© Electrolux Electronics Production | September 10, 2019
Electrolux to streamline and invest in manufacturing in Hungary
Following a strategic overview started earlier this year, Electrolux has decided to initiate a plan to improve efficiency throughout the Group.
The company plans to outsource parts of its current manufacturing in Hungary and invest in its Nyíregyháza refrigerator plant. These efficiency measures and redundancies related to the outsourcing will lead to restructuring charges in the third quarter 2019 of approximately SEK 1.6 billion (EUR 148.7 million). Back in late January this year, Electrolux announced an intention to spin off its Professional Products business area as a separate company. At the same time the company voiced a plan aimed at sharpening the organisation and accelerate profitable growth by creating four regionally focused business areas and reorganising key global functions. As the strategic overview related to these activities has progressed, Electrolux says it has now identified opportunities to improve efficiency in both the consumer and professional organisations. The resulting redundancies are anticipated to impact about 875 non-production positions globally, and relevant union consultations will take place. The company says that the activities will more than offset increased ongoing costs related to the separation of Professional Products. At the same time Electrolux is also currently carrying out a manufacturing investment program, totalling SEK 8 billion (about EUR 743.6 million) during 4-5 years as from 2018. As part of this, the company has decided to invest approximately EUR 100 million in automation, digitalisation and innovation capabilities in its production of refrigerators in Nyíregyháza, Hungary. In regards to the review of the overall competitiveness of the manufacturing operations in Hungary, Electrolux has decided to outsource production of vacuum cleaners from its Jászberény facility, and a significant part of the freestanding refrigerators currently produced there. This is anticipated to impact some 800 production employees, and relevant union consultations will take place. All and all, these measures are anticipated to generate annual savings of about SEK 500 million (EUR 46.5 million), with full effect as from 2022.