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ELECTROLUX

Electrolux phases out production home and abroad

Swedish appliance maker Electrolux is considering plans to phase out production at one of its factories in Motala in central Sweden. The company has also announced the closure of a plant in Spain which employs 450 people.

Published: 24 October 2009 11:26 CEST
Electrolux phases out production home and abroad

The Motala site produces cookers for the Nordic market and employs 240 people.

”The factory has made losses for the last three years and therefore something has to be done,” spokesperson Erik Zsiga said.

”It’s primarily to do with the shrinking market for free-standing cookers,” he explained.

Electrolux stated that union negotiations are already in progress.

A final decision over the planned phase-out will be made in December, and regardless of the outcome, production at the Motala plant will continue until the end of 2010.

On Friday the company also announced the closure of a washing machine factory in Spain in 2011 that employs 450 people.

“Unfortunately we cannot manufacture products at a competitive cost level, which is why we will stop production there,” said Enderson Guimaraes, head of Electrolux operations in Europe.

The plant in Alcala, near Madrid, produces washing machines for the Spanish, Portuguese, French and British markets.

After carrying out several reorganisations in recent years in a bid to cut costs, Electrolux announced the elimination of 3,000 jobs in December 2008 in response to the global economic slowdown.

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ELECTROLUX

Sweden’s Electrolux sees big US deal stopped

UPDATED: Shares in Swedish white goods giant Electrolux plummeted on Monday morning after US firm General Electric, which was poised to sell its appliance division to the Nordic firm, cancelled the agreement.

Published: 7 December 2015 09:50 CET
Updated: 7 December 2015 13:56 CET
Sweden's Electrolux sees big US deal stopped
Electrolux's office in Kungsholmen, Stockholm. Photo: Fredrik Persson/TT
Electrolux, which sells brands including Frigidaire, AEG and Zanussi as well as its own name, is already the world's second-largest home appliance maker after Whirlpool.
 
It announced a year ago that it wanted to buy part of General Electric (GE).
 
But the US firm said on Monday that it has decided to cancel the agreement to sell its appliance division to the Swedish group which had offered last year to buy it for $3.3 billion.
 
The US Department of Justice had threatened to sue Electrolux and GE over concerns the deal would create a duopoly and hand Electrolux a US market share of some 40 percent.
 
Electrolux said it had made extensive efforts to obtain regulatory approval, and said it “regrets” that GE had terminated the agreement while the court procedure was still pending.
 
“Although we are disappointed that the acquisition will not be completed, Electrolux is confident that the Group has strong capabilities to continue to grow and develop its position as a global appliances manufacturer”, said Keith McLoughlin, President and CEO of Electrolux in a statement.
 
Shares in Electrolux — one of Sweden's most famous brands — initially dropped by 14 percent after the decision was announced, and remained 12 percent lower by mid-morning.
 
The failed deal has already cost the company millions of kronor in preparatory work and General Electric has requested a termination fee of $175 million.
 
GE revealed in a statement that it was still interested in selling the appliance division.
 
Monday's announcement took some analysts by surprise.
 
“I was surprised this deal was contested by the Justice Department, but then when we saw what their concern, which was the creation of duopoly in a part of the appliance market, it began not to look so good,” said Karri Rinta, an analyst with Handelsbanken Capital Markets.
 
“It's back to square one for Electrolux in North America. This is a deal that would have made them much stronger in the US especially against Samsung and LG,” he said.