Maytag Corp. has launched a series of strategic actions under the direction of its new president and chief executive officer, Leonard A. Hadley. Hadley returned to the company early in November, replacing Lloyd D. Ward in the top post. His initiatives are designed to improve operating efficiency, reduce costs, and "reinvigorate innovation" in Maytag's product lineup, the company reported.
Maytag reported that it experienced slower than expected sales of major appliances during October and November, which will cause fourth-quarter consolidated sales and earnings for the corporation to fall below earlier projections.
"The expectations set by this organization publicly were based on assumptions that the major appliance industry would be flat or down slightly for the quarter," Hadley explained. "The industry is down more severely and, as a result, we are seeing lower volume in our major appliance division." Although sales of Hoover floor care products remain strong, the volume falloff in major appliances "translates directly into weaker operating income and operating inefficiencies associated with lower production levels," he observed.
Upon Hadley's return to Maytag, he undertook a review of operations and strategic projects. As a result, the company is eliminating its "group president" structure, and the associated layers of management, in order to speed decision-making and increase operating accountability at the business unit level. Hadley also indicated that he will refocus research and development spending for more immediate impact on Maytag's core major appliance and floor care business, and will "curtail significantly" its investments in web-based businesses and e-commerce initiatives outside that core.
Thus, three officers have resigned from the corporation: Jerome L. Davis, who had been president of the Commercial Solutions group (vending and commercial foodservice equipment); Gregory L. Jordan, who had been chief technology officer heading the corporate technology and R&D group; and Carole J. Uhrich, who had been president of the Home Solutions group (major appliance and floor care products). Uhrich, who was elected to Maytag's board in 1995, continues as a director.
As a result of the reorganization, business unit presidents now will report directly to the CEO, and each president will have direct profit and loss responsibility for the business. Thomas Briatico has been named president of the Dixie-Narco division, which manufactures refrigerated packaged-beverage vending equipment; and Glen Kelsey becomes president of the G.S. Blodgett division, which manufactures and markets a line of commercial cooking products including ovens and fryers. Both positions are new. Current division presidents Larry Blanford (major appliances) and Keith Minton (floor care) also will report directly to the CEO.
Hadley added that, rather than continue a trend toward centralization of R&D and the associated overhead, he is returning research and product development responsibilities to the business-unit level. He added that Maytag also will reduce investments in internet-based activity and other, more experimental, e-commerce initiatives beyond the core business. "At the same time, we will shift resources and accelerate basic e-commerce support for the core business," he said.
"Maytag in the past year has increased substantially its total R&D spending," Hadley explained. "However, much of that spending has not directly supported the delivery of innovation in our core product lines. We intend to focus that spending more sharply on our core product lines in major appliances and floor care, and on products that will hit the marketplace sooner rather than later."
Maytag had assembled its vending machine and foodservice equipment units into the Commercial Solutions Group late last year (see V/T, October 1999), and announced a strategic partnership with e-Vend.net to develop methods for networking vending machines (see V/T January).