The Maytag Corporation is an American home and commercial appliance brand owned by Whirlpool Corporation after the April 2006 acquisition of Maytag.
The Maytag Washing Machine Company was founded in 1893 by businessman Frederick Maytag. In 1925, the Maytag Washing Machine Company became Maytag, Inc. During the Great Depression of the 1930s, the company was one of the few to actually make a profit in successive years. In 1938, Maytag provoked strikes by the company's workers because of a 10% pay cut. The company was able to beat the strike because of the intervention of four military companies, including a machine gun company, of the 113th Cavalry Regiment, Iowa National Guard. At his father's death in 1940, Fred Maytag II, grandson of the founder, took over the presidency. During World War II, the company participated in war production by making special components for military equipment. In 1946, production of washing machines was resumed; in 1949, the first automatic washers were produced in a new, dedicated factory. In 1946, Maytag began marketing a separate line of ranges and refrigerators made by other companies under the Maytag name. During the Korean War, the company again produced parts for military equipment, although washing-machine production continued.
During the 1950s, the 'white goods,' or laundry and kitchen appliance industry, grew rapidly. Maytag first entered the commercial laundry field at this time, manufacturing washers and dryers for commercial self-service laundries and commercial operators. In response, other full-line appliance producers began to compete with Maytag in the white-goods consumer market. These included 'full-line' manufacturers such as Whirlpool, General Electric, and Frigidaire, who built not only washing machines and dryers, but also refrigerators, stoves, and other appliances. Since Maytag was much smaller than the full-line producers, the company decided to limit itself to the manufacture of washers and dryers, alongside marketing ovens and refrigerators built by other companies, as a small, premium-brand manufacturer. The company capitalized on its reputation by renaming its corporate address in Newton, Iowa, "One Dependability Square."
By 1960, Maytag had ceased marketing ovens and refrigerators, but later began once again to expand into kitchen appliances with its own design of portable kitchen dishwasher and a line of food-waste disposers. Upon the death of Fred Maytag II, the last family member involved in the company's management, E. G. Higdon was named president of the company, with George M. Umbreit becoming chairman and CEO. By the late 1970s, over 70 percent of U.S. households were equipped with washers and dryers, and with approximately 18,000 employees worldwide, the company was established as a dominant manufacturer of large laundry appliances. After the company's acquisition of Magic Chef, Inc., in 1986, a move which nearly doubled its size, the company acquired a new corporate name, Maytag Corporation.
In 1989 Maytag acquired Chicago Pacific Corporation. Chicago Pacific Corporation owned Hoover US and Hoover UK as well as Thomasville Brand Furniture. Maytag quickly sold off the Thomasville Furniture brand. Maytag Corporation, led by Chairman Daniel Krumm, next planned to make Maytag a worldwide organization. The UK part of Hoover was to help Maytag expand into Europe. Hoover UK was not doing well financially and offered customers a round-trip ticket anywhere if they purchased a vacuum. This campaign cost the corporation $50 million to settle. Subsequently Maytag sold off Hoover UK. This was a huge setback for the amount of cash Maytag had in hand and thus started the downward spiral financially.
In 1991 Maytag built a new plant in Jackson, Tennessee, for the manufacture of newly designed plastic tub dishwashers. The Plastic tub was developed in Newton, Iowa, but in 1996 Engineering was transferred to Jackson because Mr. Len Hadley, then president of Maytag Corporation, wanted the plant to be self-sufficient. This engineering team engineered a Stainless Steel dishwasher, Tall-Tub Plastic and Tall-Tub Stainless steel product. Engineering crescendoed with a Double Drawer dishwasher which today is manufactured in Findlay Ohio at the Whirlpool Plant, the only Maytag legacy product built in the Whirlpool Appliance line-up. The Jackson plant evolved into a streamlined manufacturing facility that could build thousands of dishwashers daily on multiple lines. This plant was the most efficient plant and was a hallmark for other facilities. Whirlpool closed this plant. In 1997, Maytag Corporation purchased G.S. Blodgett Corporation. Blodgett made ovens for Major Pizza companies at the time of this purchase Maytag was looking at the Turbo Chef line they had been working on up to this point.
