Maytag plant closing will crush regional economy

Galesburg, IL - When Maytag shifts its refrigerator production from Galesburg, IL to Reynosa, Mexico, the effects will be felt throughout the local and regional economy.

A study by the Rural Economic Technical Assistance Center (RETAC) found that there will be 3,600 to 5,600 fewer jobs in the region after Maytag closes. That includes the 1,600 IAM members who will lose their jobs at Maytag.

"When a company like Maytag abandons a community like Galesburg and moves to Mexico, the collateral damage is far greater than many people realize," said Midwest Territory GVP Alex Bay. "The big lie of NAFTA is right here for anyone to see."

The shutdown will have ripple effects throughout Knox County and beyond. It is estimated that $111 million in payroll dollars will be lost. That dollar amount includes $61 million in payroll for Maytag workers and $50 million in payroll for non-Maytag workers.


Here is what the study found:

- 1,600 people will lose their jobs

- Another 575 people will lose their jobs when Maytag stops buying goods and services from their employers.

- 1,475 will lose their jobs from shifts in regional household spending patterns caused by changes in regional employment levels. What is commonly known as a ripple effect.

- RETAC predicts 3,631 jobs will be lost in Knox County alone. The study does not estimate the effects in other counties.

- RETAC did a similar study based on Maytag employment in 1999, when the local plant was booming. The study found that 2,475 people would lose their jobs directly, 889 people who work for Maytag suppliers would also lose their jobs, and 2,253 people would lose their jobs through the ripple effect in the economy throughout the region. The total numbers of jobs lost based on 1999 numbers would be 5,617 jobs.

Who will be affected by the closing?

Direct job loss - Maytag employees - 1,600 jobs

Among Maytag suppliers based on 1,600 Maytag jobs lost


Hardest hit categories….

Wholesale trade, 176 jobs

Personnel supply services, 66

Trucking and warehousing, 59

Maintenance and repair facilities, 39

Eating and drinking establishments, 25

Banking, 24

Management and consulting services, 14

Hotels, 12

Services to buildings, 11

Accounting and bookkeeping, 10

The Postal Service, 10

Total of indirect job losses: 575 jobs


Where will the “ripple effect” job loss take place?

Hardest hit categories….

Education, 10 jobs

Eating and drinking, 132

Government, except education, 109

Miscellaneous retail, 83

Hospitals, 77

Groceries, 72

General merchandise stores, 56

Doctors and dentists, 48

Automobile dealers and gas stations, 44

Nursing and protective care, 37

Other maintenance and repair, 27

Banking, 26

Labor and civic organizations, 24

Domestic services, 24

Total “induced or ripple effect” jobs lost: 1,457

In fact several Galesburg businesses have already announced they will be closing soon. Those businesses stated their closures are a direct result of the Maytag announcement to shutdown its Galesburg facility.