Archive for the ‘News Stories 2004’ Category

Maytag plans to recall laid-off workers

July 13, 2006
Date July 13, 2004
Section(s) Local News

NDN Staff Writer

NEWTON — Maytag plans to recall approximately 100 to 120 previously laid-off workers early next week at the Plant 2 laundry facility here.

According to company spokesperson Lynn Dragomier, the employees would return to active work Monday so the facility can increase production levels to meet increasing consumer demand for Maytag laundry products.

“We increase production when market demand rises and that is exactly what is happening now,” she said.

Dragomier attributed the increased demand to several factors, including stronger consumer confidence and purchase incentives offered to laundry customers.

Recalled employees would come from the pool of workers who were on layoff prior to the June 10 strike of United Auto Workers Local 997.

Since the strike ended, the status of those workers has been unclear.

During the three-week strike, Maytag recalled approximately 400 laid-off workers. Some of those workers did not respond or declined the recall, Dragomier said. But most or all of the workers who accepted Maytag‘s offer to return to work, walked off the job a short time later to join strikers.

After the current contract was ratified and employees returned to work July 6, previously laid-off employees reported for work. An associted press story quoted one of the workers saying she was told the laid-off workers were “unreinstated strikers.”

That has left benefits — including unemployment pay and health insurance — for those workers in doubt.

Union officials have previously said they still viewed those workers as being on layoff and would file a grievance on their behalf.

Dragomier said Maytag has no comment on the issue and she again declined to comment on those workers’ classification this morning.

Calls to union officials were not immediately returned this morning.


New prescription drug plan saves Maytag millions

November 24, 2004
New prescription drug plan saves Maytag millions
Date November 24, 2004
Section(s) Local News

NDN Staff Writer

Beginning in 2005, Maytag‘s Newton UAW employees and retirees will switch to a new prescription drug plan requiring them to purchase all maintenance prescription drugs by mail.

The move comes as part of Maytag‘s companywide plan to switch its drug program in an effort to save money on the ever-mounting cost of health care.

How will the new plan affect Maytag‘s employees and retirees? What effect will the move have on local pharmacies? And, ultimately, is the move the best plan for the company and the community?

Maytag Compensation and Benefits Vice President Tim Schiltz spoke with the Daily News about those issues and the prescription plan in early November.

To him, the plan is a great way for Maytag to keep company costs down and still keep co-pays reasonable for employees and retirees.

He said institution of the program across the whole company will save Maytag an estimated $12 million a year once all employees are under the new drug plan. Without those savings, Schiltz said, the company would have to make cuts or changes in other areas to keep health care affordable.

Maytag began looking at health care issues in 2000, seeking ways to help cut the ever rising costs while still providing employees with a solid, affordable health plan. One aspect the corporate team examined was prescription drug costs. Ultimately that led to the new drug plan with mail order pharmacy Caremark.

Salaried employees are already under the mail order plan and Maytag has been systematically bringing union employees under the plan as the groups’ contracts are renewed.

In some cases, Schiltz said, there is resistance to the change. He said that some employees have the perception that the company is trying to cut their benefits as much as possible simply to save money. He said that’s not true.

“We really do want our employees to get the care they need,” he said, “It doesn’t do us any good to have unhealthy employees.”

The new program saves the company $12 million by requiring employees and retirees to purchase maintenance drugs through Caremark. Maintenance drugs typically include any drug a person takes long term for a medical condition, such as the arthritis drug Celebrex. Short term prescriptions for illnesses, like drugs to fight cold symptoms, can still be filled at local pharmacies.

Schiltz noted that while the mail order program saves the company a significant amount of money, it also saves union employees and retirees money. Under the new plan, Maytag employees and retirees would have to pay a $5 co-pay for generic prescription drugs, a $10 co-pay for formulary drugs and a $15 co-pay for brand-name drugs. Each of those co-pays would cover a 30-day supply of the drug.

But with the mail order, those co-pays double to $10, $20 and $30 respectively, but the employee gets a 90-day supply of the drug, effectively saving the employee 50 percent over a three-month period. A three-month supply of a generic drug from a pharmacy would require three co-payments totaling $15, versus the single co-pay of $10 under the mail order program.

Caremark’s wholesale drug purchases enable the savings.

