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Frigidaire, Electrolux facility in Memphis to close



The Memphis factory, which builds Frigidaire and Electrolux ovens and employs about 530 people, will close in 2020 according to Electrolux.

The company said the closure is part of a $ 110.5 million plan to streamline production that includes shutters a second factory in Santiago, Chile, and upgrading a plant in Springfield, Tennessee.

Electrolux, which owns Frigidaire, said in a press release that it is rethinking its strategy "in light of market dynamics change, increased raw material costs and current trade policies."

President Donald Trump implemented steep rates on most steel imports and aluminum last year. Trump said the move was intended to increase domestic production of the materials, but trading groups warn that it would lead to high costs for goods made of steel and aluminum.

Electrolux spokeswoman Eloise Hale refused to detail how the company has been influenced by commodity price increases and US trade policies, but she said steel is an "important material" for the company.

American appliances have also been hit by competition from cheaper products imported from abroad, Parks Associates analyst Brad Russell said.

The equipment market also damages the closure of many Sears sites while the company is navigating in bankruptcy. Sears for decades served as a mall for stoves, washing machines and other large appliances.
Sears was admitted for bankruptcy last year. At that time, Frigidaire was listed as one of its biggest creditors: Sears owes the brand $ 1
8.6 million, according to court applications. Hale refused to comment further.
Alan Shaw, the North American leader of large appliances by Electrolux ( ELUXF ) said in a statement that the company is "committed to investing in US production and launch of New Frigidaire Kitchen Products. "

It includes a plan to invest $ 250 million in an expansion of a 45-year-old plant in Springfield, Tennessee, about four hours northeast of Memphis.

But the expansion will not necessarily mean new jobs.

"The investment will go towards the modernization of the plant with automation and expansion of production," Hale said. "This is not about job growth."

Electrolux, which acquired US brand Frigidaire in 1986, is a massive device manufacturer with 56,000 employees and factories worldwide, according to its latest annual report.

The company's US portfolio includes plants in South Carolina, North Carolina and Minnesota where the company produces freezers, refrigerators and dishwashers .


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