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Electronics Production | May 27, 2008

Electrolux close plant in Italy

In February 2008, Electrolux launched an investigation on how to increase the competitiveness of Electrolux refrigeration production in Italy. As a result of the investigation, Electrolux has decided to concentrate production of refrigerators in Italy to its factory in Susegana while ceasing production in Scandicci.
Additional investments will be made in the Susegana factory to increase efficiency, productivity and competitiveness for a sustainable future.

“The competitiveness of our Italian refrigerator plants has been weakening for several years, which is why we decided to carry out this investigation,” says Ernesto Ferrario, Senior Vice President Operations, Major Appliances Europe. “We are confident that the conclusions from the investigation, when implemented, will increase our competitiveness and profitability in the refrigeration business.”

In recent years, production capacity of refrigerators has grown rapidly, with an emphasis on Eastern Europe and parts of Asia. This development, in combination with increased global competition, has led to strong price pressure and subsequently a decline in margins.

A total of 450 employees will be affected at the Scandicci plant and approximately 300 in Susegana. Electrolux will assist in finding solutions to reduce negative impact on affected employees. Options considered include outplacement services and facilitation of re-industrialization of the Scandicci factory.

The outlined changes to the Electrolux refrigerator production in Italy are expected to be completed in the second half of 2009. The restructuring will incur a total cost of approximately SEK 600m of which SEK 540m will be taken as a charge against operating income in the second quarter 2008.

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