Maytag CEO’s Newton home for sale

Maytag CEO’s Newton home for sale
 
Date October 26, 2005
Section(s) Local News
Brief  
 
By PETER HUSSMANN

Editor

Ralph Hake’s home in Newton is up for sale.

The 4,200-square-foot home on nearly two acres in the southwest part of the city is being listed through the Des Moines office of Iowa Realty. The asking price is $759,900. The local assessor’s office values the property at $533,970.

News that the three-year-old home went on the sale block came just days after the Maytag CEO told stock analysts the company plans to “urgently address” issues concerning its North American production facilities. Hake said the company could close factories in an effort to cut operational costs.

At the top of the list is Maytag‘s flagship production facility in Newton. For years Maytag has said it is its highest cost operation and that new product platforms would not be coming to the plant until costs were cut. Last year, following a three-week strike, Maytag production workers agreed to a new four-year contract that included a number of concessions, especially in regard to health care. Maytag said the provisions agreed to were still not enough to bring new products to Newton.

Maytag also has been actively migrating product platforms to specific manufacturing sites. Its Herrin, Ill., site is now being used to produce most vertical-axis washers, with its Searcy, Ark., site producing companion dryers.

Employment at the Newton plant has dwindled over the past few years, from a high of about 2,500 workers in the late 1990s to about 1,000 today.

During the conference call with analysts on Friday after releasing third quarter results, Hake also said the company is close to securing a line of credit that would enable it to undertake some of its manufacturing restructuring initiatives. Other factories Maytag has targeted for possible closure include its Hoover production operation in North Canton, Ohio, and a washer factory in Florence, S.C.

The U.S. Justice Department is continuing to review the Whirlpool buyout offer for Maytag. In late August, the Maytag board of directors approved a plan where Whirlpool would buy Maytag for $21 a share in a stock and cash offer. Nearly $1 billion in Maytag debt would also be assumed by Whirlpool.

Maytag has set a shareholder meeting on the proposal for Dec. 16 in Newton. Stockholders must approve the sale offer for the takeover to move forward, in addition to Justice Department approval.

Analysts covering the appliance industry have speculated the Maytag headquarters in Newton would likely close upon a successful Whirlpool takeover. The combined companies would create the world’s largest appliance manufacturing operation.

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