By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Maytag will move much of its refrigeration production to Mexico late next year in order to cut costs and boost earnings.
The new strategy, which Maytag says will enable it to produce future refrigerator models more economically and profitably, is part of an ongoing cost improvement initiative at the company.
Plans call for Maytag to construct a new refrigeration plant in Reynosa, Mexico, to be located on the site of a subassembly operation that the company opened there earlier this year. Maytag acquired a second subassembly facility in Reynosa in July. The new refrigeration plant will manufacture side-by-side models.
Consequently, the company will begin curtailing side-by-side production at its main Galesburg, Ill. facility, will finalize manufacturing alternatives for the top-mount models currently produced there, and will shut the plant completely by late 2004. The former Admiral factory employs about 1,600 workers.
"This is a difficult situation," said Maytag Appliances president Bill Beer. "We deeply regret that we could not identify a cost-effective solution that would allow us to continue the long-term production of refrigerators in Galesburg."
He added, "The changes that we intend to make in our refrigeration business are critical to improving our profitability in the very competitive appliance marketplace."
According to industry analysts, the move will represent the first time that Maytag will manufacture finished products outside of the United States. In doing so, it follows its domestic majap competitors, which have moved varying degrees of production offshore.
Maytag also manufactures and assembles refrigerators at facilities in Amana, Iowa, which in addition to the Reynosa plants will also produce new, redesigned side-by-side models.
Separately, the company said it will re-tool its cooking products plant in Florence, S.C., next year to produce a new laundry product. The products currently produced there will be redesigned for production at Maytag's main cooking products plant in Cleveland, Tenn.
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