Friday, September 07, 2007

Life After Maytag

Next month the last vestiges of Maytag will disappear from Newton, IA (population 15,579), a wonderful town midway between Des Moines and Iowa City. When I drove through the town last week, I wondered what changes will occur in Newton with the closing of the last Maytag plant on October 26th.

Newton has been a manufacturing mecca and headquarters for Maytag ever since local farmer Fred L. Maytag built his first mechanical washing machine in 1907. The washing machine was initially intended to help solve seasonal slumps in Maytag’s farm equipment business but quickly became the main business for Maytag. By 1927 Maytag had sold its millionth washing machine.

In recent years Maytag struggled, with a procession of new CEOs unable to turn it around, culminating in the sale of the company to rival Whirlpool in the spring of 2006. The 1,200 white-collar and 1,000+ manufacturing workers in Newton were the casualties of that sale when Whirlpool quickly announced that it would close all facilities in Newton.

I applaud Newton’s efforts to reinvent themselves as a community. They have established the Newton Promise, which will pay for four years of college for anyone who graduates from Newton High School. They also worked to build the Iowa Speedway, Iowa’s only NASCAR track, in the community. And the town is assisting in the retraining of former Maytag employees, many of which are starting their own businesses.

It will be interesting to study the transformation of Newton from a one-company dependent town into a more diversified one. There will be much pain and suffering in the process but I’m impressed with the steps that Newton has already made in their journey.

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