Following a thorough investigation about the future viability of production at the factory in Spennymoor, Electrolux has decided to discontinue production at the plant. To improve competitiveness some production will be phased out altogether while some production will be moved to the Electrolux plant in Swidnica, Poland.
“Our competitors have to a large extent moved their production facilities to countries with a lower cost-base, which has resulted in increasing price pressure,” says Magnus Yngen, head of Electrolux Major Appliances Europe. “This development in combination with a shift in consumer preferences, moving from free standing cookers to built-in cookers, has eroded the competitiveness of our Spennymoor factory. Today the factory generates a loss. Running such a factory is not sustainable, which is why we have decided to consolidate our UK cooker manufacturing into our factory in Swidnica in Poland.”
“Closing a factory is always the last resort and is not something we strive to do,” continues Yngen. “In this specific case, I would like to express my appreciation to the employees of the Spennymoor factory for submitting constructive ideas on improvements and potential cost savings. I do regret that despite the efforts made by our employees the cost gap is simply too large to bridge.”
Production at the factory is expected to continue throughout 2008. The closure of the factory will incur a total cost of approximately SEK 390 million, which will be taken as a charge against operating income in the fourth quarter of 2007.
The Spennymoor factory manufactures free-standing and built-in cookers for the UK and Irish markets and has approximately 500 employees.
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Electrolux is a global leader in home appliances and appliances for professional use, selling more than 40 million products to customers in 150 countries every year. The company focuses on innovations that are thoughtfully designed, based on extensive consumer insight, to meet the real needs of consumers and professionals. Electrolux products include refrigerators, dishwashers, washing machines, vacuum cleaners and cookers sold under esteemed brands such as Electrolux, AEG-Electrolux, Zanussi, Eureka and Frigidaire. In 2006, Electrolux had sales of SEK 104 billion and 56,000 employees. For more information, visit http://www.electrolux.com/press.
