Wednesday, January 31st, 2007 By David Hansen
Not having followed either AG activism or anti-trust closely, am I off track in thinking that Dann basically coerced these concessions out of Dirt Devil, forcing that company to make these payoffs which would still be a cost savings over the potential liabilities of even an anti-trust case? If this is the case, the impact of this action on future sales of corporate assets in Ohio could be significant as it effectively lowers their value to potential purchasers. I wonder how Whirlpool, a company with very significant job-providing investments in Ohio and which could be trying to sell off other assets for a good price, feels about this deal? I wonder if how this might have changed the deal’s price and terms to Whirlpool’s disadvantage.
From Gongwer Legislative News Service, Jan 30, 2007:
AGREEMENT ON OHIO R&D FACILITY, HEADQUARTERS FOR HOOVER
BUYER EASES ATTORNEY GENERAL’S ANTI-TRUST CONCERNS
The maker of Dirt Devil
vacuums completed its acquisition of the Hoover Co. on Tuesday after Attorney
General Marc Dann’s office opted to not pursue an anti-trust lawsuit over the
$107 million purchase.
The state won assurances from Hong Kong-based Techtronic Industries Co. Ltd. that it would add at least 110 new jobs in expanding its existing Dirt Devil facilities near Cleveland into a North American headquarters and research, development and marketing
center.The company, which purchased Hoover from Whirlpool Corp.,
also agreed to a “feasibility study” of broadening its accessory production and
marketing, however the fate of some 800 hourly and 200 salaried employees at the
North Canton Hoover operation has yet to be determined. Chris Gurreri,
president of TTI Floor Care North America, told reporters at a Columbus news
conference that it was premature to speculate on plans for the Hoover workforce
because the company had only recently gained access to the
operation.“Our goal is to grow the business,” Mr. Gurreri said. He described TTI’s plans for the Glenwillow R&D and marketing hub as a project that would “knock your socks off.”
The company plans an initial investment of $2 million, he said.Lt. Gov. and Development Director Lee Fisher said a “team effort” that included Gov. Ted Strickland, U.S. Sen. Sherrod Brown, Mr. Dann and other stakeholders resulted in the agreement, under which TTI assumes the full liabilities of Hoover including the union pact that extends through June 2008. “Everyone acted in good faith,” Mr. Fisher said.
Jim Repace, president of the International Brotherhood of Electrical Workers Union
Local 1985, said TTI promised a “fair assessment” of Hoover operations, noting
the purchaser had been cooperative during the early phase of discussions.
“They have committed to revitalizing the Hoover name,” he said, noting that
union members have seen tough times as Hoover has been “run into the ground”
during the last five years. “They’ve been so open and honest with us. It’s
something we haven’t experienced in the last few years.”TTI said in a news release that it is combining Hoover with its existing Dirt Devil and Royal Appliance Mfg. Co. operations in Glenwillow. The company, which
manufactures a variety of products worldwide, acquired Vax in 1999 and Royal in
2003.Attorney General Dann initiated an anti-trust review of the purchase and considered seeking a restraining order in federal court based on concerns of over-consolidation in the upright vacuum cleaner market. Jennifer Pratt, senior deputy AG in the office’s Anti-Trust Unit, said the company’s commitment to research and development alleviated the state’s concerns because innovation often takes a hit with industry consolidations.
The acquisition makes TTI Floor Care the largest floor care business in North America, said Joe Galli Jr., CEO of Techtronic Appliances Holding Co. Ltd. “We’re darn serious about winning in this market.”
Print This
