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UK Electrolux factory to close

14/12/2007

Home appliance maker Electrolux has confirmed it is to discontinue production at its cooker factory in Spennymoor, County Durham.

Electrolux has said it will incur a charge of approximately 390 million Swedish crowns (£29.6 million) over the closure of the plant, which employs around 500 staff.

Some production will be moved to the company's factory in Swidnica, Poland following the move.

The decision to close the factory, which manufactures cookers for the UK and Irish markets, comes after an investigation over the future viability of production at the site.

Confirming the plan to close the Spennymoor plant, Electrolux stressed it had faced increasing price pressure as a result of its competitors moving their production facilities to countries with a lower cost-base.

Company bosses confirmed the growing popularity of built-in cookers, as opposed to free-standing ones, among consumers had also undermined the competitiveness of the UK factory.

"Today the factory generates a loss. Running such a factory is not sustainable, which is why we have decided to consolidate our UK cooker manufacturing into our factory in Swidnica in Poland," said Magnus Yngen, head of Electrolux's major appliances business in Europe.

"Closing a factory is always the last resort and is not something we strive to do," he stressed.

Mr Yngen expressed thanks to employees at the Spennymoor plant, who he revealed had submitted ideas to Electrolux about potential improvements and cost savings at the site.

But he said the cost gap faced by the company in regard to the operation of the plant was "simply too large to bridge".

Electrolux did not give a date for the final closure of the factory, but confirmed production at the plant was expected to continue throughout 2008.