Maytag enters appliance repair business

DES MOINES, Iowa (AP) -- Maytag Corp. is putting its lonely repairman to work fixing other companies' brands of home appliances, hoping service will become a significant growth area while appliance sales are weak.

"What they want to do is capitalize on what is an extremely well-known name, that is the Maytag repairman, and use that tremendous goodwill and brand name recognition to likewise service and repair other people's stuff," said Anthony Sabino, associate business professor at the Peter J. Tobin Business School at St. John's University in New York.

Maytag announced in August that it was forming a new in-home appliance repair division, but planning began as much as a year ago by a special committee tasked with identifying areas of potential growth.

During tough economic times, consumers may put off buying big ticket items, such as washers, dryers and refrigerators -- a trend reflected in softer sales since the 2001 recession. But older appliances may need maintenance or repairs -- and that's where Maytag saw opportunity.

"You have a hypercompetitive environment. Everyone is trying very hard to wring out costs and to basically make some kind of profit let alone prosper," Sabino said. "Maytag is seeking to expand its line of business and its bottom line profit-wise by going into what could be the very lucrative area of service."

Market studies showed a lack of trained technicians to care for what are increasingly complex appliances.

"We had seen indications that the historical service base was eroding," said Steve Benton, a Maytag vice president and general manager of Maytag Services. "Technicians were aging and leaving the industry and there wasn't sufficient activity in the industry to bring new talent in.

"We found that the consumer was in a situation where they were being underserved."

The market studies also indicated that consumers had confidence in the Maytag brand and that could carry over to the service area.

Company officials hope to cash in on Ol' Lonely, the idle repairman made famous by decades of exposure in print and television ads.

"At a very fundamental level, that Maytag man image and brand icon has been associated with service. The brand is associated with trust, quality and reliability," Benton said. "It was interesting those attributes of our brand were really a strong match with how consumers articulated they viewed a strong home repair service."

The company chose to launch its new division in the nation's capital because it had a sizable number of Maytag repairmen experienced at working on other brands. The idea worked and it was expanded to Baltimore, some Virginia markets and into Boston, Benton said.

A few months ago, Maytag repairmen in Atlanta and some Florida cities began servicing other brands.

"In the past year there have been some early indicators of success," Benton said, adding that the company plans to expand slowly.

"It's too early to project a date when we would, or would not, roll it out nationally," he said.

Maytag is following a trend established by Sears and other companies such as IBM and General Electric, which once were known primarily as manufacturers but have turned service into major profit centers.

"Maytag is simply seeking to replicate that kind of success," Sabino said.

Sears has made repair calls since the 1980s. Its product repair services group, which made 14.5 million service calls last year, brought in $2.2 billion of the company's $41 billion revenue, said spokesman Bill Masterson. That included sales of parts and installation of heating and air conditioning products.

Sears has 10,000 technicians, mostly company employees, linked by wireless laptop computers through a satellite system. They can access parts supplies and a customer's service history.

"We use all the technology and training available to us to ensure that we instill in the customer that they can trust us," said Mark Good, general manager of Sears Product Repair Services group.

The need for more technicians has been apparent for many years as consumers move to more sophisticated appliances loaded with features and find less time for repair calls in their busy schedules.

"Time is of the utmost importance. Meeting the customer's expectations is more than fixing the appliance but being there when they want us there," Good said.

Benton said Maytag intends to invest significant resources into hiring and training technicians and support staff and "obtaining the necessary technology to run the best-in-class services business."

The pilot projects are using Maytag employees but Benton said in some markets the company may enter contracts with independent technicians to do repairs.

Dennis Anderson, director of the Center for Manufacturing Excellence, a service technician training center at Carl Sandburg College in Galesburg, Ill., said the new service division could help take some of the sting out of the increasing number of factory layoffs.

He said he's seen many former factory workers register for courses to be certified as repair technicians.

"They understand that service is big," he said. "Assembly lines are diminishing, the shop floors are getting smaller and they're anticipating retraining themselves to hopefully get jobs in other markets."

Anderson said major appliances can be expected to last at least 15 years if properly maintained.

"You can't expect to have these items to be throwaways ..." Anderson said. "If you don't do any maintenance on them or service warranty work on them they can go out in less time."

According to Consumer Reports, Maytag repairmen are not as lonely as we've been led to believe, especially since the Neptune line hit the ground running.

2 posted on 10/27/2003 2:20:07 PM PST by newgeezer (Just my opinion, of course. Your mileage may vary. You have the right to be wrong.)

Maytag has been living off their reputation for years. You can get cheaper washers and dryers from GE that are just as reliable.

I bought a Whirlpool clothes washer for my family's use 12-15 years ago. Last year it quit. My wife admitted overloading the thing with several bedspreads at one time. I was getting prepared to shop for a new unit, but decided it wouldn't hurt just to look. Took the cover off and discovered a stripped slip-clutch/coupler connecting the motor to the works. Not a belt in sight. I'm a Whirlpool man.

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