The Town Maytag Left Behind

One Midwestern Town Has Been Hurting Since Whirlpool Bought Maytag

(CBS)  At the dawn of the 20th century, Newton, Iowa was the "Washing Machine Capital of the World." Half a dozen manufacturers were turning out the latest contraptions. But the largest by far was Maytag.

Over the years the competition died away, leaving Maytag to Newton, and Newton to Maytag.

There's a park here that bears the name, and a concert bowl. Signs all over herald the quintessential company town, and the beloved family that helped it thrive.

And thrive it did. With its 30 churches, its cozy downtown, and its Midwestern passion for high school football, Newton is right out of Central Casting: a storybook small town … except for one thing.

If you pass the fields of corn and the neat neighborhoods that border them and head down to the intersection of 19th Avenue and 8th Street, you'll find the Maytag plant. The soon-to-be-closed Maytag plant.

Last year the Whirlpool Corporation bought Maytag - washer, dryer and all.

"We looked at every element of the business here in Newton," Whirlpool's Jeff Noel told CBS News correspondent Dean Reynolds. "We did the evaluations that we needed to do, because our commitment is best cost, best quality, best distribution."

"If you look at what the Maytag brand and the Maytag operations could afford for our company, we felt like it was a perfect mix."

That "perfect mix" does not include Newton.

At its peak Maytag employed more than 3,000 people here in Newton. That's more than one out of every five persons in town. But today only a few hundred still work here at the cavernous plant. And by the end of this week, they'll be gone, too.

"I think it is a nightmare," said Mike Duffus, who put in 34 years at the plant. "Most of the people would say that they, if you were to cut them, they would bleed blue - Maytag blue."

Of course, many of us may remember that Maytag blue from those "Lonely Repairman" commercials. However, Maytag was founded long before "Ol' Lonely" made his debut.

In 1893, Frederick Louis Maytag - affectionately known as F.L. to town folks - arrived in Newton from Illinois. He started up a farm equipment company and not long after, began making the product that put Newton on the map.

Town historian Leland Smith worked at Maytag for four decades. Now, he's on the board of the historical society, and knows every inch of its Maytag wing by heart. He showed us a collection of washers and dryers to reflect almost every taste and time, like the first Maytag washer, the "past time washer," made in 1907.

The Maytag family sold the appliance business back in 1962, though they still run the Newton farm that turns out their famous blue cheese. But the company's reputation for dependable appliances endured.

"We made good wages there, but we also made a good product," said Carl Repp, who worked at the plant for 30 years. He remembers when Maytag set the standard. " They call us the dependability people. I mean, that was kind of the motto we went by for many years."

"From the beginning, F.L. Maytag understood that delivering on the promise, putting his mouth where his money was, was really critical and he did that," said Nancy Koehn, a brand historian at Harvard Business School. "There really isn't another appliance that has that special place, that real estate if you will, in customers' hearts and heads like Maytag."

Of course, it wasn't just customers who relied on Maytag dependability. David and Lori Daehler bought their dream home thanks to his job at the plant. He was laid off in last year. Lori had to take up housekeeping to help make ends meet.

"When I started working at the company 15 years ago, it was really hustling and bustling," David Daehler said. "We was working 24/7 at the first plant I worked in. And we couldn't put on enough product. Life was good. Four or five years ago things were really good with the company. And when things started going down, they really spiraled."

That's when Michigan-based Whirlpool entered the picture, seeing an attractive acquisition.

"First, it was an excellent company with a good suite of brands," Whirlpool's Noel said. "Now the fundamentals of the company had eroded. They needed to be fixed. They were losing money."

Down at the Midtown Café, waitress Kathleen Tiffany - herself a 30-year Maytag vet - says even before the plant shuts its doors, you can tell the difference. "We used to get all the Maytag office people in here, and now there's no Maytag office."

"Do you think the town will suffer?" Reynolds asked.

