Maytag’s Interim CEO Stops Rumors--Almost

It has been more than a month since Lloyd Ward resigned as Maytag Corp.’s chairman and chief executive, but workers--many of whom believed Ward was asked to leave--say their relief is still fresh.

“There was just a collective roar” on the assembly line when workers heard the news about the resignation, said Doug Bishop, who has worked at Maytag for three years. “It’s like a 10-ton weight was lifted off our shoulders.”

The 3,400 Maytag workers in Newton--about a quarter of the town’s population--had been worried by nagging reports that the company would be moved to Chicago or Dallas. The rumor mill also buzzed with news that it would be sold to Sweden’s Electrolux.

Leonard Hadley, who came out of retirement to be interim president and CEO, put a quick kibosh on the scuttlebutt, saying last month that plans to move the company out of Newton are over as long as he’s at the helm.

Bishop, a third-generation Maytag employee, said he and other workers are reassured now that Hadley has returned to lead the company, one of the nation’s largest makers of household and commercial appliances under the Maytag, Jenn-Air, Magic Chef and Hoover brands.

“Granddad retired in ’53. Dad worked there during the ‘50s. Hopefully, my children will have an opportunity to be here another 20 years,” he said.

While the Jasper County Courthouse stands tall in Newton’s town square, Maytag headquarters overshadows it with layers of offices and a steaming plant just to the northwest.

“Maytag is Newton, and Newton is Maytag,” Fran Sutphin, 61, said while working at the downtown Newton children’s clothing store, Kids Connection. Her husband, Dan, works for Maytag.

Hadley, Maytag’s CEO and president from 1993 to 1999, had worked for the company for 40 years. While his return was applauded by workers and townspeople, it also supported speculation that Ward had been ousted.

“Ultimately, I think the board just decided that the change had to be made and he was let go,” said David MacGregor, an analyst with Midwest Research Institute in Kansas City. “I don’t know that for a fact.”

MacGregor bases his conjecture on the drop in stock price and a lagging financial performance after Ward took over.

“They started missing their consensus estimates on the street. They had four or five misses in the seven quarters that Lloyd was chief executive officer,” he said.

Board member Lester Crown, a large Maytag shareholder, wouldn’t discuss why Ward may have lost his job.

“Everything that has really happened there really has been reported to the press and to the public, as it should be,” said Crown, chairman and chief executive of Chicago-based Henry Crown and Co. “And everything that’s been reported--that’s exactly as it’s been.”

Maytag spokesman Jim Powell wouldn’t comment, and repeated phone messages left at Ward’s home were not returned.

When Ward resigned in early November, the company attributed the reason to “a difference with the board of directors over the company’s strategic outlook and direction.”

“Maytag is a great company and franchise,” Ward said at the time. “And I certainly wish them well.”

Ward couldn’t shake the outsider label, workers said. He had been hired away from PepsiCo Inc., where he had been president of Frito-Lay’s central division, in 1996.

When Ward, 51, was named chairman and CEO on Aug. 12, 1999, he took over a company that was posting record results that helped drive its stock price up to nearly $75 a share, nearly quadruple their level five years earlier.

About a month later, Maytag warned analysts that its third-quarter earnings would not meet estimates because of slumping sales of its lower-priced goods. The company’s stock price dropped 26% and has continued to struggle.

Last month, the company warned that fourth-quarter earnings would be only half of the expected 82 cents per share, and the stock took another hit. On Jan. 3, it closed at just under $32.

“I don’t think Lloyd ever fully understood Wall Street,” MacGregor said. “And I think Wall Street, to be fair, never fully understood Lloyd either. And, ultimately, that may have been the root of his demise.”

Ward lost the community’s trust when there was talk of hiring another company for clerical staff at Maytag, said Pat Teed, president of the United Auto Workers local that represents workers on the Maytag assembly line.

It “put a price tag on the community,” he said. “If we’re going to protect our tradition and our heritage . . . that’s not for sale. It’s home.”

Teed said the workers are hoping Hadley, 66, will stay.

“I think it’s going to be extra hard for the next guy to get the trust from the people. If Hadley stays around, that’s a plus,” he said.

Kenny Meyer, an inspector at the Maytag factory, was found taking a lunch break at a local Maytag workers’ hangout, Scoreboard Bar and Grill. He believes Ward was asked to leave, but said Ward is not to blame for everything that has happened to Maytag.

“He’d come in at a bad time,” said Meyer, who has worked for the company for 25 years. “Ten years ago, if he would have come in, it would have been a good change, probably.”

On the Net: https://www.maytag.com