That lonesome Maytag repairman suddenly has plenty of company. Whirlpool is among the companies competing to acquire the struggling appliance maker, eclipsing an offer made in May by an investment group led by Ripplewood Holdings LLC.
The $1.3 billion dollar Whirlpool offer is significantly more than the current offer on the table and represents a ten percent increase over Maytag?s closing stock price on Friday. And it may not be the final offer, since an investment group headed by Chinese appliance maker Haier has also expressed an interest in making a bid.
Maytag is best known for its washing machines, as well as its Hoover, Jenn-Air, Amana, and Jade brands of appliances. Whirlpool produces a wide range of appliances under the KitchenAid and Roper brand names.
Based in Newton, Iowa, Maytag has been squeezed by high labor costs and ruthless foreign competition. Its new owners are expected to move much of its production offshore and try to increase its penetration of foreign markets. Currently, about 12 percent of Maytag's products are made abroad.
Maytag's competitors, including Whirlpool and General Electric, have moved more than half their production overseas, giving them major cost advantages over Maytag. Maytag's domestic workforce is heavily unionized.
The company's quality control has slipped in recent years. An embarrassing design flaw caused mildew to collect in some washing machine models. Earlier this year Best Buy stopped selling Maytag washers and dryers, while Home Depot added appliances from a Maytag competitor.
Maytag employs about 18,000 workers worldwide, about 1,300 of them at its main plant in Newton. Many of the Newton jobs could be in jeopardy as the new owners work to slash costs. In a letter accompanying its bid proposal, Whirlpool said it expects it could achieve significant cost savings by combining the two companies? operations.
