Maytag, Hoover, Jenn-Air, and Amana

(Atlanta, Georgia) Maytag Corporation, encompassing brand names Hoover, Jenn-Air, and Amana, is overhauling its entire operation with a goal of renewing its competitive stance in the marketplace. An estimated 20% of the workforce (1,100 jobs) will be cut, many as a result of consolidating white-collar corporate oversight and management of all divisions at Maytag headquarters.

Still smarting from last month's announcement by the Timken Company of its plan to restructure with a loss of 1,300 jobs at a manufacturing plant in Canton, the state of Ohio is being struck again. Hoover R&D and manufacturing will remain in Ohio, however, headquarters operations will move to Newton, Iowa, the Maytag corporate home. In all, about 500 jobs will disappear from the Hoover home in Canton with the other 600 being cut from Maytag headquarters and the appliance divisions. Also included in the restructuring will be the closing of a refrigerator plant in Galesburg, Illinois, with some of its functions moving to Mexico.

According to Maytag Chairman and CEO Ralph F. Hake,

"Maytag has made significant progress in product portfolio, brand position, process improvement and quality trends. The restructuring announced today will leverage those strengths for improved performance in the highly competitive global marketplace of the major appliance and floor care industries and help us grow operating income."

Translation - we're getting killed because competitors sell for less so our costs have to be cut.

Two aspects of the Maytag plan are worthy of comment. One is that through bureaucratic inertia or lack of executive oversight, Maytag hasn't changed with the marketplace. Over at least the past decade, there have been many signals that successful companies in the 21st Century would need to stave off the business pressures from globalized competition. A mantra of "cut costs, cut costs, cut costs" should have been included in its everyday and strategic business planning. Apparently, it wasn't and, as a result, instead of minor ongoing enhancements to efficiency, Maytag has to undergo major surgery. Unfortunately, major surgery is often necessary because companies allow themselves to operate on cruise control, relying on past success as an indicator of the future. Look around, people, it doesn't work.

The restructuring of Maytag, along with Timken and others, is also notable with regard to the impact on Ohio. It's not good and is sure to be a significant factor in the November elections. My personal belief is that the problems of Maytag, Timken, and others emanate from the marketplace. These companies would have the same problems despite the political party in power.