Archive for May, 2006

Why Whirlpool bought Maytag

May 30, 2006
Why Whirlpool bought Maytag
Date May 30, 2006
Section(s) Opinion
To the Editor:

The vote (recently) on the $70 billion tax relief bill for corporate America was generally split down party lines. The Republicans passed it in both houses. California Representative Drier (R) bragged that he was born to cut taxes. He was oh so proud. The spiel — “This tax relief was badly needed because, to keep this great economy booming, corporate America needs that extra money for research and development and to expand and to hire more people to work in that expansion, etc., etc.”

Well, people of Newton, Iowa, certainly understand that Republican reasoning. We know now that Whirlpool bought Maytag to create more jobs. Whoops. I mean Whirlpool bought Maytag because they needed to add a good, hard-working workforce. Whoops. I mean they spent their hard-earned tax relief to buy up jobs and kill them (the jobs). Well, at least they spent their hard-earned tax relief on facilities. Whoops. I mean they bought the outdated Maytag facilities as leverage to get our governor to build greatly needed updated facilities. Whoops. Wrong again. Whirlpool has no use for any new facilities.

Well, research and development is vital to any company; number one reason Republicans give for needed tax relief. This must be the reason Whirlpool bought Maytag. Whoops. Wrong again. Maytag‘s R and D lagged behind Whirlpool’s. No need for last century’s technology.

So what did Whirlpool buy with their hard-earned tax relief windfall? Than answer is obvious. The only thing Whirlpool didn’t have was Maytag‘s market share.

I’ll quit with the sarcasm and be blunt. Whirlpool didn’t acquire Maytag, they killed Maytag. Maytag could have been sold to the investment group that planned to fix mismanagement and resell Maytag as a viable company. It wasn’t because then current management would not have been able to plunder and vote themselves millions of dollars.

Now, Maytag‘s market share, along with its jobs and facilities, can be buried and disappear. The only thing to reappear in Whirlpool’s pocket is Maytag‘s market share.

Thank God for Republican tax relief. Whoops. More sarcasm.

Stuart Allspach



More than 50 students cite plans to leave Newton district

May 25, 2006
More than 50 students cite plans to leave Newton district
Date May 25, 2006
Section(s) Local News

NDN Staff Writer

With more than 50 students having indicated they will not return to Newton schools this fall, administrators are struggling to make staffing decisions for the 2006-2007 year while hoping the exodus of students will decrease shortly.

“It’s significant enough, but it’s not a huge number yet,” said Jim Sogard, director of human resources and technology for the Newton Community School District. “The majority of those could be identified with Maytag, I believe.”

Two weeks ago, Whirlpool, which acquired the Maytag Corporation in March, announced plans to close all of its Maytag facilities in Newton, putting approximately 1,800 people out of work. However, about 1,100 production positions will move to existing factories in Ohio and about 400 corporate jobs will be created at Whirlpool’s headquarters in Benton Harbor, Mich., leaving open the possibility that some local workers could retain their jobs if they are willing to relocate.

Although school officials do not ask families who are leaving the Newton district for their reasons, Sogard said he believes many are Maytag-related because the number of notices for this time of year is above normal.

“We have normal departures during the summer anyway, but I would say this is a bit above that,” he said. “At present, just over 50 kids (are leaving). In a typical year, we may know of 25 or 30 leaving (at this time of year), but we don’t have data on that from past years.”

Sogard said school officials have been tracking attendance for several weeks now, attempting to determine how many students will not return next school year and to decide the appropriate staffing levels for the district’s buildings, a job that Sogard describes as “a bit of a guessing game” under present circumstances.

“Unfortunately, now is the time when you’re forced to staff folks. Now is the time for making contracts, and if we have the need to reduce staff in August, it’s too late,” Sogard said. “We have to make a good estimation now. It puts us in a bind.”

