Published: Monday, June 26, 2006
Maytag closing means more than loss of jobs
Dire residual effects are expected from the shutdown.
NEWTON, Iowa (AP) William Montgomery and more than 1,700 other central Iowa workers depend on their jobs at Maytag, a company that has worked for decades to make its name synonymous with dependability.
Montgomery, 58, has spent the last 20 years of his life assembling washers and dryers, most recently the company's traditional Dependable Care models. The address of the company's headquarters is Dependability Square.
Montgomery, his co-workers and the Newton community can no longer depend on Maytag.
One of North America's most recognized appliance makers since the early 1900s, Maytag was bought by Whirlpool Corp. in March and ceased to exist as a stand-alone company. Maytag is now just one of many brands in the portfolio of Whirlpool, the world's largest appliance maker.
Forty-one days after they closed the deal, Whirlpool officials announced they would shut down Maytag operations in Newton. There had been some hope in the town that while the headquarters might be closed, the factory would remain open.
Absorbing Maytag and wringing efficiency out of the combination of the two manufacturers was essential to fulfilling Whirlpool's expectations of shedding about $400 million in costs, Whirlpool officials said.
The move means Maytag's hometown of Newton, 35 miles east of Des Moines, is left without the company that was its heart and soul for a century. Newton and Maytag have together weathered depressions, recessions and wars.
Frederick L. Maytag arrived in central Iowa in 1867 at age 10 in a covered wagon with his German immigrant parents, Daniel and Amelia Maytag. They left Cook County, Ill., to establish a farmstead north of Newton.
F.L. Maytag worked on the family farm until his mid-20s, when he took a job with a Newton farm implement company. At 37, he started his own implement company to make safer threshing machines that minimized farmer injuries.
The company began making wooden-tub washing machines to supplement revenue in the winter months when farm equipment sales slowed. From there, a world appliance leader was born, and its broad influence became tightly woven into the fabric of Newton.
Whirlpool has begun laying off headquarters workers. The factory will be shut down by October 2007. Those workers won't know for a while what kind of severance package they'll be offered. Maytag workers still employed in Newton are those with about 13 years of seniority. They make about $40,000 a year, get a retirement pension and health care insurance.
But a broader affect on Newton also is a concern.
School officials have said they already have 50 fewer students enrolled next year and expect more as families leave. When Maytag paychecks stop, so does spending at local retailers.
The Maytag shutdown will leave vacant two massive factories, the corporate headquarters and nearby buildings, on which the Jasper County treasurer's office said Maytag pays $1.7 million in property taxes every year. It's unclear whether Whirlpool plans to seek a reduction in valuation once the buildings are vacant.