Swedish-owned home appliance manufacturer Electrolux is planning to consolidate the manufacture of cooking appliances in North America by building a new manufacturing facility in Memphis, Tennessee.
After investigating potential locations in the United States and Mexico, Electrolux has chosen Memphis because the site offers an optimal geographical location for customers and suppliers, the company said in a statement.
As Electrolux also currently operates acooker factory in Springfield, Tennessee, the new factory in Memphis will establish the state as a cooking production center for the company in North America, offering advantages of scale by leveraging resources such as R&D, talent, labs and supply base.
Production in Memphis is expected to start in mid-2012, and the factory is expected to be fully operational in 2013.
Electrolux announced at the same time that its factory in l’Assomption, Quebec, Canada, will be closed. Transfer of production from l’Assomption will begin in mid-2012, and the factory will close in the fourth quarter of 2013.
The new manufacturing site, which represents an investment of US$190 million, will receive will receive up to $132 million in incentives from state and local governments, according to a report Wednesday in The Commercial Appeal newspaper in Memphis.
Electrolux said cost pressures were a major factor in its decision to close the L'Assomption plant. The strength of Canada's currency against the US dollar has become a serious issue for Canadian plants whose output is mostly sold to the US.
Electrolux is not the first manufacturer to make this move in recent years, with farm machinery manufacturer Deere & Co. and commercial truck maker Freightliner having already moved facilities to the US.
The Electrolux relocation is part of a restructuring program started in 2004 with the goal of saving 3.4 billion Swedish kronor annually ($498 million) by 2013.