At this time, the number of students who are not returning is about evenly split between those in elementary and those in secondary school. A district of about 3,400 students, the Newton Community School District receives an estimated $5,000 for every enrolled pupil, Sogard said. While a significant decrease in enrollment would not affect the district’s budget for the upcoming school year, it could have a negative effect on the district’s finances beginning in the 2007-2008 school year.

“Our budget has been built and certified for the next school year,” wrote Superintendent Steve McDermott in a guest commentary addressing the Maytag announcement printed by the Daily News on May 18. “Staff cuts or major budget alignment moves will not be made until we see where our enrollment lands next fall. If our enrollment drops dramatically, we’ll need to adjust our budget and staffing levels accordingly. If enrollment remains fairly steady, we may not need to make major adjustments beyond moves dictated by high fuel prices or various other factors. Of course we hope for the best and prepare for the worst.”

Newton man says leaders must take a stand for labor rights, standards

May 25, 2006
Newton man says leaders must take a stand for labor rights, standards
Date May 25, 2006
Section(s) Opinion
To the Editor:

As I ponder the collapse of Maytag in Newton, I am trying to remember when I first encountered the phrase “worse case scenario thinking.” I believe it was during my first six weeks of Air Force training at Amarillo Air Force Base, Texas, in 1968. Reflecting on possible events such as a full nuclear exchange with the Soviet Union was not pleasant. But sometimes it is helpful for even the most optimistic person to be prepared for the worst.

When Matthew 19:26 attributes to Jesus the statement “… for God all things are possible” I think we have to assume that the word good could have been included — for God all good things are possible.

However, to say that some event is possible is not the same as saying it is probable.

Some politicians of both parties could use a dose of realism. Many elitist Republicans have a disturbing view of globalization. They seem to think capital should pursue low wages all over the world. In their view, wages should be driven down all around the world ad infinitum. Free trade may be a good idea, but the United States needs to use a full court diplomatic effort to get countries such as China to give a higher priority to labor rights and labor standards. The appliance industry may be extremely competitive on a global basis. But to maintain dignity and prosperity here in America, we need political leaders who will make negotiations over labor rights and labor standards as integral parts of ongoing international negotiations.

Michael Thielmann


Newton woman remembers the Maytag family

May 25, 2006
Newton woman remembers the Maytag family
Date May 25, 2006
Section(s) Opinion
To the Editor:

Through the years I’ve heard different views on how Maytag has treated the labor force. Some of the workers felt they were unfairly treated while others were happy to be working where they received good wages, a good medical plan and a good retirement plan.

Years ago, the employees were proud to be working for Maytag and one of the reasons was the demeanor of Fred Maytag and his wife, Ellen.

There are those that can tell you about Fred Maytag. He was well known as a man who would stop by a construction site and showed interest in what the workers were doing and why.

When he went on a cruise, he would strike up conversations with fellow passengers and ask if they wouldn’t like a Maytag washer. When the delighted acquaintance would accept, Fred would reach in his pocket and hand over one of the many Maytag advertising washers he had stashed in his pocket.

Mrs. Maytag was also no snob. One day she entered a shop in Newton. One of the clerks was busy with another customer and did not notice Mrs. Maytag. When the clerk realized Mrs. Maytag was waiting, she apologized profusely. Mrs. Maytag then told her, “If I ever see you neglecting a customer to wait on me, I just won’t come into your shop again.”

Their housekeeper and cook, Mrs. McClelland, was a member of our local club. When it was her turn to host our club, she told us that Mrs. Maytag had told her to have us come into the Maytag mansion for our meeting. We were welcome to bring our swim suits and take advantage of the pool. As we were sitting by the poolhouse, eating refreshments off Mrs. Maytag‘s fine china and drinking tea from her fine crystal, one of the members asked what she thought of us meeting there. Mrs. McClelland replied, “She’s in at the sink, washing dishes right now.”

Fond memories of the Maytag family. It is sad that we have no such memories of the latter managers of the company.

Betty Snook


Whirlpool likely to expand Amana operations in future

May 24, 2006
Whirlpool likely to expand Amana operations in future
Date May 24, 2006
Section(s) Local News


While Whirlpool operations in Newton are set to be shuttered in the coming year, its operations at its Iowa Amana refrigeration plant are likely to expand in the future.

