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Newton, Iowa, seeks to prove resilience amid tides of global trade
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Business English: Newton, Iowa, seeks to prove resilience amid tides of global trade
Less than a month after Maytag closed, the company's former headquarters and call centre have already been occupied by new tenants.A day after the last Maytag washing machine rolled off the production line in Newton, Iowa, in October, John Edwards, the Democratic presidential hopeful, was introduced at a campaign event in nearby Des Moines by one of the factory's former workers.
Doug Bishop recalled taking his young son to meet Mr Edwards at a campaign rally in 2004, when the former senator was running for vice-president. "I'm going to keep fighting for your daddy's job," Mr Edwards told the boy, after hearing about the threat facing the Maytag plant. "I promise you that."
It was a fight Mr Edwards was never likely to win. Maytag, facing pressure from low-cost foreign competition, was sold last year to Whirlpool, its US rival, and Newton was among the list of plants to close in the resulting consolidation. Maytag was founded in the town 114 years ago and was its biggest employer, with a 3,000-strong workforce out of a population of 16,000 until recent cuts.
As presidential candidates converge on Iowa ahead of the state's crucial first-in-the-nation nominating contest in January, Newton has found itself at the heart of an intensifying debate over US trade policy. Democratic candidates have seized on the Maytag closure as evidence that international trade has become rigged in favour of global corporations, the Wall Street elite and China, at the expense of middle-class Americans.
"The statistics today say our economy is growing, that the economic tide is rising," said Mr Edwards at the Des Moines event. "But if you look around, the only thing rising with it are the yachts."
There is a problem, however, with using Newton as a political prop. Visit the town and it becomes clear that its population is unwilling to accept the role of victim. Instead, Newton is aiming to become a case study in US economic resilience.
Less than a month after Maytag closed, the company's former headquarters and call centre have already been occupied by new tenants and there have been at least 60 expressions of interest in the manufacturing facilities, according to Chaz Allen, mayor of Newton.
Mr Allen says the town is also close to clinching a deal with TPI Composites, a Rhode Island-based wind turbine manufacturer, to build a plant that would create up to 700 jobs. "Losing Maytag was like the death of a parent," says the mayor. "It's traumatic but you have to move on."
Newton had been seeking to diversify its economy for several years as it became clear that Maytag's future was shaky. A $70m speedway track was built to expand the hospitality industry, and incentives were provided to attract new businesses and encourage local entrepreneurship. Nearly 300 jobs have been created over the past year and Mr Allen predicts that all 3,000 of those lost at Maytag will be replaced by 2010.
"We were smart enough to start reinventing Newton long before Doomsday,'' says Nancy Watt, owner of Uncle Nancy's, a popular downtown coffee shop, adding that the town had become unhealthily dependent on its most significant employer. "There were opportunities lost because Maytag didn't want to share the workforce," she says.
While competition from China and elsewhere played a part in Maytag's demise, Mr Allen says local anger has focused on alleged mismanagement rather than globalisation.
At least one promising new venture is already rising from Maytag's ashes. About 50 of the company's former engineers have created their own research and development business, called Springboard, ensuring that some of Newton's most skilled residents will remain in the town.
But not all will adapt to life after Maytag as easily as its former engineers. Unemployment in the Newton area has climbed from 3.1 per cent in 2001 to 5.6 per cent - above both the state and national average - and most remaining jobs offer lower wages and benefits than those paid by Maytag.
"The mayor has to project optimism," says Craig Wade, a 57-year-old lifelong Newton resident, sipping, coffee in Uncle Nancy's cafe. "But it has to hurt when a town of this size loses so many high-paying jobs."
Ms Watt concedes business has been slow at the coffee shop this year as laid-off workers cut spending, but she insists that Newton will emerge stronger in the long run. "This town is going to survive," she says. "It's going to do just fine."
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FTD.de, 11.12.2007
© 2007 Financial Times Deutschland,
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