- The Washington Times - Wednesday, May 10, 2006

From combined dispatches

GRAND RAPIDS, Mich. — Whirlpool Corp., the world’s largest appliance maker, said yesterday it will eliminate 4,500 jobs by closing three plants and consolidating corporate offices and other sites in the wake of its purchase of rival appliance maker Maytag Corp.

The moves come less than six weeks after Whirlpool completed its acquisition of Maytag, extending its lead as the nation’s biggest appliance maker with brands that include Whirlpool, Maytag, KitchenAid, Jenn-Air and Amana.

Federal antitrust regulators raised no objection to the combination.

The cuts represent 5.6 percent of Whirlpool’s current work force of about 80,000 employees. But Whirlpool said it will add about 1,500 jobs, many at two Ohio plants, reducing the net loss of jobs to 3,000 positions, or 3.8 percent of its work force.

The Benton Harbor-based appliance maker plans to close washer and dryer plants in Newton, Iowa; Herrin, Ill.; and Searcy, Ark. Laundry manufacturing sites in Clyde, Ohio, and Marion, Ohio, will absorb the production, Whirlpool spokesman Daniel Verakis said.

Newton had been home to Maytag for almost 100 years.

Also slated to close are Maytag’s corporate headquarters and research center in Newton, as well as administrative offices in Schaumburg, Ill., Canada and Mexico.

Whirlpool Chief Executive Officer Jeff Fettig, who took over Maytag to dominate the appliance industry, said yesterday the company wants to “rapidly restore the competitiveness of the Maytag brands.” Before Whirlpool bought the company, Maytag posted losses for two consecutive years.

“The key is how they’ll position the brands,” said Mirko Mikelic of Fifth Third Asset Management, which has $21 billion in assets including Whirlpool bonds. “The plant closings are one thing, but they have some brands that aren’t selling well but do have a long history.”

Shares of Whirlpool fell 92 cents to $92.17 at 4 p.m. in New York Stock Exchange composite trading. The company said it was delaying filing its quarterly financial report with the Securities and Exchange Commission and that it would need a five-day extension because of the merger.

Maytag was slow to move production to lower-cost countries and improve the efficiency of its U.S. factories amid competition from China and South Korea. Its hometown Newton plant was running at 40 percent of capacity.

The Newton factory, which employs 1,000 workers, down from 2,600 six years ago, will continue production into 2007, the company said. Maytag is the largest employer in the town of 16,000, located about 40 minutes east of Des Moines, Iowa. Frederick Louis Maytag sold his first washing machine there in 1907.

The factory in Herrin, which employs 1,000 people, will continue production until the end of this year, as will the plant in Searcy, which has 700 workers.

Whirlpool still has to negotiate closing terms with unions at the Newton and Herrin plants. The Searcy plant is nonunion.

The 4,500 positions to be cut include 1,800 salaried jobs, but several hundred people at the affected offices will be offered posts at other Whirlpool locations, the company said.

Whirlpool said it will cost an estimated $135 million to $145 million for severance payments or relocation expenses for administrative employees under the consolidation.

No estimate was available on manufacturing job elimination costs. Non-employee costs will be about $30 million, the company said.

Whirlpool paid about $1.7 billion in cash and stock to buy Maytag on March 31. It also assumed about $900 million in debt that boosted the total value of the transaction to $2.6 billion. Chinese competitor Haier America had offered $1.28 billion for Maytag, but the offer was withdrawn after a higher bid from Whirlpool.

In seeking antitrust approval for the acquisition, Whirlpool argued that growing foreign competition from makers such as Haier, LG Corp. of South Korea and Sweden’s Electrolux would keep it from raising prices.

Eight former Maytag plants remain, including two Hoover factories and one each making Dixie-Narco and Jade products, Whirlpool said.

“Perhaps Whirlpool thought it was buying just a name when it bought Maytag,” UAW Region 4 Director Dennis Williams said in an e-mailed statement. “But people have always been the most important ingredient in Maytag’s success. It is Maytag people — and the communities where they work and live — who will suffer as a result of today’s announcement.”


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