Leonard Hadley-- Not so lonely at the top

by Norm Winick

Leonard Hadley, the Chairman and CEO of the Maytag Corp. called on Monmouth College last week to give a lecture. As he was addressing the group of students, townspeople, and a handful of executives from the Galesburg plant making sure they were seen, Hadley confided that he never really got the position he wanted with the firm. ''Maytag's uniform is that of the lonely repairman with absolutely nothing to do. I've been at Maytag for 40 years and I've been trying all along to get that job.''

Since he has been busy, Hadley discussed some of the changes he's seen in his 40 years in the industry. ''We're selling to fewer and larger customers. The big box stores are determining the price-- not the manufacturer or the consumer. The power in the industry has shifted from the manufacturer to the retailer. The big box stores provide great value to their customers. The independent retailer, and we still have 750 of them, also has a place-- but only if they base their business on service.''

The distinction between Maytag and other consumer goods, Hadley indicated, is that ''We sell $4 billion worth of consumer and commercial products and people can live without or products. People buy our products not because they have to but because they want to. Our products will do a better job of cleaning your laundry, your floor and your dishes: a better job of cooking and preserving your food.''

''Americans do not appreciate how inexpensive their everyday life is. The percent of their salaries devoted to everyday essentials is the lowest in the world. We have more disposable income left over than any nation in the world by a large margin.''

That's not the only obstacle to selling more appliances around the world: ''You cannot export North American appliances in any quantity anywhere else in the world. And it''s not the differences in electric current; that's easily handled. They don't have the money; the average price of a washer we sell to China is $90. There are also substantial cultural differences in the way people cook and shop. Major appliances are not a global product.''

In America, Hadley says that Maytag will be marketing primarily three consumer brand names: Jenn-Air at the top, Maytag in the middle and Magic Chef for the price-conscious. The Admiral name, long a fixture in Galesburg, will be a thing of the past even though the firm will protect its trademark. The same is true of Norge and other names Maytag owns and once marketed. The company will also rely less on private label merchandise. Maytag used to produce most of the Montgomery Wards' ''Signature'' brand refrigerators but the downfall of Wards has let to a major drop-off in that business. ''Even though we make a few high-end cooktops for Sears, private label is not a significant part of our business any more.''

As the CEO of a major corporation, Hadley says he decries the lack of confidence in corporate executives on the part of the American public. ''Nineteen percent of the public have confidence in corporate America-- just slightly ahead of Congress.'' He says it's partly because ''80 percent of references to executives on television are negative. Sure, there are some scoundrels in business but they are clearly in the minority.'' He doesn't think that outrageous top-management salaries are a primary reason. ''It's deeper than that.''

In a press conference before his speech, Hadley addressed the subject of corporate welfare-- at least in terms of the millions of dollars his firm received from Galesburg and the State of Illinois to maintain its Galesburg refrigerator plant. He would not answer if the firm was ever actually considering pulling out of the city but did say that while refrigeration is the weakest of the industries Maytag is in, the investment they've made in the Galesburg plant shows their commitment to Galesburg now. He does agree that the process isn't right.

''I wish all states and cities would get out of the bidding business and let business operate and make decisions based on the market value of its product; let labor compete on the market value of its services; let the market value of a geographic region be the determining factor as to where a plant locates. I wish they didn't uses taxes as an incentive at all but as a businessman, I take advantage of whatever any area has to offer. It is valuable in the short term. In the long term, it's whether the $180 million we spent in Galesburg was spent properly. It's too bad that cities have to compete with each other but they just can't quit. I know I'm out of step with other corporate leaders but I want the market to determine these things.''

Leonard Hadley will soon be retiring from Maytag. His attention to detail and grasp of an ever changing industry based on the needs and desires of a fickle American public will be hard to replace.

Uploaded to The Zephyr website April 24, 1999

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