But Lindsey Stephens, Best Practices Director for Medicap Pharmacies, contests how much money mail-order pharmacies actually save the companies they work with. She said mail order companies play games with average wholesale prices (AWP), leading to “smoke and mirrors” savings that don’t really exist. AWPs are numbers set by the drug manufacturer that function as a suggested manufacturer’s price.

“What people do not understand is that if a mail order company approaches the manufacturer with a large enough order, they can request that their order be specially packaged for them,” she noted. “They have oddball sizes and are able to request AWPs be assigned to the smaller packages. Since this is really a fictitious number, the manufacturer will assign any AWP to the package size that the mail order company requests.”

For up to 25 percent of drugs, mail order companies request inflated AWPs and make it appear as if they are saving companies money when in fact, in some cases, they actually charge more than a local pharmacy would, Stephens said.

Stephens said Maytag should have investigated other alternatives before jumping on the drug mail order bandwagon.

“Instead of first looking at alternative, innovative ways to confront increasing health care costs, utilizing an Iowa-based company and local pharmacy providers, they have decided to take their business out of town and the state,” Stephens said. “That isn’t being a good corporate citizen and doesn’t go very far in supporting the local economy or employees needs.”

Schiltz admits that requiring employees and retirees to use out-of-state drug service has a negative effect on local pharmacies.

“It is the one downside,” he said. “We want to be a part of this community … but we also need to make sure that the best way we can do that is to ensure our own financial viability.”

It’s unclear at this point just what sort of effect the mail order program will have on local pharmacies. In other areas where large employers switched to mail order business, smaller pharmacies were forced out of business.

About a year ago, “GM’s UAW began a mandatory mail order program and a tremendous amount of Michigan pharmacies had to close their doors because of that. That has been the most significant (effect on pharmacies) because of the sheer number of employees that are on that plan,” Stephens said.

Whether the same thing could happen here in Newton is unknown.

Julie McCarey, owner of the Newton Medicap, said about 25 percent of her business comes from Maytag employees. Although she’s concerned, she’s taking a wait-and-see approach toward Maytag‘s new plan at this point.

“I’m not sure yet,” she said. “Obviously, all of us in town are going to have to make some changes as to how we do things.”

So far, the only effect on McCarey’s business has been Maytag employees and retirees coming into Medicap with questions about Maytag‘s new plan.

“There’s been a lot of concern expressed by the employees,” she said. “That’s the hardest part. They’re coming to us and we don’t have the answers.”

Schiltz encourages Maytag employees and retirees to try the new system before knocking it. He uses it himself and said he came to like the mail order plan once he tried it.

“The only complaint we’re getting is from people who haven’t tried the system,” he said, “and I understand this. The first time I used it, I didn’t have a clue, and I’m a benefits guy. It’s pretty easy.”

Easy or not, local pharmacists still insist that mail order is a poor option for them and their customers alike.

“It’s not the patients’ preference and the problem is the patients aren’t given a choice if they want to get it locally or by mail for the same co-pay options,” Stephens said, “Their option is just that they have to get it through the mail. It doesn’t leave an even playing field.”

Research engineer starts new career in home-building

November 24, 2004
Research engineer starts new career in home-building
Date November 24, 2004
Section(s) Local News

NDN Staff Writer

A little planning can take one a long way. Anticipation of likely events can pay off in big dividends. Just ask Dru McMillan.

When McMillan realized that his 28-year career at Maytag may be in jeopardy, he began planning for a second career, something totally different. Now, less than a year later, McMillan is heading up a construction company, and he hopes his efforts can make a difference in the community and in the lives of those whose homes he’s building.

McMillan’s father was diagnosed with emphysema in 1960. For the last two years of his life he was confined to a wheelchair until his death in 1998. That set McMillan to thinking about the problems of mobility that wheelchair-bound individuals face every day in their own homes. Now, McMillan hopes to make life just a little easier for those in wheelchairs or the elderly, through the construction of his homes.

McMillan is working on his first house, situated on property he purchased June 1, just one day after his termination from Maytag. The home at 708 E. 21st St. Place S. is being built using Universal Design building principles, intended to create homes that are usable by all people, regardless of age, size or abilities throughout their lifespan.

