Ohio offered $30 million to lure Maytag jobs

Ohio offered $30 million to lure Maytag jobs
Date May 12, 2006
Section(s) Local News


The State of Ohio is committing nearly $30 million in assistance to Whirlpool Corp. as part of its plan to integrate all former Maytag laundry operations at Whirlpool washer and dryer plants located in the state.

On Wednesday, Ohio Gov. Bob Taft announced Whirlpool’s plans to add more than 1,100 jobs at Whirlpool’s plants in Clyde and Marion and the state’s incentive package to secure the new jobs. A news release from the governor’s office said Whirlpool plans to expand operations at each facility and expects to create 553 jobs at the Clyde washer plant and 594 positions at the Marion dryer operation. Currently, these two plants employ approximately 6,100 workers, the governor’s office release said.

“Whirlpool’s decision to expand its operations and create more good jobs in Ohio is proof that our efforts to improve the state’s climate for business are getting results,” Taft said. “With our newly reformed tax code, coupled with a variety of incentive programs, the state has leveled the playing field for Ohio businesses and created a climate in which companies can invest and succeed.”

On Wednesday, less than six weeks after its $2.7 billion cash, stock and debt assumption Maytag buyout was finalized, Whirlpool announced that it would be closing all former Maytag laundry facilities and integrating their production at the Ohio plants. Production facilities in Newton, Herrin, Ill., and Searcy, Ark., will be closed — the latter two by the end of the year and the Newton site by the fourth quarter of 2007 — putting approximately 2,700 people out of work.

Additionally, Whirlpool said it would close the former Maytag headquarters operation in Newton by the end of the year, along with its research and development facility. Former Maytag administrative offices in Illinois, Canada and Mexico also will be closed. A total of 1,800 salaried positions will be eliminated as a result.

Whirlpool said the total 4,500 Maytag jobs lost would be offset by the creation of 1,500 new positions. Nearly 1,150 of those positions now appear headed to Whirlpool’s Ohio non-union factories.

Iowa Gov. Tom Vilsack said in Newton on Wednesday that the state did everything it could to entice Whirlpool operations in Newton. He said the state offered the largest incentive package ever offered a company, in excess of $20 million, plus an offer to build a new, state-of-the-art production operation in Newton. He said Whirlpool turned down the offer saying it already had modern production facilities in place with the capacity to grow.

“I want to assure the people of Newton and of Iowa that the State of Iowa did everything it possibly could in an effort to preserve and maintain and expand job opportunities in this community,” Vilsack said at a press conference in Newton following Whirlpool’s announcement.

In response to the lost jobs in Newton, Vilsack said he planned to propose that $10 million be made available to the community through the Iowa Values Fund to help stimulate economic growth opportunities in the area.

“The State of Iowa is prepared to put $10 million forward to the community of Newton and Jasper County in an effort to enable them to aggressively work to create opportunities either to fill the current facility, to build new facilities and to maintain economic activity in the community,” the governor said.

The Ohio Department of Development offered Whirlpool nearly $30 million in loans, grants and tax breaks to expand the Ohio plants.

“The state values Whirlpool’s long-time presence in Ohio,” said Lt. Gov. Bruce Johnson, who also serves as state development director. “The Ohio Department of Development is proud to work with the company in fulfilling its needs to expand these operations and create jobs for Ohio workers.”

In documents filed with the Securities and Exchange Commission as part of the merger, Whirlpool said it anticipated cost savings as high as $400 million by the third year after the merger. Efficiencies were expected to come from all areas of the business, including manufacturing and marketing, product research and development. The SEC documents also note that Whirlpool plans to make one-time cost and capital investments estimated between $350 million and $500 million to achieve these efficiencies.


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