Maytag Names Learmonth As Acting President

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Maytag has named Arthur Learmonth acting president of the company's appliance division, a new position.

Learmonth, previously head of Maytag's service unit, assumes expanded responsibilities as the first president of the recently restructured appliance group. That unit, the company's largest, was reorganized last year by consolidating Maytag's white-goods and floor-care operations, along with their respective sales and marketing functions, under one umbrella. The move eliminated the roles of former Maytag Appliances president Bill Beer, and his Hoover counterpart Tom Briatico.

Chairman/CEO Ralph Hake had helmed the appliance division directly since the restructuring in June 2004.

“Art Learmonth is a talented and proven executive who brings a wealth of operations experience from his 35-year career working in manufacturing and supply chain positions,” Hake said. “His skills will be invaluable as we manage through our restructuring initiatives.”

Learmonth has also been instrumental in instituting the LeanSigma business management tool at Maytag, which has realized hundreds of millions of dollars in cost savings since the company formally implemented the certification program in 2001.

Maytag's service unit provides repair and maintenance to Maytag-manufactured appliances as well as other major appliance brands, and has enjoyed double-digit revenue increases during the last six quarters, Hake said. Succeeding Learmonth as acting president of the service business is David McConnaughey, formerly VP/Maytag all-brand service.

Both Learmonth and McConnaughey will report directly to Hake.

Learmonth joined Maytag in 1997 as manufacturing and engineering VP, was promoted to supply chain senior VP in 2003, and assumed his most recent position at Maytag Services in 2004.

McConnaughey joined Maytag in 1998 as laundry VP/general manager before moving to Amana VP/general manager in 2003. He was appointed to his current position in Maytag Services in 2004.

“Dave has been an integral part of Maytag for several years,” Hake said. “Through his contributions in Maytag Services, the business has diversified its revenue base and grown. I have great confidence in his ability to step into this senior leadership role and sustain the profitable growth we have experienced in the Services business.”

In other Maytag news, the company 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 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.

Separately, Maytag received a financial shot in the arm this month with a new $600 million, five-year, senior-secured revolving credit agreement, co-arranged by J.P. Morgan Securities, Inc. and Citigroup Global Markets. The new credit facility replaces the existing $300 million revolving credit agreement.

“This agreement is a positive development for Maytag,” said George Moore, executive VP/chief financial officer. “The new credit agreement should provide us with substantially more financial flexibility, including capacity to meet all 2006 debt maturities, as well as the ability to operate and restructure our business.”

Under the terms of the agreement, Maytag also has the ability to increase the new facility by $150 million to $750 million.


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