Des Moines Register
05-12-06
Maytag leaders blamed; 'Our labor couldn't fix it'
Union leader says plant became outdated
By WILLIAM RYBERG
REGISTER BUSINESS WRITER
Newton, Ia.
— The union leader at Newton's Maytag washer/dryer factory blames past Maytag management for the plant's closing.
"My quarrel is not with Whirlpool," said Ted Johnson, president of United Auto
Workers Local 997 in Newton. "It was a business decision that they felt they had to make."
It would have been costly to get the plant back up to snuff because Maytag had allowed it to become outdated and underused, Johnson said in an interview.
He also said there's nothing the union could have done in the past or present to save the factory. He assigns most of the blame to Maytag's board of directors and Ralph Hake, the last Maytag chairman and chief executive before the company was purchased by Whirlpool.
Maytag officials, who could not be reached for comment, had maintained that the company fell into hard times because it was an undersized domestic manufacturer, competing against large, well-financed global companies that can import products from low-cost countries.
Whirlpool announced Wednesday that the Newton factory would close by late
2007 as part of the integration of Maytag operations into the combined business.
The work will be transferred to two nonunion Whirlpool plants in Ohio, described by Whirlpool as the most efficient in the world.
Newton employees returned to work Thursday, after Whirlpool gave them the day off because of Wednesday's announcement.
"There's a lot of fear, anxiety and anger" among union members, Johnson said.
The most common question is about the severance package. Details aren't available because Johnson must work out the package in negotiations with
Whirlpool, he said.
As head of the union, Johnson represents about 900 active workers at the factory and 500 on layoff. The union contract also covers about 1,400 retirees and 600 spouses of deceased former Maytag workers.

His role now will include working with state and federal officials to ensure that workers get benefits, such as retraining.
Johnson said he doesn't like the decision to close the factory, but understands it.
"While Maytag was making wrong business decisions, Whirlpool was making right business decisions and investing in their plants," Johnson said.
Mike Ralston, president of the Iowa Association of Business and Industry, said
Whirlpool indicated its decision was based on the condition of the Newton plant.
It appears that there's nothing the union could have done, said Ralston, whose group lobbies on behalf of manufacturers.
Whirlpool never approached the union about contract concessions as a way to save the plant, Johnson said. "It's clearly not a labor issue, which also means our labor couldn't fix it," Johnson said.
The union went on a three-week strike in 2004, but only to try to reduce the severity of concessions that the company was seeking in a new contract,
Johnson said.
The union didn't take pay cuts, but did agree to reduced health care benefits and reductions in future pension coverage.
Peter Orazem, an Iowa State University economist , said the company complained at the time that it needed to cut costs, but the union may have seen the comments as a bargaining tool.
"There was no sense of urgency on the part of labor," Orazem said. "But, by that point there was nothing that could be done that could turn the firm around."
Johnson said Maytag's mistakes included spending about $60 million to convert a South Carolina stove factory into a laundry plant, only to close it three years later at the cost of another $55 million.
Jennifer Sherer, a labor educator at the Labor Center at the University of Iowa, said fault in many ways lies with international trade policies that encourage companies to manufacture products in countries with the lowest wages.