Vilsack meets with Whirlpool executives

Vilsack meets with Whirlpool executives
 
Date May 05, 2006
Section(s) Local News
Brief  
 
By DAVID PITT

AP Business Writer

DES MOINES — Gov. Tom Vilsack met with Whirlpool Corp. executives on Thursday and said he told them the state is willing to be creative with incentives to keep the appliance manufacturer in the state.

“I met with Whirlpool officials (Thursday) to express our sentiments to preserve and maintain as many jobs in Iowa as possible,” Vilsack said in a statement. “I also demonstrated our state’s willingness to be innovative and creative with regards to economic development incentives, while recognizing the challenges we face.”

The executives, including CEO Jeff Fettig, told the governor that there were many factors they needed to consider in making decisions about which factories to keep open, Vilsack’s statement said.

“I once again reiterated our state’s willingness to do everything we could to keep Whirlpool as part of Iowa’s family,” he said after the meeting at Whirlpool headquarters.

Benton Harbor, Mich.-based Whirlpool completed a $2.6 billion purchase of smaller rival Maytag on March 31. At that point, Maytag, an independent company since 1893, became a subsidiary of Whirlpool.

Whirlpool officials have visited the state at least twice since buying Maytag as they consider how to most efficiently merge the companies.

David Swift, the president of Whirlpool’s North America division, said he has 26 manufacturing plants in North America to evaluate after the Maytag purchase. Both Maytag and Whirlpool factories will be examined to see which would be most efficient to run.

In Iowa, the company now owns the Maytag washer and dryer factory in Newton along with the corporate headquarters there, an Amana refrigerator and microwave factory in Amana and a warehouse in North Liberty.

There is little doubt that plant closings will be part of the decision-making process. Prior to Whirlpool’s purchase of Maytag, corporate leaders were examining the company’s “manufacturing footprint” in order to cut costs. Maytag officials said the Newton plant was its highest cost operation, a situation local labor officials questioned for its veracity.

In documents filed with the Securities and Exchange Commission, Whirlpool had said it expects to save as much as $400 million by the third year following the purchase. Efficiencies are expected to come from all areas of business, including manufacturing and marketing, product research and development.

The SEC merger document also notes that to achieve these efficiencies, Whirlpool will be required to make one-time costs and capital investments estimated between $350 million and $500 million.

On Tuesday, Vilsack, who has not been optimistic the Iowa plants will be kept open, suggested the state should build a showcase appliance factory for Whirlpool Corp. as an incentive to keep about 4,000 Maytag jobs in the state.

Whirlpool officials said they will announce their decisions about the future of the Maytag division properties by the end of this month.

Last week, Whirlpool officials confirmed that they are currently having discussions with salaried employees working at Maytag headquarters. Many have already been let go with others notified of a separation date later in the year. Others have been offered positions with Whirlpool. Company officials would not comment on the number of people involved or what the future held for the headquarter’s operation.

Spokesman Dan Verakis said the meeting with Vilsack on Thursday was part of the company’s efforts to review Maytag operations and hold discussions with communities in which those operations are located.

Daily News Editor Peter Hussmann contributed to this story. Contact him at phussmann@shawnews.com

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