Electrolux closing refrigerator plants

Electrolux, Stockholm, Sweden, is closing or downsizing five of its refrigerator plants in European and the USA as part of a strategy of relocating production to low-cost regions, Hans Stråberg, president & CEO, said at the appliance maker's annual general meeting on 20 April.

Electrolux is investigating the possible closure of the refrigerator factory in Fuenmayor, Spain, with 450 employees and the downsizing of production at its refrigerator factories in Mariestad, Sweden and Florence, Italy. The downsizing concerns unprofitable product volumes and could affect 300 employees in Mariestad and 250 in Florence, said Stråberg. The company expects to complete the rationalisation by the end of 2008.

Electrolux is currently shutting down one of its Greenville plant is the plant in the USA, and moving to Mexico. Greenville is one of Electrolux's largest refrigerator facilities with 2700 employees. The group has also recently closed its facility in Västervik, Sweden and transferred production to a new plant in Hungary with an annual capacity of 560,000 units.

Stråberg said the group's preferred alternative is always to improve efficiency rather than close plants, but added that "in some product segments, that's not enough. The cost differences are simply too great." Electrolux is also putting pressure on its suppliers to cut their prices to compensate for major raw material price increases, he said.