MONTREAL—Electrolux is closing its Montreal-area plant within two years in a move that will throw about 1,300 people out of work.
The Swedish manufacturer of major appliances said it will begin transferring production to a new, unidentified facility beginning in mid-2012.
The plant in L’Assomption, northeast of Montreal, will close in 2013.
Two newspapers in Memphis, Tenn., the Daily News and the Commercial Appeal, cited unidentified sources in reporting that the jobs would be going to Memphis.
Electrolux will maintain about 75 jobs at its Montreal research and development centre, located on the same site as the plant being closed, for a further period of between six and 12 months.
Electrolux said in a statement the decision was difficult but necessary as it is facing fierce competition and needs to reduce costs.
“It allows us to continue to provide consumers quality products that are competitively priced,” said Billy Benson, vice-president of operations for the company’s North American arm.
Benson noted that other appliance makers have reduced their costs by shifting business to lower-cost markets.
“Apart from the challenges of the recession, consumers are demanding competitively priced products featuring the latest technologies, requiring manufacturers to continually reinvest in product innovation while managing costs,” