Loss of Maytag Puts a Big Wrinkle in Iowa Town
William Montgomery and more than 1,700 other central Iowa workers depend on their jobs at Maytag, a company that has worked for decades to make its name synonymous with dependability.
Montgomery, 58, has spent the last 20 years of his life assembling washers and dryers, most recently the company’s traditional Dependable Care models. The address of the company’s headquarters is Dependability Square.
Montgomery, his co-workers and the Newton community can no longer depend on Maytag.
One of North America’s most recognized appliance makers since the early 1900s, Maytag was bought by Whirlpool Corp. in March and ceased to exist as a stand-alone company.
Maytag is now just one of many brands in the portfolio of Whirlpool, the world’s largest appliance maker.
Forty-one days after they closed the deal, Whirlpool officials announced that they would shut down Maytag operations in Newton, leaving workers at the factories and company headquarters without jobs. There had been some hope in the town that although the headquarters might be closed, the factories would remain open.
Absorbing Maytag and wringing efficiency out of the combination of the two manufacturers was essential to fulfilling Whirlpool’s expectations of shedding about $400 million in costs, Whirlpool officials said.
The move means that Newton, 35 miles east of Des Moines, is left without the company that was its heart and soul for a century. Newton and Maytag have together weathered depressions, recessions and wars.
Frederick L. Maytag arrived in central Iowa in 1867 at age 10 in a covered wagon with his German immigrant parents, Daniel and Amelia Maytag. They left Cook County, Ill., to establish a farmstead north of Newton.
Frederick Maytag worked on the family farm until his mid-20s, when he took a job with a Newton farm-implement company. At age 37, he started his own implement company to make safer threshing machines that minimized farmer injuries.
The company began making wooden-tub washing machines to supplement revenue in the winter months, when farm equipment sales slowed. From there, a world appliance leader was born, and its broad influence became tightly woven into the fabric of Newton.
Frederick Maytag gave the community a densely timbered 40-acre park with a community swimming pool and bandstand, where hundreds of families frequently gather for picnics and to swim. He built a hotel, theater and other public facilities in Newton in addition to hundreds of homes, which he sold to employees at reasonable terms.
Those contributions benefit Newton, but it’s the generations of Maytag jobs that fueled the economy of this small town of just under 16,000 people surrounded by farm fields.
Whirlpool has begun laying off headquarters workers. The factories will be shut down by October 2007. Those workers won’t know for a while what kind of severance package they’ll be offered and many are unsure what they’ll do next.
“I really don’t have a clue,” Montgomery said. “I’m too old to build another retirement and if they rip away our health insurance, I really don’t know what I’m going to do.”
Maytag workers still employed in Newton are those with about 13 years of seniority. They make about $40,000 a year and receive healthcare insurance and a pension.
For Greg Christy, 51, who has 22 1/2 years at the plant, the prospect of retraining for a new job is scary.
“For me to live on 300-and-some-odd dollars a week of unemployment and go to school at the same time, that would be difficult,” he said. “Right now it would be difficult, but I am considering that.”
A broader effect on Newton also is a concern, he said.
School officials have said they have 50 fewer students enrolled next year and expect more to leave as families move away. When Maytag paychecks stop, so does spending at local retailers.
“Maytag has been very intertwined with the community, so that collateral damage to the smaller stores and storefronts is going to be major,” Christy said.
The Maytag shutdown will leave vacant two massive factories, the corporate headquarters and nearby buildings. Maytag Plant 1 and its surrounding property in the center of town occupies 30 acres of land and encloses more than 1 million square feet of factory space. Plant 2, built in 1949 but expanded several times over the years, encloses 2 million square feet of factory and warehouse space on 175 acres on Newton’s north side.
The Iowa Department of Economic Development is working with Newton and Whirlpool to assess possible future occupants for the buildings, agency spokeswoman Tina Hoffman said.
The Jasper County treasurer’s office said Maytag paid $1.7 million in property taxes every year on property it owns. It’s unclear whether Whirlpool plans to seek a reduction in valuation once the buildings are vacant.
Regardless of the effect of the closures, Montgomery believes that Newton will survive.
“I think there’s going to be a very long black period of time,” he said. “I think we’ll recover, but it’s going to take time.”