© Electrolux Electronics Production | February 01, 2019
Electrolux reinitiates US manufacturing investment
The Electrolux Group says it is reinitiating an investment in Springfield, Tennessee, and consolidating all U.S. cooking manufacturing into that facility. Electrolux also said it will transfer refrigeration manufacturing from its Santiago, Chile facility to other locations.
The measures will lead to restructuring charges in the first quarter 2019 of approximately SEK 1 billion (EUR 96.36 millon), whereof approximately SEK 300 million (EUR 28.91 million) will have a cash flow impact. “We are committed to investing in U.S. manufacturing and launching new Frigidaire kitchen products. By appropriately right sizing our business for a changing market, we can invest in the growth areas and drive profitability,” says Alan Shaw, Head of Electrolux Major Appliances North America, in the announcement. As previously stated, Electrolux is increasing its level of capital expenditure investments to drive targeted growth during the coming three to four years, particularly in North America and Latin America. These investments will be focused for product excellence, automation and innovation. As part of this plan, the company disclosed last year that it was planning investments to modernise and expand its facilities in Springfield (cooking products) and Anderson, South Carolina (refrigeration products). In light of changing market dynamics, increased raw material costs and current trade policy, the Springfield, Tennessee investment, estimated at USD 250 million, is now designed for product development, flexibility and competitiveness. As Electrolux reinitiates the project and consolidates into Springfield, the company will also cease production at its Memphis, Tennessee facility. Production at the facility is expected to continue through 2020. The company will take a restructuring charge related to this of approximately SEK 800 million (EUR 77.11 million) in the first quarter of 2019. The Springfield, Tennessee expansion will be complete and production will begin during the fourth quarter 2020. The Anderson, South Carolina expansion will be complete and production will begin during 2019. The increased global use of modular product platforms has also contributed to a decision to cease manufacturing of refrigerators at Electrolux factory in Santiago, Chile, to improve efficiency and sharpen the local product offering. The facility will continue to produce laundry and cooking products, which today make up the majority of its output. The company will take a restructuring charge related to the closure of the refrigeration production line of approximately SEK 225 million (EUR 21.68 million) in the first quarter of 2019.