a good try
stan...@gmail.com
Town seeks to prove resilience amid tides of global trade
By Andrew Ward in Newton, Iowa
Published: November 9 2007 02:00 | Last updated: November 9 2007 02:00
A day after the last Maytag washing machine rolled off the production
line in Newton, Iowa, last month, 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 (£33m, €48m)
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.
Kimberly Didier, executive director of Newton Development Corporation,
complains that presidential candidates have shown little interest in
the town's efforts to bounce back.
"They have been using Newton as a campaign platform. But none of them
have really reached out to find out what's going on," she says.
A range of support services has been provided to help laid-off Maytag
employees find work, including free training, consulting and market
research for those interested in starting their own business.
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."
Copyright The Financial Times Limited 2007