Universal Design utilizes construction plans which can ensure that its occupants’ needs are met as those needs change throughout their lives. Wider doorways and hallways and entrances with level surfaces, as well as many other non-intrusive construction methods combine to create a home that can allow residents to remain in their home much longer.

As examples, McMillan’s home has a garage floor that is even with the driveway and the remainder of the house, making it much simple for maneuvering a wheelchair. All doors are 32 inches wide and the master bath features a shower area that can accommodate a wheelchair. The three bathrooms, two with showers, all have a 5-foot turning radius between fixtures. The back deck can be accessed easily from the kitchen as well. McMillan says the cooktop on the stove will be somewhat lower, and, if the new owner requests, kitchen countertops can be adjustable according to the owner’s needs. The idea is to create a home that is very usable for those with disabilities without giving an unusual appearance of alterations.

“We don’t want the accessibility of the home to be visible,” McMillan said.

The home’s basement features a family room, utility and storage rooms, two bedrooms and a bath with a shower. Although no elevator has been installed in the home, McMillan says the steps to the basement are wide enough to accommodate a rail-chair system for easier access.

McMillan has spent the last 28 years in research at Maytag, so the building trades is a completely new direction for his life. He says he is learning the building trade as he goes, however he’s not a complete novice to the profession. He worked his way through Northwest Missouri State College at Maryville, earning bachelor of science degrees in mathematics and industrial technology. He picked up another bachelor’s degree in electrical engineering from the University of Missouri at Rolla, then went to work for Maytag.

Now, working on his first home as McMillan Construction Company, he’s receiving help from his son and high school students who come by after school to help out. In all, McMillan says more than 40 different people have had a hand in the home’s construction. Plumbing work was contracted out to Jason Anderson; Nook Heating and Cooling did the air conditioning work; and Al Lundberg was contracted for electrical work.

Although his first construction job probably won’t be a money-maker, McMillan figures his new house is doing some good on several levels.

“We tore down an eyesore so it’s improved the neighborhood’s property values, and it will provide a home for a disabled or elderly person, and it’s created some jobs,” McMillan said. “I learned years ago that the greatest part of life is the gift of giving.”

McMillan hopes to have the home constructed by mid-December. Although he’s already purchased another house in Mitchellville which he will demolish for his next project, he says Newton is a great place to build his houses.

“This is a community of people helping people,” McMillan said. “It’s an easy commute to several metropolitan areas, you’ve got good schools, a nice hospital, Meals on Wheels and a latch-key program at the YMCA. It’s a great place to locate.”

Maytag announces 150 layoffs at Amana plant

November 22, 2004
Maytag announces 150 layoffs at Amana plant
Date November 22, 2004
Section(s) Business
AMANA (AP) — Maytag Corp. plans to lay off 150 workers at the company’s Amana Refrigeration Products plant due to reduced production needs.

The layoffs, announced about a week ago, will take effect Monday, Maytag spokeswoman Lynn Dragomier said.

The company, using language in a new union contract, hoped to achieve as many vacancies as possible through voluntary layoffs. The new contract allows the company to bypass the usual seniority layoff system when workers volunteer to leave work.

Dragomier said the layoffs are “a fairly routine adjustment in scheduling due to seasonality in demand and other marketplace dynamics.”

Ed Miller, business agent for Machinists Local 1526, confirmed that the union had been notified of the layoffs.

The Maytag plant in Amana produces side-by-side and bottom-freezer refrigerators.

It employs about 2,300 union workers.

Maytag on track to meet cost cut plan

November 19, 2004
Maytag on track to meet cost cut plan
Date November 19, 2004
Section(s) Local News
NEW YORK (PRNewswire-FirstCall) — Maytag Corporation today presented its strategies for improved performance during a conference with financial analysts in New York City, saying that Maytag is a much different company than it was just a year ago.

Chairman and CEO Ralph F. Hake commented, “Through our One Company restructuring initiative, we have laid the foundation for a much reduced cost structure, improved profitability, enhanced customer responsiveness and accelerated decision-making that will positively impact our overall competitiveness.”

Hake said that the One Company initiative announced in June, which integrated Maytag Appliances, Hoover floor care and Maytag‘s corporate headquarters, will transform the organization into a faster, leaner and more unified Maytag. Earlier this week, Maytag announced the implementation of a pay freeze and a voluntary separation program designed to cut costs.

