Whirlpool Announces Steps to Integrate Maytag Operations
May 10, 2006
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Whirlpool Corporation announced a series of changes within its North American organization relating to the integration of Maytag operations.
Locations affected by the changes include three manufacturing sites: the former Maytag corporate headquarters, a research and development (R&D) center in Newton, Iowa, U.S., and administrative offices in Illinois, U.S., Canada and Mexico.
Approximately 4,500 positions will be eliminated as a result of the changes. However, Whirlpool will create about 1,500 positions at other locations. A total of 3,000 positions will be eliminated after all changes are complete. Whirlpool said the number and location of new positions will be announced in the near future.
"We are taking these actions to rapidly restore the competitiveness of the Maytag brands," said Jeff M. Fettig, Whirlpool chairman and CEO. "This is an important step in our integration process that will allow us to drive continuing performance improvements and will better align our brands, products and operations with the markets we serve domestically and globally."
Today’s announcement includes plans to consolidate laundry washer and dryer production from Maytag manufacturing sites in Newton; Herrin, Illinois, U.S.; and Searcy, Arkansas, U.S. with Whirlpool laundry factories in Clyde and Marion, Ohio, U.S. The moves are said to build upon the efficiency of Whirlpool’s manufacturing capabilities and enhance its ability to compete within the highly competitive global home appliance industry.
Whirlpool says the changes follow an extensive review of Maytag operations, and the company’s commitment to quickly communicate any operational decisions regarding future employee status.
The factory in Herrin, which manufactures washers and dryers and employs about 1,000 workers, will continue production until the end of 2006. The factory in Searcy, which manufactures dryers and employs about 700 workers, will also continue production until the end of 2006. The factory in Newton, which manufactures washers and dryers and employs about 1,000 workers, will continue production into 2007.
Maytag administrative offices will be consolidated in the U.S. –- from Newton to Whirlpool headquarters in Benton Harbor, Michigan, and other Whirlpool locations; in Canada -- from Burlington to Mississauga; and in Monterrey, Mexico where both companies have offices. The Newton-based R&D center and the administrative office of Maytag International, based in Schaumburg, Illinois, U.S., will also close.
Approximately 1,800 salaried positions, included in the 4,500 affected positions, will be eliminated as a result of the changes. Several hundred employees from the affected administrative offices are expected to be offered jobs in other Whirlpool locations.
Whirlpool said its review of Maytag will continue, and further decisions related to office facilities are expected in the future.
The preliminary estimate of termination and relocation costs resulting from consolidation of Maytag administrative offices is approximately U.S. $135 million to $145 million. Non-employee exit costs associated with laundry facility closings are approximately $30 million. Whirlpool said it is unable to estimate, at this time, the termination costs associated with the manufacturing facility closings. Costs associated with the announcement will be recognized as an assumed liability and accounted for as part of the purchase price for Maytag in accordance with generally accepted accounting principles.
"Our manufacturing sites in Clyde and Marion are two of the most efficient facilities in the world, with capacity to grow," said David L. Swift, president, Whirlpool North America. "This was a difficult, but necessary decision that will further improve the cost efficiency of our laundry operations, providing consumers with industry-leading innovation and competitively produced washers and dryers from U.S.-based manufacturing locations."
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