Prior to 1997, the Maytag engineering team, at Maytag Laundry Appliances Research and Development, developed the Maytag Neptuneline of front-load washers. A matching dryer was introduced to accompany the new washer. The company claimed that the new Neptunemodel saved energy costs over traditional washer/dryer sets. Production of the Neptune line was later switched to Samsung Electronics. In 2001, the company acquired the Amana Corporation and its appliance assembly facilities. That same year, Ralph F. Hake became the last chairman and chief executive officer (CEO) of Maytag Corporation, serving in that post until March 2006. Once renowned as the standard for laundry appliances, by 2003 the company faced increasing competition from new appliance brands in the US market, as well as from existing appliance manufacturers who had outsourced production a decade earlier in order to reduce costs. While Maytag had begun the process of shifting appliance production to lower-cost assembly plants outside the United States, in 2004 the company was still producing 88 percent of its products in older U.S.-based factories. In an apparent move away from traditional company marketing strategy, company management decided on a plan to stimulate consumer purchases of new Maytag appliances before their old ones had worn out.
Costs incurred in Maytag's acquisition and integration of Amana and an increased corporate debt load led to aggressive internal cost-cutting efforts in direct materials, manufacturing, and distribution costs. Maytag introduced a value-priced appliance line under a separate label, Performa by Maytag. To increase sales, the company also marketed Maytag-branded 'Legacy Series' washing machines that were otherwise identical to low-end Amana models, and built at the formerly Amana assembly plant in Herrin, Illinois. The rebranded Maytag models, later termed Amanatags by dissatisfied owners, received poor customer reviews after reports surfaced of major mechanical and/or durability problems. The company also consolidated warehouse operations and cut the number of Maytag vendors. Between 2002 and 2004, Maytag corporate management cut new-product investment by 50%.
An increasing chorus of consumer complaints concerning product reliability and customer service, assisted by the rapid growth of internet consumer forums, began to affect the company's reputation with customers.The company was also slow to react to customer complaints regarding its flagship Neptune washer and dryer line (labeled theStinkomatic by dissatisfied customers because they would become moldy in a way that could not be easily cleaned), resulting in further damage to the company's reputation and a $33.5 million payout to settle several class-action lawsuits arising from the Neptune problems.By 2005, Maytag's market share had declined to all-time lows, sales were flat, and customer satisfaction surveys ranked Maytag near the bottom of the appliance field. The problems with the Neptune line continued; in 2007, 250,000 Neptunewashing machines became part of a nationwide safety recall by the Consumer Product Safety Commission due to fire danger.
In 2005, Haier sought to expand its share of foreign markets by acquiring rival white-goods OEMs and by expanding overseas production capacity. With backing from two large U.S. private equity funds, Haier made a bid to acquire U.S. appliance maker Maytag for $1.28 billion. The bid failed and Maytag was bought by Whirlpool for $1.7 billion.
On April 1, 2006, Whirlpool completed its acquisition of Maytag Corporation. In May 2006, Whirlpool announced plans to close the former Maytag headquarters office in Newton, as well as laundry product manufacturing plants in Newton, Iowa; Herrin, Illinois; and Searcy, Arkansas by 2007. Following the Maytag headquarters closure, all brand administration was transferred to Whirlpool's headquarters in Benton Harbor, Michigan. The Maytag name would now be used on Whirlpool-designed appliances. Most Maytag employees were terminated, but some were offered jobs at Whirlpool. The board of directors of Maytag all received five years' severance pay. Former Maytag chairman and CEO, Ralph F. Hake, received two years' base salary and two years' target bonus under his severance agreement.
On January 1, 2009, Maytag (under the ownership of the Whirlpool Corp.) changed the vested lifetime benefits of the Maytag retirees. There is a lawsuit pending in the Southern District Court of Iowa where Whirlpool has asked for permission to change the UAW bargained benefits. The benefits in question were subsequently changed despite any resolution of the lawsuit
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