"Yeah, I think it will. You can't take the good paying jobs that they had out there and replace them with half the pay. And that's the jobs that we're getting here."

Still, while there is sadness over what the town has lost, you get the sense that Newton is a place with plenty of gumption.

"You know, everyone seems pretty positive, really that they'll move forward and life will go on," David Daehler said, who like a number of former workers, used government grants and job fairs to find new work outside town.

"Hopefully some new opportunities will come and it'll still be a good community," wife Lori added. "Because, you know, we want to stay here and raise our kids."

Maytag's former world headquarters has already been converted into the new home of Iowa Telecom, and a new speedway is providing a boost to the local economy.

Annette West of the Newton Chamber of Commerce, said, "It's not gonna be easy. I don't want to mislead anyone. It will be painful, very painful for some. Somewhat painful for all of us. But we are gonna be fine as a community."

Mayor Chaz Allen agrees. "We were one of the best work forces in the country, if not the world for a period of time," he said. "And we want that title back. These people out there want to produce and make things to the best of their ability."

By the way, though Maytag is gone from Newton, the brand name will live on, even though the machines will be made elsewhere.

And meet Clay Jackson: the "Lonely Repairman" circa 2007. "It's an exciting time for Maytag," Jackson said. "My role in that is to personify dependability and reliability by the way I live my life every single day."

"Dependability" and "reliability" are two understandably ironic words these days around Newton.

[aletadj]

I would love to invite you to be there on Friday the last day the the Maytag plant is open and see the support that the families and city of Newton give the people who worked there for so many years. I worked for Maytag for 12 years, I was laid off May of 2006. I go to school at Des Moines Area Commity College. My borther and friends will be one of those who will walk out those doors next Friday for the last time. Those steps out will be some of the biggest step some of them that they will ever take. Alot of people don''t understand the long days and hard work that we had to put in to that plant. The heat and the pain, so many of us had to enduro and some of the pains that will never go away. Maytag had aways of making you feel like family. And now the family has to go throught a divorce. Not by the kids choices, but by the greed of corporates acrossed this country. I thank you for taking the time to read.

[danstoned]

Iowans are voting Republicon these days. Republicons are the special interests party of Neocons and Corporate America. Most people that vote Republicon do so with their heads in the clouds. Just ask a Republicon why they vote for Fascism in America. A typical response is: "they were good enough for my daddy (a bigot and a hypocrit) so they are good enough for me." Newton, IA, you have gotten exactly what you voted for. Vote with your heads upyourass, and poof, you are out of a job.

[ghostcommand]

Excessive corporate greed will lead to "eleven cent cotton and forty cent meat". and "hey brother, can you spare a dime". Un-restrained-un-regulated capitalism is "Fascist Capitalism". What good will it do when the Fascist Capitalist have all the money and the people have none? Will they be able to buy what is being produced and imported from cheap labor markets? Maybe we could deficit spend like the Bush mis-administration-57% increase in the National Debt. Maybe we could have a spin economy?

[Tundrajack]

Well if our $1050.00 Maytag Neptune didn''t require $400.00 in repairs in 4 years.......

http://www.consumeraffairs.com/homeowners/maytag_wash.html

[luvcomments]

You have it right, aletadj

Big corporations whose main agenda is to take a short-term profit are doing this to companies with hard-earned, excellent reputations for superb products all across the country. Where they don''t lay off most of the employees - who actually believe they will become a part of something bigger and better - in fact, most will be gone in six months and the rest within a year later, some let go after their brains have been picked and the others because they''ve come to understand the agenda of the huge conglomerate. These outfits cut back to the bone, destroy the product, destroy the promised delivery schedules, slather an ''unreliable'' label on the name of the acquired product, and treat their employees like slime. It''s the new way of doing business. They don''t give a tinker''s cuss about the product or the people they acquired, only short-term gains fto boost the bookkeeping and how much they can sell their shares for. If that isn''t anti-American, what is?

