Rumors of demise might be overstated

Rumors of demise might be overstated
 
Date March 11, 2005
Section(s) Columnists
By Peter Hussmann

Editor

 
 
So, what does Jean Morgan know that we don’t?” The call came in Thursday morning.

I knew immediately where this was going.

No, it wasn’t about some kind of insider information about the racetrack development the Newton City Council had just waved green that precipitated the call. It was, however, her statement during the meeting that all but had the Maytag production plant in Newton closed that made the caller wonder just exactly what she knew.

During discussion on Wednesday evening, Morgan said the track development was crucial to the community, particularly now because of the near certainty of the demise of the Maytag plant in Newton.

Say what?

Morgan’s remarks were obviously based on comments made earlier in the week by Maytag CEO Ralph Hake. During a visit with market analysts, designed to reassure investors that Maytag has, is and will continue to undertake the necessary steps to ensure a profitable company, Hake said that Maytag plans to focus all vertical axis (top load) washer operations in one dedicated plant and all dryer operations in another. Products made at its other facilities, he said, would “migrate” toward these prime facilities (Herrin, Ill., for washers and Searcy, Ark., for dryers — the logical assumption of the statement seems to tell us.)

HAKE WENT ON TO note that while Maytag has the nicest “suite” of high-efficiency laundry products in its stable of appliances, efforts will be undertaken to improve factory utilization at these manufacturing sites.

The local translation seemed dire. Newton — the thinking went immediately after Hake’s comments — is about to go the way of Galesburg.

There are a couple of things that make me take the optimistic view, for now at least, to caution the community against Morgan’s panic mode.

First is the fact that the union and company officials have been working hard since the strike ended and a new contract was approved to increase its operating efficiencies. During a conversation with corporate head of factory operations a couple months ago, he noted the improvements Newton has made in its dryer platform to make the plant more profitable. In addition, talks are continuing on ways for the company to better utilize its production employees to meet market demands, much like Amana workers did, which resulted in expansion of refrigeration manufacturing.

And should Maytag decide sometime in the future to even further expand its “suite” of high efficiency products through the release of a machine with another highly visible and respected label, Newton might seem a logical place to start such an operation.

Finally, the shear magnitude of the laundry workload Newton bears for Maytag would seem to make it difficult to totally replace, as it stands now.

Hopefully I’m not just looking through rose-colored glasses and rumors of Newton’s imminent demise are being greatly exaggerated.

SO, SHOULD MY ANALYSIS of Maytag‘s current and future local state of affairs prove inaccurate, will the racetrack project be the community’s saving grace?

That remains to be seen. But it can’t hurt at all.

Parallels for Newton might be able to be drawn from the Kansas Motor Speedway. Prior to its development several years ago, the site was a sleepy burg west of Kansas City. Today the track hosts major racing events and has drawn a plethora of well-known, high-end retailers which vie for the race fan’s dollars. (Can you say Cabella’s and Bass Pro Shop? If you ain’t racin’ you ought to be fishin’.) What was once viewed as a poor country cousin now boasts some pretty fancy threads and is the envy of many surrounding communities unwilling to take the initial risk.

In the coming weeks, the Daily News plans to take a close look at what’s transpired since the Kansas track was first proposed and subsequently opened. Hopefully, we’ll be able to glean some insight into the challenges the community faced, likely outcomes from the track’s opening and what we might expect as the project moves forward over the coming years. We’ll keep readers posted on when to expect the series.

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