Former Maytag employees plan startup
A group of Maytag engineers, who will be affected by Whirlpool’s plan to close a large portion of its Iowa-based Maytag operations, have announced they will start a new industrial development company to be called Springboard Engineering.
According to a report by the Associated Press, the group has secured a 40,000-square-foot building in the Des Moines area. Springboard Engineering will develop plastic injection molds and fabricate prototype sheet metal.
The startup and Whirlpool have agreed to a multiyear deal with the aim of maintaining technical expertise in Iowa, according to the report, though details of the arrangement were not made available. The group expects to staff about 50 workers with experience in mechanical, electrical and software engineering.
Whirlpool announced several restructuring plans last year, following its acquisition of former rival Maytag. Some operating changes included eliminating 4,500 jobs and closing three factories in Iowa, Illinois and Arkansas. The company also added 400 new jobs in Michigan and 1,100 jobs in Ohio.
Whirlpool is based in Benton Harbor, Mich., and markets products under brands including Amana, Whirlpool, Maytag, KitchenAid, Jenn-Air, Brastemp and Bauknecht.
Home Depot’s Blake: time to focus
Atlanta Home Depot CEO Frank Blake was credited with saying all the right things about the world’s largest home improvement retailer when he took over the reins from Bob Nardelli in January. Chief among them was the message of focus on the store and focus on the customer.
In today’s difficult home-improvement market, the focus on the basics of retailing continues, he told Home Channel News.
“A downturn is a painful thing, and all things being equal, you’d just as soon not go through it,” he said at the company’s headquarters. “But it also tends to concentrate the mind, so you get to take a look at your business. And it forces you to be much sharper about what makes a difference to your customer and what doesn’t make a difference to your customer.”
Earlier this month, the company reported comp-store sales decline of 6.2 percent amid a housing market downturn described as worse-than-anticipated. The company earned $1.09 billion in the quarter ended Oct. 28, down 27 percent from the year-ago period.
In a market where home improvement retailing is being tested, Home Depot is moving away from a jack-of-all-trades approach to business. Blake pointed to a handful of examples. The closing of the company’s floor stores, the shuttering of HD Landscape Supply and the — the most obvious example — the sale of HD Supply.
Home Depot is guided by the attitude of focus, he said. “You downscope what you try to do,” he explained. “You try to do fewer things better, rather than a lot of things OK.”
At the Home Depot Store Support Center, the company’s Atlanta headquarters, every day presents opportunities that might lead to revenue and value. “But you have to say, ‘that’s not core to our business right now,’ ” Blake said. “Now is a good time to focus on what we need to focus on — our core retail company.”
For Blake, that focus means the five priorities: associate engagement, store environment, product availability, product excitement and pro-customer engagement. Voluntary employee attrition is down 24 percent, investments in store maintenance are up 2.5 times compared to 2005 levels and supply chain initiative is rolling out in Canada, according to the company.
“I’m really thrilled with the job Craig Menear [executive vp of merchandising] and his merchant team is doing,” said Blake. “We’ve got a merchant running merchandising and that hasn’t been the case here for awhile, and I think that’s starting to make a real difference.”
“Across each one of the priorities we laid out we’ve made some notable progress,” he said. “We still have a long way to go but we’re making progress.”
Deere reports 52 percent profit increase
Farm equipment maker Deere & Co.said Wednesday its fourth-quarter profit rose 52 percent as strong worldwide agricultural sales more than offset declines in other sectors resulting from the U.S. housing downturn.
The Moline, Ill.-based company reported net sales of $6.14 billion for the fourth quarter, representing a 20 percent increase over the same period last year. Company shares rose after fourth quarter results exceeded analysts’ profit and sales estimates.
The company earned $422.1 million, or $1.88 a share, for the quarter ended Oct. 31, compared with $277.3 million, or $1.20 a share, for the same period last year.
Wall Street had predicted a profit of $1.55 a share and a top line of about $5.8 billion. Shares of Deere were advancing 1.7 percent to $147.50 in premarket trading Wednesday.
“Deere’s continuing strong performance reflects improving execution of our plans to create a fundamentally more profitable, resilient business,” said Robert W. Lane, Deere’s chairman and chief executive. “As a result, the company has delivered four successive years of record results, and done so in the face of mixed market conditions.” v
In fiscal 2007, Deere benefited from an improving global farm economy but saw weakening in the construction, forestry, commercial and consumer sectors — chiefly as a result of the U.S. housing downturn, the company said.
Deere earned $1.8 billion in fiscal 2007. Company equipment sales are projected to increase by about 12 percent for fiscal 2008 and to be up roughly 25 percent for the first quarter. Deere is expecting net income of around $2.1 billion for the full year and about $325 million for the first quarter.