform, an area Maytag once held nearly alone; pricing points at or below those 30 years ago (a Maytag Neptune cost approximately $1,100 when brought on the market in 1997. The same type machine costs about $900 today); and potential changes in its sales venue due to the merger of Sears and Kmart and the elimination of Best Buy as an outlet for Maytag major appliances. All this leaves One Company officials walking a tightrope as they work to bring the stock price up from the $16 levels seen today, about half of what it was a year ago.
Ingham doesn’t shirk from these facts. In fact, he encourages the discussion.
“It’s incumbent upon people to educate themselves on the business climate,” he said. “If they take the time to educate themselves, it may help guide them.”
The first principle to that end, Ingham says, is to understand that Maytag is in the business to anticipate, respond and meet the customers’ demands.
“We have to be focused on the market,” Ingham said. “We have to have viable products.”
And his job is to ensure those products brought to market within the 11 production facilities involved in major appliance operations are done so in such a manner as to enable Maytag  to compete in the global marketplace.
The fact, Ingham says, is that Newton remains Maytag’s highest cost plant in terms of its ability to meet cost, quality, safety and delivery parameters. That fact continues to preclude Newton from gaining new product platforms and likely portends continued declines in employment levels at its Newton plant.
Strides, Ingham notes, have been made at the Newton plant in bringing its cost, quality, safety and delivery structure in line with corporate expectations. He said one of Newton’s Lean Sigma manufacturing approaches is being used company-wide now, while some “ambitious changes” have been made to improve dryer operations and to some finishing systems.
“The most important task in Newton is to improve our performance every day,” Ingham said. “Nothing is more important than doing a good job today.  We need to be cognizant that we need to meet the customer’s requirements. We’re being up front, and I’m very pleased by the way that message is being carried down to the workers. People want to contribute.”

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