Whirlpool officials laid out that scenario during an investor conference call on Tuesday where they gave an update on the intergration of Maytag into Whirlpool operations.

Two weeks ago, Whirlpool announced plans to close all of its Maytag facilities in Newton, putting approximately 1,800 people out of work. The world’s largest home appliance manufacturer also said it would close two other Maytag operations in Searcy, Ark., and Herrin, Ill., and transfer all Maytag laundry operations to two Whirlpool plants in Ohio where more than 1,100 jobs would be created.

Whirlpool closed its $2.8 billion purchase of Maytag on March 31 and since that time has been working to integrate the companies. On Tuesday, Whirlpool officials told investors that the merger is expected to generate annualized cost savings in excess of $400 million, even more than initially expected when the merger plan was announced. The May 10 announcement about the Maytag laundry closings has already produced an estimated $300 million in annual savings, company officials said.

In commenting on its integration strategy, Whirlpool said it planned to sell off the Maytag commercial operations, including Hoover floor care, Dixie-Narco vending machine and Amana and Jade commercial cooking businesses.

“The decision to divest the floor-care and commercial businesses will allow us to focus on our core appliance business,” said Whirlpool CEO Jeff Fettig. “We have received strong interest from a number of potential buyers and anticipate completing these transactions by the end of the year.”

David Swift, president of Whirlpool’s North American operations, outlined the benefits to Maytag brands operating under the Whirlpool platform. Noting that Maytag in recent years suffered from a high cost structure and a lack of innovation, he said efforts would be made to revitalize the brand by focusing on its heritage of quality and dependability in bringing products to market.

Swift also said the Amana brand would be expanded.

“Amana is the most underutilized (former Maytag brand),” Swift said. “We will clarify its position and grow the brand. We will build on that segment strength.”

Amana produces refrigerators at its Iowa plant, including the highly successful new bottom freezer unit. Swift noted that Whirlpool did not have a similar product in its pipeline and had planned to expend significant amounts of money to enter the product segment. With the purchase of Maytag, Whirlpool can avoid that step and fund increased investment in innovative capabilities for the product. He also noted that the Amana plant can be expanded.

Plans call for Maytag top-load washers and companion dryers made at Whirlpool’s Newton, Herrin and Searcy plant to begin production at its Ohio plants by the fourth quarter of this year. The Maytag front load washer made in Newton will continue to be produced into the fourth quarter of 2007 but its future production site has yet to be announced.

Whirlpool would not comment whether a new Maytag brand laundry product line is being planned.

The company also revised its earnings guidance for the year due to the costs associated with the merger. The Benton Harbor, Mich.,-based company said it expects full year earnings for 2006 to be between $6 and $6.25 per share compared to $7 to $7.25 per share prior to the merger. The company said it expects full year earnings in 2007 to be in the $9 per share range.

Whirlpool said it will host another investor conference call in July.

Union member corrects letter to editor in Register

May 23, 2006
Union member corrects letter to editor in Register
Date May 23, 2006
Section(s) Opinion
To the Editor:

In his letter to the editor, “Union leaders led workers astray,” (Des Moines Register, May 13) Mr. Brad Morford states that union leaders at Maytag “have encouraged people to strike and refuse automation.”

I don’t know from what authority Mr. Morford speaks, as I find no record of him being a member of UAW Local 997 in Newton, Iowa.

On the other hand, during my 40.9 years’ seniority relationship with Maytag in Newton, I also was a union representative in various positions for 35 years. Therefore, I do speak from authority on the subject of strikes and automation at Maytag in Newton.

First, Maytag in Newton was organized in 1937. Since that time, to date, there have been only six strikes during this 69 years. In my involvement, the union leadership has not “encouraged people to strike,” the membership makes that decision by secret ballot.

Second, at Maytag in Newton, the union has never “refused automation.” Management makes the decision whether to automate, they don’t ask the union for permission.