[drr2amtx]

Local Republicon Christian conservative response: "We don''t care who''s in charge or what they do as long as they protect our earnings on investments." (With friends like that, who needs enemies.)

[myidoncbs]

"See, what you need to understand is, outsourcing is good. See, they take those jobs overseas that nobody here wants! And that leaves us free to compete for the high paying jobs. See, they can sell us stuff real cheap, so we can buy more stuff! Competition is good. Free markets is good. Outsourcing is good!" -- G. W. Bush (paraphrased, because I''m too lazy to look up the actual quote. But believe me, this is very close to what he said.)

[stevenga777]

3 years ago we bought a Maytag washer and dryer. The washer has never run right. Maytags are no longer the good quality they once were. They a pieces of ***. I find American workers to be lazy and immigrant and foriegn workers the most motivated to work hard and produce high quality goods.

[jowand]

I bought a MAYTAG dishwasher 1 year ago and it is a piece of junk. Won''t buy another MAYTAG anything, vote with your wallet

[mythoughtsr]

aletadj, I did take the time to read and I can''t imagine it. My father (in his late 70s) I think truly belonged to the last era of where a lot of companies cared about their employees. Now it''s all about profit and nothing about people. Many here are right, quality is going down. We have had our Maytag appliances repaired several times; we had the foresight to purchase "expensive" warrenties but they have more than paid for themselves. We do that with any appliances now. Our microwaves, cameras, dryers, refrigerators, you name it. Everything has electronic problems because of the way they are made now.

I feel sorry for your town and everyone else who has lost their job to ching chang junk.

[vampire1288]

i live near evansville indiana, where whirlpool makes refers , freezer etc. use to make air conditioners also and made all the sears brand appliances.. the dream of most of the local help was to get on at whirlpool. lots of small shops also supported whirlpool, wiring harness. motor mfr. 10 000 people owed their living to whirlpool. they had it all, good money, good working conditions, even had a wife swapping club.. on sat night... now they have closed plant 2[long ago]plant one was an old ww2 republic aviation plant.. the P47 was made there a really wonderful aircraft that can be considered a war winning airplane... harvester corp made m1 rifles for the korean war test fired them not too far from my home in the next county.. uses to be a joke """" how do you get 10 people in a volkswagon ????? answer tell them whirlpool is hiring... now less than 1500 work there and less and less each year... strikes, unrealistic wage demands, property taxes sky high, and we all wonder where all the jobs have gone...

[hypnotoad72]

stevenga777 - those parts assembled in the US. Were they made in America, or in another country?

[drivelphobe]

Whirlpool is headed down the path of destruction. Once a company decides that cost is the over-riding factor in the sale of their products, they have begun the death spiral. There is no way out.

The American consumer will pay more for quality, reliability and English speaking customer service. Give Whirlpool a year or so and they''ll be hurting.

It''s time the American consumer starts to boycott companies who chase the cheap and untrained labor market and offer subpar products on the false assumption that it''s good for business. Screw them.

[roach9703]

Mergers and Acquistions rarely solve business problems. They are often a disquised form of corporate liquidation when return on equity drops over time. Maytag lost its profitability. Whirlpool was unable to solve the problems of Maytag,aad end of story. The failure to take initative early can have terrible consequences in manaufacturing, a warning I echoed as a production supervisor back in the 1970s. The lack of immagination and drive of management has awful consequences for us all.

[ampsanne]

I have had both a Maytag washer & dryer in the past, and I never once had any trouble with them, After 20 yrs. they wore out, and two years ago I had to buy new, so bought a Whirlpool washer and dryer. I''d take back my Maytags any day. I think it goes back to Clinton days when NAFTA was brought into play. Just look how many of the American companies have moved out of this country, and taken their jobs with them. They don''t have to pay the high wages, and therefore we end up with inferior products. Put the blame where it belongs.

