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Maytag To Close Florence Laundry Facility

11/07/2005 03:17:00 PM Eastern

Newton, Iowa — Maytag said it plans to close its laundry plant in Florence, S.C., early in the first quarter of 2006. The shutdown will impact approximately 60 employees.

The move is part of the company’s ongoing effort to rationalize its manufacturing footprint and remove cost barriers to improved financial performance. Maytag had previously stated that its excess manufacturing capacity issues and related costs are concentrated in the laundry and floor-care product categories.

Maytag maintains three other laundry manufacturing facilities domestically, in Arkansas, Illinois and Iowa. Earlier this year, the majap maker concentrated its production of vertical-axis washers at its plant in Herrin, Ill., and dryers in Searcy, Ark.

Restructuring charges associated with the Florence closing are expected to be in the range of $40 million to $50 million, primarily for asset write-down and accelerated depreciation, the company said. The cash portion of these charges is expected to be approximately $10 million related to severance and fulfilling purchase commitments.

“Closing a plant is never an easy decision,” said Steve Ingham, Maytag’s supply chain senior VP. “Unfortunately, we have too much laundry manufacturing capacity, and we need to reduce it.”

Ingham added that the plant closure has nothing to do with employee performance. “Our Florence employees are a hard-working and dedicated group, but in today’s highly competitive global marketplace, we can no longer afford to keep underutilized plants open.”

Affected employees would be eligible to receive severance packages as well as career counseling services. In addition, Maytag will be working with state and local workforce development agencies to help Florence employees make the transition to new employment.

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