Maytag to Shut Plant, Realign Businesses

Maytag Corp. said Friday that it will close its kitchen-range plant in Indianapolis and realign its major home appliance businesses under one unit to improve efficiency and become more competitive.

The No. 4 U.S. appliance maker has been streamlining operations after a period of aggressive expansion. The latest moves will result in a $50-million charge this year and should save $35 million annually, the company said.

“We are streamlining the corporation to deliver better results and to do a better job of meeting our customers’ needs,” Leonard Hadley, Maytag’s chairman and chief executive, said in a statement.

The company plans to close its Indianapolis Jenn-Air plant by year-end and consolidate Jenn-Air production at a plant in Cleveland, Tenn. Some of the 860 employees in Indianapolis will be offered transfers, the company said.

Newton, Iowa-based Maytag, which has about 16,300 employees worldwide, said it will also consolidate its two major appliance units into one. The single unit will oversee Maytag’s four major home appliance brands: Maytag, Jenn-Air, Magic Chef and Admiral.

Maytag shares were up 12.5 cents at $20 on the New York Stock Exchange.

The company is being forced to cut costs in the highly competitive market for home appliances in North America, said John Curti, an analyst who follows Maytag for Securities Corp. of Iowa.

“The business, at least in North America, is mature. There’s not a lot of unit growth, so you’ve got to work on your costs,” Curti said. “They’re doing pretty well in a real tough market.”

However, the primary reason for the restructuring is not to reduce costs, but to improve efficiency and provide more support for the company’s field sales force--a key strength at Maytag, Hadley said.