So I am at a loss as to how the union can “refuse automation.”

In fact, Maytag in Newton has gone through periods where they did automate and it has turned out to create jobs.

Unfortunately, the most recent management turned all that around.

Other facts that Mr. Morford might find interesting (include) the Union negotiated an employee involvement program whereby the members in the plants would be involved with management to cut cost. Those cost savings alone, since 2001, have saved Maytag in Newton $167 million (company figures, not mine).

The concessions in 2004 saved the company millions more.

However, management was making decisions that were more costly than what the union and its membership was saving the company.

For example: $70 million on free airline tickets if you purchased certain products. (The airline tickets cost more than the products). Management decision on a failed China deal, $95 million. Management’s decision to start up and after three years close a facility in South Carolina. Settlement of at lease one lawsuit due to management’s decision not to recall and repair certain products.

That, Mr. Morford, is just the short list. You might want to get your facts straight before you write your anti-union letters.

Oh, yes, the guy that played a major role in destroying a great company walked away with $19 to $20 million. You no doubt believe that is OK.

Max L. Tipton


State OKs $10 million for Newton job creation

May 19, 2006
State OKs $10 million for Newton job creation
Date May 19, 2006
Section(s) Local News

NDN Staff Writer

The $10 million state economic development grant promised to Newton by Gov. Tom Vilsack received approval from the Iowa Department of Economic Development Board on Thursday.

The decision formalized Gov. Vilsack’s comments in Newton on May 10, when he offered the community an “unprecedented aid package” of $10 million in state money to fuel job creation in Newton and Jasper County following the loss of Maytag jobs.

The money will come from the Iowa Values Fund and be available in increments over the next three years with $2.5 million of the money available in fiscal 2006, $2.5 million in fiscal 2007 and $5 million in fiscal 2008.

That money can be used by Newton to lure new businesses to town or assist existing businesses in creating new jobs. The hope is the new jobs would offset the loss of the 1,800 Maytag jobs as announced by Whirlpool May 10. Those jobs are scheduled to be phased out between now and October 2007, with about 1,100 production positions moving to existing factories in Ohio and about 400 corporate jobs moving to Whirlpool’s headquarters in Benton Harbor, Mich.

Shifting those jobs to Ohio and Michigan earned Whirlpool tax breaks from those two states totaling nearly $40 million. Vilsack said Iowa offered Whirlpool incentive packages around $20 million and even offered to build a new plant in Newton to retain Whirlpool jobs.

In the end, the jobs could not be saved. Now Iowa offers $10 million in Values Fund money for Newton to help replace those lost jobs.

“It definitely helps, but it’s not a blank check that’s given directly to us for what we want,” Newton Economic Development Director Bryan Friedman said this morning. “It’s still through their normal Values Fund process.”

This means businesses approved by the city for the grant money would be reviewed by the state’s Economic Development Board and would need to meet the criteria of other Iowa Values Fund projects. Those criteria include meeting wage and benefit thresholds, receiving support from Newton City Council and being fully collateralized by business or equity fund assets.

Values Fund grants also typically require a local match, the amount of which is decided by the board on a case-by-case basis. Typically, the board requires a 20 percent local match according to Iowa Department of Economic Development Director Mary Lawyer.

The $10 million also comes with the stipulation that it must be used within a certain timeframe. The first $2.5 million needs to be used by May 31, 2007, or it will be de-allocated, Lawyer said. The second $2.5 million needs to be used by May 31, 2008, and the remaining money needs to be used by subsequent years.

Friedman doesn’t see the use-it-or-lose-it requirement as a problem for the community.

“We want to be able to start to bring in new job opportunities at the same time we’re having Whirlpool transition out of this community,” he said. “We don’t want things to sit empty.”

Given Values Fund requirements, the money likely is not eligible for funding the Newton Promise, Newton Development Corporation’s proposed scholarship program for all Newton Senior High School students, which the group hopes will lure new people to the community and encourage displaced Whirlpool employees to remain here. Regardless, NDC Executive Director Kim Didier said her group would work with the city and businesses to help secure new jobs in the area.

