Maytag to Consolidate Floor Care & Appliance Units
Maytag Corp said it will cut about 20% of its salaried workforce as part of a "comprehensive" restructuring to consolidate its Hoover Floor Care and Maytag Appliances operations at its corporate headquarters.
The company said earnings for the second quarter and the full year won't meet previous estimates, as a result of lower-than-expected sales volume at Hoover and Maytag Appliances, lower factory volume related to balancing inventory levels and higher steel and resin costs.
Maytag expects to record restructuring charges of $75 million to $100 million, primarily for severance costs and asset write-downs, with the cash portion of the charge coming in between $45 million and $60 million.
The restructuring, scheduled for completion by the end of 2004, is expected to save $150 million a year.
Maytag said it decided to shift to a "one-company" structure to reduce costs and improve competitiveness, with the goal of reaching an 8% operating profit margin in the first quarter of 2005.
"Maytag has made significant progress in product portfolio, brand position, process improvement and quality trends," Chairman and Chief Executive Ralph F. Hake said in a prepared statement. "The restructuring announced today will leverage those strengths for improved performance in the highly competitive global marketplace of the major appliance and floor care industries and help us grow operating income."
Because its major-appliance and floor-care businesses serve many of the same customers, Maytag expects the restructuring to enhance value for its retail customers and eliminate redundancies through its shift to one sales force and one marketing organization.
Under the restructuring, the Hoover brand will be consolidated into the strategic business units within the marketing group. Pound Ridge, NY, Jun. 4--Maytag Corp said it will cut about 20% of its salaried workforce as part of a "comprehensive" restructuring to consolidate its Hoover Floor Care and Maytag Appliances operations at its corporate headquarters.
Hoover's North Canton, OH facilities will become a research and development and manufacturing site. The company's corporate headquarters and Maytag Appliances operations will also be reduced.
Maytag also plans to make operational process improvements and dispose of unspecified "underutilized assets."
