Washday Wonder

Four decades ago, one of the sounds of status in homes across the U.S. farm belt was the pop, pop, pop of a gasoline engine on Monday morning--a tip-off that the inhabitants were prosperous enough to own a Maytag washing machine. Today, a remarkable number of the same machines--converted to electricity--are still washing clothes. Even more remarkable, the Maytag Co. of little Newton, Iowa, has withstood the churnings that have long since washed out most independent laundry-machine makers, now stands a strong second in the billion-dollar industry. Outstripped in sales only by Whirlpool Corp. (RCA Whirlpool, Sears's Kenmore), Maytag, in its own field, ranks ahead of such giants as General Electric, General Motors (Frigidaire), Borg-Warner (Norge) and Westinghouse.

Maytag has held its own because of the stubborn individualism of its management, headed for the past 24 years by Frederick Louis Maytag II, 50, grandson of the founder. Items:

P: While its competitors pursue diversification, producing an ever wider range of appliances, Maytag moves in the opposite direction. Since 1957, Maytag has dropped its moneymaking stove and freezer lines to concentrate entirely on the products it knows best: washers and dryers.

P: Where some of its rivals strain to make yearly model changes, Maytag changes its models only when it has a basic improvement to offer, advertises: "You don't buy a Maytag; you adopt it." The newest Maytag improvement, to be introduced next week: an electronic drying device for its budget-priced dryer.

P: Where some appliance makers got hopelessly trapped in discount-house and supermarket-style selling, Maytag has worked to increase its control over the sales and servicing of its products.

The payoff on these conservative policies is the best profit record in the appliance industry. Though its sales last year ($109.6 million) put it only 373rd on FORTUNE'S list of the top 500 U.S. corporations, Maytag ranked 19th in profits on invested capital (21.2%). This year the company controlled costs so well that second-quarter earnings were up 33% even though sales remained almost identical.

The 600 Days. Maytag made its first washing machine--a hand-powered model --in 1907 as a sideline to Founder Fred L. Maytag's efforts to produce farm machinery and, later, automobiles (both long since dropped). The company was just one of 100 washing-machine producers for 15 years until Chief Engineer Howard Snyder perfected the first machine to wash clothes by violent water action rather than rubbing and squeezing as the early machines did. In 600 days of hard selling, Maytag made his company the world's leading washing-machine maker. He kept control of the company until he died in 1937 (it is still 57% family owned), left Newton with so many public buildings bearing his name that the number embarrasses the present management.

Personable Fred Maytag II brought the flourish of a master salesman to the company. He gave up a promising career in Iowa politics in 1949 to oversee the successful campaign to sell Maytag's first automatic washers, snapped the company out of the 1958 recession by ordering a 72-hour "salathon" that brought in orders worth $17 million.

Passion for Quality. Now back on the job after his third hospitalization for cancer in 18 months. Fred Maytag staunchly says: '"I do not intend to diminish my activities in any respect." He is acutely aware that Grandfather Maytag's most valuable bequest was his craftsman's passion for high mechanical quality. Mass production has made this increasingly hard to achieve--especially in complicated automatic washers. So once again, Maytag is bucking the trend with a pilot program giving each worker a more complex role to perform on the assembly line. Says one woman employee, whose job has been expanded from turning a few screws to assembling complete washer tops: "I'm proud of these tops. If I get one back that's wrong, I worry about it."

Fred Maytag's aim is to make a machine that will require no major repairs for ten years. "I'm well aware," says he, "that we have not achieved this objective, but we are making strides."

This file is automatically generated by a robot program, so reader's discretion is required.