New energy bill may help keep Maytag production jobs

New energy bill may help keep Maytag production jobs
 
Date September 20, 2005
Section(s) Local News
Brief  
 
By PETER HUSSMANN

Editor

A new federal energy bill signed into law this summer may help to ensure continued production at Maytag operations in Newton, even under new Whirlpool ownership.

In late July, President Bush signed the bill, giving tax credits to U.S.-based manufacturers of high-efficient home appliances. Maytag said the measures will allow it to expand its sales of high-efficiency washers, refrigerators and dishwashers while gaining tens of millions of dollars in federal tax credits for the next two years.

The assistance for U.S. appliance manufacturers was added to the bill by Sen. Charles Grassley, R-Iowa, and Rep. Jim Nussle, R-Iowa.

The appliance manufacturers’ tax credit applies only to appliances produced in the U.S. It gives producers of high-efficiency appliances a credit of $50 to $175 for each highly efficient appliance produced in excess of a rolling baseline.

The baseline is the average number of appliances produced in the three previous calendar years that meet standards set by the U.S. Department of Energy under its Energy Star program.

The Maytag Neptune front-load, produced in Newton, has earned the Energy Star rating. The maximum credit for each appliance manufacturer is $75 million over a two-year period beginning in 2006.

Grassley said Maytag has backed the effort to get the provision passed through Congress and signed by the president.

“Over the two to three years we’ve been working on this, Maytag has been one of the biggest supporters,” Grassley said in a telephone interview. “It helps in keeping them competitive, and, from a standpoint of jobs, it is very helpful in keeping jobs in the U.S.”

Whirlpool produces its high-end, energy-efficient $1,200 Duet model in Schorndorf, Germany. Almost two million of the front loaders have been sold in the United States since coming on the market in 2001. Labor costs in Germany are $32 an hour, including benefits. Production of the high-efficient product in Germany would not be eligible for the new appliance manufacturers’ tax credits included in the energy bill

The provision in the energy bill flew largely under the radar, although Maytag CEO Ralph Hake commented on the tax credit to First Call at the time.

“The appliance manufacturers’ tax credit will support our future product innovations and is expected to have a positive impact on the company’s overall financial performance,” Hake said. “In addition, the energy bill is a winning proposition for both the consumers and the environment.”

Also included in the energy bill are provisions for state-sponsored incentives, including authorization of up to $250 million over five years to provide rebates to consumers purchasing energy-efficient appliances.

David Steiner, Maytag‘s vice president of government affairs, said Maytag has long backed the federal effort to provide the tax credit to U.S.-based appliance manufacturers.

“It will encourage further development of new energy-efficient, environmentally-friendly appliances and will help support American appliance manufacturing jobs,” he said.

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