Grassley: Rockwell Collins' acquisition could be Maytag all over again

When Sen. Chuck Grassley heard reports that United Technologies Corp. was interested in purchasing Cedar Rapids-based Rockwell Collins, another giant acquisition of an Iowa company came to his mind.

"I thought immediately of Maytag," the Republican senator told The Des Moines Register on Friday.

Whirpool Inc. announced its acquisition of Newton-based Maytag in 2005. At the time, Grassley said he heard assurances from executives that the merger wouldn't impact Iowa's role in the storied Maytag brand.

But about two years later, the company had fled the state.

Grassley said he has no evidence that the purchase of Iowa's Rockwell Collins by Connecticut-based United Technologies means the company will pull up Iowa roots entirely. But his impression after meeting with executives is that its aerospace division headquarters would not be located in Iowa, Grassley said.

United Technologies, a multinational conglomerate, announced a $30 billion purchase of the Cedar Rapids aviation company on Sept. 4. If completed, it will go down as the single largest aviation merger in history.

Grassley this week met with leaders from both Rockwell Collins and United Technologies. He said he was assured that the combined company will keep and possibly even grow its employment base in Cedar Rapids.

Rockwell Collins currently employs about 30,000 people across the company, including 9,000 people in the Cedar Rapids area. That makes it the single largest employer in Iowa's second-largest city.

Rockwell Collins and United's existing aerospace business will combine into the new Collins Aerospace Systems. But executives have not said where that division will be based.

United Technologies' Aerospace Systems is based in Charlotte, North Carolina.

"Are they going to be in Charlotte or Cedar Rapids? I don’t think they led us to believe they were going to be in Cedar Rapids," Grassley said. "But they did lead us to believe there were going to be darn few jobs of that caliber leaving Cedar Rapids."

Rockwell Collins spokesman Josh Baynes said executives had a good conversation with the senator and committed to keeping him informed as the acquisition progresses.

"UTC values our people and capabilities, and Iowa will continue to play a very important role in the business going forward, should the deal close," Baynes said. "There is very little overlap in our products and we do not foresee any significant impact to our engineers, production and operations personnel."

United Technologies Corp. spokeswoman Maureen Fitzgerald offered the following comment on the subject: “While no final decisions have been made about any particular location, this (transaction) is really about bringing two companies together to generate more growth and opportunity in aerospace.”

Aside from its Cedar Rapids headquarters, Grassley is lobbying United Technologies to keep Rockwell's existing Iowa production sites in Manchester, Bellevue and Decorah.

"I'm going to be advocating for maintaining these jobs in Iowa," he said. " I wish I could promise the people of Iowa that just because I advocate there isn’t going to be any job losses."

Yet Grassley acknowledged that there is more than just economics at play here: Rockwell Collins was created in 1939 by founder Arthur Collins, who began by making short-wave radio equipment in his basement.

"There's a lot of sentimentality for Iowa that you hate to lose," Grassley said.

That rich history, too, makes him think of Maytag.

That iconic brand's history dates back a century to an Iowa farmer who built the company's first washing machine to fill the seasonal void in the farm equipment business.

For years, Newton proudly claimed the title of "Washing Machine Capital of the World." At one time, Maytag employed more than 4,000 people between its headquarters and factory in Newton.

But by 2007, Whirlpool had shuttered both its headquarters and factory there.

"Everything was supposed to be OK in Newton and then there's no Maytag now," Grassley said. "I told Whirlpool it was just like cutting off the right arm of Iowans."

After his meetings this week, Grassley said he felt more optimistic about the future of Rockwell Collins in Iowa. But he remains cautious.

"I feel fairly satisfied, maybe a little less skeptical than when it was first announced," he said. "But still, I'm going to retain skepticism. If you don’t, then I haven't learned any lessons from Maytag."