“While this initiative brings with it many changes, our strategy remains a constant,” Hake said. “Innovative products, preferred brands, best-in-class quality and best-in-class costs are the key to future profitable growth.”

At the conference, Maytag executives outlined plans to achieve improved earnings in 2005, expected by the company to be in the range of $1.50 to $1.60 per share, including 5 cents per share in restructuring and related charges. This shows marked improvement over full-year 2004 earnings per share.

Hake told analysts that Maytag is on track to achieve $150 million in annual savings from the One Company restructuring.

“An additional $30 million in annual savings is expected as a result of our new refrigeration strategy now in place,” he said.

Maytag has broadened its focus beyond North America as the company expands global sourcing opportunities.

“We will achieve cost improvement and become more market-responsive as a result of accelerated global procurement, the start-up of a China design center to supplement existing R &D resources, and product supply partnerships with Asian companies,” Hake said.

George Moore, Maytag‘s executive vice president and chief financial officer, pointed out that aggressive cost-saving initiatives and appliance pricing increases have been implemented to help offset steel and fuel cost increases, which continue to pressure profitability.

“Net debt levels have decreased, and we have consistently generated strong cash flows,” Moore said.

The company demonstrated its commitment to product innovation by citing the numerous launches over the past year, including:

* Maytag, Amana and Jenn-Air French door bottom-freezer refrigerators

* Maytag Double Oven ranges

* Jenn-Air Dual-Fuel ranges

* Jade wall ovens

* Neptune Top Load washers

* Neptune Drying Center

* Maytag compact front load laundry

* Maytag and Jenn-Air stainless steel tall-tub dishwashers

* Hoover Agility extractors

* SkyBox by Maytag Rookie mini refrigerators with customizable front panels

* Dixie-Narco ice cream venders and snack venders.

Among planned, upcoming product launches are Jenn-Air glass front refrigerators and dishwashers, additions to Maytag high efficiency laundry offerings, Jade residential cooking products and refrigeration, Jenn- Air small appliances, additions to the popular SkyBox by Maytag line, Hoover extractors, hard surface cleaners and high-end vacuum cleaners.

Maytag‘s investment community conference was webcast over the Internet. A replay of the conference will remain available online through Nov. 23 on the Corporate News Center of Maytag‘s Web site, , under “CEO Presentations.”

Maytag Corporation is a $4.8 billion home and commercial appliance company focused in North America and in targeted international markets. The corporation’s primary brands are Maytag, Hoover, Jenn-Air, Amana, Dixie-Narco and Jade.

Maytag declares quarterly dividend

November 18, 2004
Maytag declares quarterly dividend
Date November 18, 2004
Section(s) Business
The Maytag board of directors declared a quarterly dividend of 18 cents a share on the firm’s common stock. The dividend is payable Dec. 15 to shareowners of record at the close of business Dec. 1.

Jenn-Air gas ranges recalled

November 18, 2004
Jenn-Air gas ranges recalled
Date November 18, 2004
Section(s) Business
(AP) — Maytag Corp. has recalled more than 1,100 of its Jenn-Air gas ranges because switches are too close to the gas tubing, resulting in a fire hazard, the U.S. Consumer Product Safety Commission announced Wednesday.

The recall includes built-in models of the Jenn-Air Downdraft Gas Cooktop, model JGD8348CDP.

The CPSC reported that the switches installed too close to the gas tubing can cause electrical arcing, leading to a gas leak.

Maytag has received four reports of the range catching fire as a result of a gas leak. No injuries were reported.

The ranges were manufactured between January and September 2004 and sold for about $2,000. The model name is printed on a label on the vent fan housing, which is in the cabinet under the cooktop.

Customers who purchased one of the ranges should contact Maytag to schedule a free, in-home repair, the CPSC said.

Consumers should stop using the grill or burners activated by the two left hand controls until the repair is done. The center and right hand burners can be used.

Customers can call Maytag Corp. at (888)-330-3810.

Maytag offers voluntary separation program

November 18, 2004
Maytag offers voluntary separation program
Date November 18, 2004
Section(s) Local News


Maytag announced to its salaried workforce on Wednesday a new voluntary separation program, an extension of its One-Company restructuring effort announced in June.

