Maytag Corp. suppliers will ship some of their parts to Mexico, where the appliance major is establishing a subassembly facility.
Maytag wants to cut costs by having some labor-intensive work done in Mexico.
``For several years, our competitors have realized cost benefits from having a manufacturing presence in Mexico,'' Maytag's major appliance division President William Beer said in a news release. ``This has placed us at a competitive disadvantage in the marketplace, and it's time for us to address that situation.''
The company has not decided yet which subassemblies it will transfer from its U.S. plants to Mexico, Art Learmonth, vice president of manufacturing and engineering, said in a telephone interview. Suppliers of plastic and metal parts for affected subassemblies will ship their components to a facility Maytag will set up in the first quarter of 2002; a location has not yet been determined.
Maytag is unlikely to ship parts south that it makes in its own U.S. plants. The company makes its refrigerator liners but outsources other plastic refrigerator parts. Maytag molds most of its plastic components for laundry appliances.
The site will ship subassemblies back to Maytag's U.S. operations for final assembly. Maytag said its initial investment in Mexico will be about $2 million. The new operation will employ about 230 and be the first Maytag major-appliance-related facility south of the border. Its Hoover floor-care business has had a plant in Mexico for 17 years, and Maytag runs sales and distribution operations in Monterrey and Mexico City.
Maytag recently bolstered its plastics operations by acquiring rival Amana Appliances from Goodman Global Holdings Inc. for $325 million. Amana's main molding and assembly operations are in Amana, Iowa, where it makes refrigerators and microwaves. Its cooking appliance operation in Florence, S.C., also does molding. The laundry products facility in Searcy, Ark., outsources molded plastic parts, Learmonth said.
Maytag completed the acquisition Aug. 1. The purchase will add about $900 million per year to Maytag's sales. It does not include Amana's home and commercial heating and air-conditioning businesses. During the next few months Maytag will move the Amana headquarters from Amana to Newton, Iowa.