FILE - In this Thursday, Jan. 9, 2014, file photo, workers assemble ovens at the new Electrolux home cooking appliance factory in Memphis, Tenn. The Federal Reserve releases industrial production for January on Friday, Feb. 14, 2014. Electrolux says it is stopping production at its Memphis, Tennessee, factory while investing $250 million in a separate facility in the state. The Stockholm-based maker of Frigidaire products said Thursday that it is consolidating all U.S. cooking manufacturing into its facility in Springfield,(AP Photo/Adrian Sainz, File)
Republished January 31, 2019 - 1:04 PM
Original Publication Date January 31, 2019 - 11:01 AM
MEMPHIS, Tenn. - Swedish appliance maker Electrolux said Thursday it plans to stop production within two years at its factory in Memphis, Tennessee, while investing $250 million in a separate facility in the state.
The Stockholm-based maker of Frigidaire products said it is consolidating all U.S. cooking manufacturing into its facility in Springfield, Tennessee. The company said in March that it was putting its plant expansion in Springfield on hold, citing President Donald Trump's tariff announcement as the reason. Springfield is about 30 miles (about 50 kilometres) north of Nashville.
Electrolux said production at the Memphis facility is expected to continue through 2020. Buttressed by $150 million in tax incentives, the company opened its Memphis factory in 2014 with the goal of producing 600,000 ovens annually, while employing 1,200 workers.
When it opened, the factory was viewed by local politicians as a long-term job producer. But critics decried the tax incentives, which came at a time when Memphis was experiencing budget problems.
About 530 people currently work at the Memphis factory, company spokeswoman Eloise Hale said.
"We are very committed to supporting our Memphis teammates and are announcing these changes two years in advance to provide transition time," Alan Shaw, head of Electrolux Major Appliances North America, said in a statement.
The company's investment plans in Springfield, announced last January, included modernizing and adding 400,000 square feet (37,160 square meters) to the plant. But the expansion plans were put on hold after Trump's announcement of new tariffs on imported aluminum and steel.
The company is now moving forward with the expansion, "in light of changing market dynamics, increased raw material costs and current trade policy," its statement said.
Electrolux has said it is increasing investments to drive growth during the next three to four years. Production of cooking products is scheduled to begin during the fourth quarter of 2020 in Springfield, the company said. Expansion of its facility in Anderson, South Carolina, will include production of refrigeration products beginning this year, Electrolux said.
Electrolux also said it is ceasing manufacturing of refrigerators at its factory in Santiago, Chile.
News from © The Associated Press, 2019