[antoniof123]

Well, welcome to the 21st centry folks. Where made any where beats the USA now. So get used to it, this has to do with greed one company outsources and they save then the next then the next until they all have to do it to compete. This has nothing to do with anything except for business greed. But not to fear in the end when we can''t buy anything anymore then they will all lose.

[macusweil]

How much did the company really save by dumping this town and their roots? Same thing can be said for Hersey, Pennsylvania. The theme park is there and lots of chocolate sounding names but the factory is gone. Sad day for the USA. Bush and the neo.cons have no desire to save American industry or the middle class. Elect Ron Paul for president in 2008. Let''s take back America!!

[omega39-2009]

If the people of Newton were interested in competing in the global economy, they would have set up housekeeping in cardboard boxes along side the factory and lowered their wage demand to $5 a day.

[alphaa10-2009]

Newton, Iowa is the latest casualty of an American economic policy driven by multinational corporate lobbies in Washington. Globalist policy made into American trade policy reduces the American industrial plant to a shadow of its former self.

NAFTA, negotiated by Bill Clinton, began the globalist agenda in earnest. Offshoring and plant closings only accelerated on the Bush watch.

Finally, however, globalism is getting a second, more critical look as a prospective world economic order. Apparently, some faults have been found.

Opposition to globalist policy is not an argument against modernization, or forces which overtake aging infrastructure. However, it is criticism of failure to adapt national economic policy to the interests of all Americans, instead of only multinational corporations.

Globalism says the world inevitably becomes a single factory floor. Wages race to the bottom, according to Ricardo''s principle of production gravitating to the location of lowest cost.

"Lowest cost", however, is not always the measure of economic success. Ultimately, an important economic goal is a good quality of life, and in a thriving, self-sustaining market.

Despite their pious statements about the world economy, many globalist firms receive government subsidy. Bush has been caught on several occasions endorsing globalism but practicing govenment subsidy, himself.

A starting point on the debate--
http://www.americaneconomicalert.org/view_art.asp?Prod_ID=863

[alphaa10-2009]

American industrial policy should help towns and regions hard-hit by plant closings to purchase the plants and make viable cooperatives out of them.

Workers and managers, engineers and marketers suddenly displaced by a plant/corporate closing have a powerful incentive to make their enerprise succeed.

Cooperatives are a variation of the collective management of a corporation. Cooperatives may or may not be managed entirely by "shareholders", ie. local investors in the town or region.

[usayesterday]

Now all of the (former) Maytag employees in Newton can impersonate the "Maytag repairman".

A sad story indeed.

[frb01]

It doesn''t matter where you are in this country, this has been occuring since the early 80''s. The first wave of these closings back then made the basis for the Billy Joel song "Allentown". back in the early 80''s.

[zharold]

Maytag corporation was a very good citizen. Its CEO%u2019s and managers lived in and around Newton, and the company funded parks, pools, scholarships and much more. Its wage earners worshiped in the same pew as the Department head. Executives and blue collar workers sang in the same choir. Newton is the ideal Midwestern town we all dream of living in. I know, having relatives and friends there.
Contrast that to Benton Harbor, the home of Whirlpool. It%u2019s a disaster area and I lay that directly at the door of the Whirlpool executives. They were more concerned with the dollar than the community, and still are. Maytag cared for Newton and its people or they would have moved their plant long ago, but they invested in and supported their community.
The problem is that you and most people buy only on price. Over the years that choice has caused the closing of Maytag and many, many other good companies.

Your money, your vote - there are always consequences. I have Maytags in my house, and I did not vote for a trillion dollar debt, a war based on lies, or for 3 thousand and increasing dead soldiers. There are always consequences.

[city4357]

WHERE are these jobs going? Who has these jobs now?How much money was the company losing there in Iowa? Did Reynolds ask for evidence that wages and expenses at this plant was so very high? How much has the price of Whirlpool machines dropped? Did CBS Correspondent Dean Reynolds ask ANY probing questions at all? Did Reynolds follow up to verify information given him by Whirlpool spokesmen? It does not appear so. This is not an investigative story. It is a story meant only to elicit emotion. Can we please have solid stories filled INFORMATION so that we can win arguments with our peers on facts rather than depend on appeals to emotion to sway opinion? You can see from the comments that people assume these manufacturing jobs went out of the country. But where? How much is Whirlpool paying these new workers? Do these new workers have health and retirement benefits? What environmental regulations is Whirlpool circumventing by removing manufacturing to another country? What transportation does Whirlpool use to bring the products back into the USA? Let''s have a real economic story.

[lostein]

Geez, CBS Sunday Morning, how could you not state where the jobs are going? Where will the machines be made? The quality of CBS reporting has really tanked. You were the last holdout to falling standards... well, I guess you joined the team at the bottom.

[ella121]

I grew up in Newton and my father put in 30 years and was proud of his work. I am proud of him. I have watched the demise of Maytag over the last 5 years and it breaks my heart to see what it''s done to my hometown. Those of you bashing Maytag just remember the take over from Whirlpool started a while ago and the quality issues aren''t related to the great workers in Newton who made Maytag great. It''s the large corporation that moved the manufacturing and looks more at costs than quality. Unfortunately, it''s hard to buy an appliance that isn''t owned by Whirlpool. It might not say Whirlpool but it''s likely if it''s not a GE product then it''s owned by Whirlpool.

It''s not the workers making bad products is the company having bad practices and bad equiment.

[frankko-2009]

The October 21st Sunday Morning article failed miserably in respect of explaining exactly why the plant is being closed: high union wages? outsourcing to another country? outmoded plant infrastructure? high transportation costs? Don''t leave us hanging, please add a brief explanation to a future program.

[dseffens]

I think you told only half the story when you just spoke of Maytag. The same poorly run management team and board of directors also ruined the Hoover Company in North Canton, Ohio. A brand name that was every bit as highly held and respected as the Maytag name. In fact, it should be criminal what that management team did to those two company''s employees, stock holders and the communities they were located in.

[jakgraphic-2009]

Newton, Iowa is a very nice place. Cool people. Went to college in Des Moines, so I had the chance to see the town firsthand.

Unfortunately, the people who have posted about the buyout by Whirlpool have it right. Not to add to the negative comments about Maytag/Whirlpool, we purchased a Maytag Neptune washing machine, front-loader, environmentally friendly.

We believed in the Maytag name. Long trained to believe in AND purchaed their products.

Unfortunately we made our last and final purchase from "Maytag" around the time Whirlpool purchased them. Do a search on Maytag Neptune washing machine and see the problems that come up. Whirlpool refused to fix, the then-warrantied item. $2K for a machine, which needed a post-card from Whirlpool to authorize their fixing of this known problem. (Suffice it to say, it stinks and mold builds up in the washer unless you give it a dose of bleach every other washing cycle.)

If this is any indication of the buyout - well, we''re glad Newton citizens are NOT a part of them anymore.

As for the new Maytag repairman, note, he never answers his phone, and they finally had to find a younger replacement. I think he''s too busy fixing copiers to fix his products.

Belief in a company. Sorry Maytag. We''re buying elsewhere and hoping to unload our lemon washing machine to some Maytag factory.

[formula1fan]

It should be noted that throughout all of this going on in Newton, a group of over 300 people have come together over the last year and put together the Newton Transformation Council. This revolutionary group has been focusing on different aspects of the community and has been working on many projects for Newtonians of all ages: Restoration of the Maytag Bowl in the park, creation of a business incubator, beginning a reoccurring reverse job fair at the high school, providing great help to entrepreneurs who wish to come to Newton, etc. A quick visit to the NTC''s website reveals that all has NOT been lost in Newton, and I think that''s quite impressive! They''ve done a great job so far of helping this once-hurting town move on to great things. Way to go!