Newton and the world of laundry appliances may not seem a likely hotbed for treachery and intrigue. But as the laundry industry begins to float a new line of horizontal-axis, or ““front loader,’’ washing machines, some companies are try-ing to soak their competitors by surreptitiously gathering information on future models. The practice, called competitive intelligence, is better known as industrial espionage. And though it is common to many industries, it has the venerable Maytag hunkered down in a town (population: 15,000) where people normally don’t lock their doors.
Since early 1994, when Maytag announced it was developing a high-efficiency washing machine to meet anticipated federal energy regulations, the company says it has been besieged by spies–Maytag sardonically calls them ““shoppers’’–using a variety of methods to gather information. One marketing exec reported getting a phone call from a man who falsely claimed to be an employee of another Maytag unit and wanted the names of people in Maytag’s front-loader division. Other employees report a steady string of fishy phone calls from ““students’’ who claim to be researching horizontal-axis technology. ““It’s pretty easy to tell,’’ says company spokesperson Linda Eggerss.
To protect a $50 million investment, Maytag has thrown a veil of secrecy over its new project. It asked a security consultant to hold ““secrecy seminars’’ with tips on detecting suspicious callers. The cover of a company newsletter asks, ““Who is really on the line?’’ and warns of ““modern pirates.’’ Workers got orange phone stickers that read LOOSE LIPS SINK SHIPS. Contractors must sign confidentiality agreements. Even now, a month before the rollout, the company refuses to release the machine’s name or price. Only a lone factory hand slips up, referring to the project with the code name Galaxy.
Maytag won’t say exactly what it’s hiding, but James Bond probably wouldn’t jump out of a helicopter for it. Frigidaire and Amana have both already released hori- zontal-axis models this year; they’re also standard in Europe and in many coin laundries. The machines use nearly half as much water and electricity, tumbling clothes in and out of water like a dryer instead of immersing them in an agitator tub like the top-loaders in 98 percent of American homes. The manufacturers have solved the standard horizontal-axis problems of small size, noise and reliability. What none of them has solved so far is the higher price: front-loaders are more expensive to make and go for around $1,000 (versus around $400 for a top-loader), though utilities in about 15 percent of the country are planning rebates.
Despite all their finger-pointing, Maytag execs admit to conducting a little competitive intelligence themselves, and say they knew all about Frigidaire’s machine before it debuted in January. ““It’s part of our business that people try to find out as much as they can,’’ says Leonard Hadley, Maytag’s CEO. ““But we need to protect ourselves.’’ For the residents of Newton, Iowa, that means exercising a little caution when the front bell rings–and closing the laundry-room door.