Friedman hopes the announcement of the $10 million for Newton will further stimulate interest in the community. Even before the announcement, he said, there had been businesses interested in Newton.

“We’ve had inquiries on things — not directly related to this $10 million — but folks are interested in this community,” Friedman said, declining to name the businesses until plans were more formalized.

In addition to luring businesses to Newton, Friedman also said the city would be open to expending some of the grant money on job creation outside of city limits, in Jasper County or other communities since those areas are affected by the loss of Maytag jobs, as well.

“We would hope we would be bringing in lots of job opportunities in the next year that would qualify for this Values Fund funding,” he said. “We think that’s definitely doable.”

Lawmakers seeking help from feds

May 19, 2006
Lawmakers seeking help from feds
Date May 19, 2006
Section(s) Local News
By Daily News Staff

Iowa Senators Chuck Grassley and Tom Harkin and Iowa Rep. Leonard Boswell are calling for meetings and assistance for Newton in the wake of the loss of 1,800 Whirlpool jobs.

Grassley announced he will host a meeting with Newton Mayor Chaz Allen and Assistant Secretary of Labor Emily Stover DeRocco on June 8 to follow up on a personal telephone call Grassley made to Department of Labor Secretary Elaine Chao after the Whirlpool announcement. Following the conversation, Chao asked the assistant secretary for employment and training administration to assist the Maytag workers and the community with all the available resources at the department.

“When I called Secretary Chao, she was very sympathetic to the Newton community and offered all resources that the department had available,” Grassley said. “I appreciate the work the labor department is doing to help the workers and the community. We need all hands on deck to ensure that these workers get the reemployment services they need to help them prepare for future employment.”

Grassley said he expects the discussion to include the array of opportunities and assistance that are available from the labor department to respond to the needs of the Maytag workers. They plan also to identify similar resources that are available across the federal government for the workers and the community.

Also today, Harkin and Boswell sent a letter to Chao, calling upon the Bush administration to help displaced Whirlpool workers.

“The loss of 1,800 jobs will be profoundly felt in the Newton community, and if appropriate federal resources are not immediately made available, these layoffs will have a devastating effect on the lives and economic security of these workers and their families,” Harkin said in a released statement.

In their letter, Harkin and Boswell called upon the Department of Labor to:

* Make trade adjust assistance benefits available to all affected Maytag workers.

* Mobilize the DOL rapid response program.

* Provide swift approval of National Emergency Grant.

* Support assistance through community colleges.

Rebuilding a more solid Newton

May 18, 2006
Keeping In Touch: Rebuilding a more solid Newton
Date May 18, 2006
Section(s) Columnists

State Legislator

The ramifications of the closing of the Maytag operations in Newton are felt in many, many ways. Initially, we think of the families affected by the action, and the heartache and uncertainty that come with a life of anticipation of having a good job, and providing for the needs of their loved ones. Although transition occurs for many, there yet remains the anguish and concern, for the working men and women must move on to salvage their family’s future and well-being.

We have but one mortal life, and throughout that life decisions are made that affect many in addition to ourselves. There was no reason to think that the men and women who decided to work at Maytag were facing what since has come to pass. After all, many were fifth generation workers, and just a few years ago, the reputation of the company was solid, stock prices were high, and production was calling for multiple shifts and overtime. Never shall I understand how the poor and provincial decisions of those in corporate leadership resulted in their being awarded with riches that would take most of us a lifetime to spend.

Many things are in the works, and additional conversation from five meetings I had over the weekend point to the fact that the new focus on Newton’s future should not have most of the eggs placed in a single basket. Diversification is the key, and manufacturing a variety of products enhances sustained economic viability and community vitality. As a community, we have a great reputation, and Maytag‘s workers were known for their education, training and dedication. Theirs was pride in a product with nationwide exposure, and even my travels abroad for agricultural sales and trade resulted in many identifying their knowledge of the Maytag brand.