Maytag spokesperson Lynne Dragomier said the program is open to all salaried employees within its “One Company organization.” Early this summer, Maytag announced plans to incorporate Maytag Corporate, Hoover and Maytag Appliances operations under one umbrella as part of a restructuring program that will eventually eliminate 20 percent of its salaried workforce and reduce costs by an expected $150 million annually.

Dragomier would not specify an exact number of positions planned for elimination through the voluntary separation agreement. She said the goal of the program is total cost reduction rather than number of jobs.

“We analyzed our costs for the remainder of the year and 2005 and determined the need to take additional action to achieve our cost improvement plan,” Dragomier said. She also noted the continuing rise in raw material and energy related items as impacting Maytag‘s bottom line.

Dragomier said employees will have “several weeks” to determine whether they would like to participate in the program. She said similar separation benefits as given to those employees already terminated by Maytag would be provided under the program.

“We realize these reductions are difficult and this is providing some choice to employees,” she said.

Dragomier would not speculate on what might happen should the cost reduction efforts sought under the program not be met.

Maytag‘s One Company restructuring program is continuing with approximately three-fourths of the estimated 1,100 positions planned for elimination completed as of the end of October. The company expects the remaining positions from its North Canton, Ohio, and Newton operations to be eliminated by the end of the year.

Dragomier also said Maytag has “decided to defer salary increases for a period of time” to its employees. She would not say how long the wage freeze will remain.

On Friday, a number of Maytag executives will meet in New York City with members of the investment community to outline its business activities and plans for the future.

One item sure to be discussed is Wednesday’s announcement of the merger of Kmart and Sears. The retailers are two of Maytag‘s biggest customers. In addition to Hoover vacuums it sells through both outlets, Maytag manufactures a line of Kenmore products for Sears.

Dragomier would not comment on the retail merger or how it might impact Maytag. The stock rose 59 cents to $20.59 on Wednesday but was down nine cents in trading this morning.

Friday’s analyst’s meeting can be heard live beginning at 7:30 a.m. through the Corporate News Center on Maytag Corporation’s Web site under “CEO presentations.”

Maytag stock surges on strong outlook

November 10, 2004
Maytag stock surges on strong outlook
Date November 10, 2004
Section(s) Local News
NEWTON (Dow Jones/AP) — Maytag Corp. said price hikes and cost cutting could help it earn $1.50 to $1.60 a share in 2005, well above what the company is likely to earn this year.

The Newton-based appliance maker Tuesday said its forecast includes restructuring and other charges of about 5 cents a share.

Analysts were expecting 2005 earnings of $1.59 a share, according to Thomson First Call.

New York Stock Exchange-listed Maytag shares closed Tuesday at $20.27, up $1.74, or 9.4 percent, with more than 4.7 million shares traded. At 10 a.m. today, the stock had dropped 25 cents to $20.02.

Maytag has suffered in recent quarters from high steel and energy costs as well as declining sales by its Hoover vacuum cleaner unit.

Last month the company said it expects to earn 5 cents to 10 cents a share in the fourth quarter, on top of a profit of 6 cents a share for the first nine months of 2004.

On Tuesday, Maytag said cost cutting, as well as price increases, including a 5 percent to 8 percent hike effective on Jan. 3, would help revive its business.

“We completed many milestones in 2004,” said Maytag Chairman and CEO Ralph Hake, “including a successful systems conversions, a plant closing and good progress in cost reduction and, in the third quarter, saw positive sequential improvement in our financial performance. However, 2004 has been a challenging year related to Hoover floor care sales volumns and, more particularly, with the rapid increases in steel and energy-related costs.”

Maytag plans to hold a conference with analysts on Nov. 19 in New York City where it will update investors on business operations and plans for the future.

About 50 workers recalled to Maytag’s Newton plant

November 5, 2004
About 50 workers recalled to Maytag’s Newton plant
Date November 05, 2004
Section(s) Business
Over the course of the last three weeks, Maytag has recalled about 50 laid off workers at it production facility in Newton.

Maytag spokesperson Lynne Dragomier said the recalled workers are filling vacancies at the plant and filling production support needs at the washer and dryer production plant.

In late September, approximately 190 production workers were laid off from the Newton production plant.