Electrolux lays off 150 at Sweden factory

Electrolux is to scale-down production at its refrigerator factory in Mariestad.

The cutbacks will mean that 150 staff will lost their jobs.

Stiff competition from low-cost manufacturers in the market for basic refrigerators and freezers for sale in southern Europe has led to the redundancies. The Mariestad factory will stop making bottom-range models and concentrate on more exclusive fridges for the northern European market.

“The Mariestad factory will remain the only Electrolux plant in Europe producing the most advanced chilling and freezing products,” said Petter Hjelmquist, managing director of the Mariestad site.

“But we will stop producing unprofitable products.”

When Electrolux started investigating the profitability of the Mariestad factory in the spring, it was expected that 300 jobs would go.

“Increased effectiveness at the plant has helped to make a number of our products profitable,” said Hjelmquist.

According to Hjelmquist, the factory will also focus on developing new higher-specification fridge and freezer models.

“New products and increased marketing have also reduced the need to make personnel redundant,” he said.

The redundancies came as no surprise for workers at the plant.

“It is naturally damned unpleasant, but still better than expected,” said Ola Bertilsson, chairman of the local branch of the Metall union.

The redundancies are mostly among assembly workers.

Ola Bertilsson is very critical of the company’s management.

“They have taken a lot of profit out of the company and have not invested enough,” he said.

“They demand a lot from us, the people who work to make the profit.”

“It is very unfortunate for those who are losing their jobs. We already have high unemployment in Mariestad, and this comes on top of 68 redundancies which were announced earlier.”

The latest redundancies will bring the workforce at the Mariestad plant down to 950 people by next year.

TT/The Local


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.

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.