The sooner we approach decision makers regarding potential manufacturing opportunities, the sooner a sense of stability will return to our community and citizens. With the massive infrastructure that exists along with the buildings that served Maytag, a plethora of options must be pursued. One example would be that of wind-energy generators and blades. My Natural Resources Committee, in one of the last bills before session adjournment, passed a “Wind Energy Tax Credit” bill. This was intended to serve as an incentive for those seeking to invest in wind farms, with the sustainable, renewable wind energy electrical production sold into the grid of electric companies. Yet, if you order a wind generator with its tri-configured massive blades, you have to wait 18 months to receive it. Ironically, most are made in Germany, and Newton with its central location is perfect. Many other ideas are in the offing, but again it is essential for community leaders to pause, reflect on the past, and be innovative in their consideration of the future. With the Iowa Values Fund available to assist in a variety of ways, revitalization won’t happen overnight, but we can rebuild the city into something far more solid in view of this global economy that is consuming worker and family ambitions and values.

As a final note, Rep. Paul Bell and I will be introducing legislation this fall, which should be ready for consideration in January of 2007, that would specify that Newton and Fort Dodge be “held harmless” in FY 2007-09 with any reduced state-aid to their schools, resulting from the loss of students. Anticipating reduced enrollment, in many cases the costs of administration, utilities, transportation and other fixed expenditures of the Newton Community School District will remain fairly static. Our school’s administration needs the opportunity to evaluate the situation of enrollment adjustments, and plan accordingly. I would guess our colleagues, on a bipartisan basis, would agree with this approach, and thus we shall vigorously pursue that opportunity for our school and district property tax payers.

Guest Commentary: Schools will open their doors next fall

May 18, 2006
Guest Commentary: Schools will open their doors next fall
Date May 18, 2006
Section(s) Columnists

Newton Community School Superintendent

In response to both the recent Maytag news and to all the outside speculation of what will happen here, I feel the need to share a few facts related to our school district. Our Newton Community Schools will open their doors next fall, students will enter and teaching and learning will occur. No one is certain how many students will attend school here next August. I can assure you we will be staffed to serve at least as many students as were enrolled this school year.

Our budget has been built and certified for the next school year. Staff cuts or major budget alignment moves will not be made until we see where our enrollment lands next fall. The official count day is always the third Friday in September. If our enrollment drops dramatically, we’ll need to adjust our budget and staffing levels accordingly. If enrollment remains fairly steady, we may not need to make major adjustments beyond moves dictated by high fuel prices or various other factors. Of course we hope for the best and prepare for the worst.

No matter what happens, we will keep the community informed. If significant changes in our community schools are ever proposed, community members and stakeholders will have opportunities to share their thoughts before decisions are made.

The fact is, after already losing approximately 2,600 jobs before last week’s news, our total enrollment has declined, but not as much as one would expect. We haven’t seen a direct correlation between the number of jobs lost and our enrollment decline. As I’ve told many people, we’ll have a nice town and quality schools here for a long time. What’s uncertain is how our community will evolve and how quickly it will rebound.

Sometimes we get too caught up in the numbers. What may be my biggest concern is the loss of so many quality individuals from Newton, Kellogg and surrounding areas. We stand to lose many leaders, dedicated volunteers, caring neighbors, dependable contributors and outstanding young people. We realize many are now making decisions that will change the course of their lives and those of their family members. Our hearts go out to everyone working through this time of adversity.

On the other hand, we all know the quality of life and many benefits this place has to offer. I’ve heard many encouraging stories of people finding ways to remain in Newton. New neighbors will join us in our community’s transition, as well.

What I have witnessed here in children and adults alike is a general resilient nature. There are many people in this community that have risen above tough times before and they’ll do it again. We here at school will continue to do our best to support children and families no matter what challenges arise. Of course, education is our primary focus and we believe the best way to support our students is to make certain they are learning every day in our schools.

If you have thoughts, ideas or suggestions related to our schools or the district’s future, please call me at 792-5809 or write to me at