After a 6-month long investigation, European appliance maker Electrolux decided to initiate closure of its factory in Nuremberg, Germany.
According to the company, production will gradually be moved to Italy and Poland. Closure of the factory is expected to be complete by the end of 2007.
"This was one of the most difficult decisions I ever experienced during my time at Electrolux," said Johan Bygge, head of Electrolux Major Appliances Europe and Asia Pacific. "I am aware that this decision will affect, in a very negative way, many individuals, their families and relatives. However we finally had to conclude that there is no way to bridge the large cost gap that would make production in Nuremberg competitive."
The factory in Nuremberg has approx. 1,750 employees. Electrolux said the closure of the factory will incur a total cost of approximately SEK 2.3 billion (approx. U.S. $291.8 million), which will be taken as a charge against operating income in the fourth quarter of 2005.
In addition, Electrolux decided to initiate an investigation about a potential closure of the compact appliances factory in Torsvik, Sweden, which has 190 employees. The company said the restructuring cost for a potential factory closure will be announced when the investigation is completed.
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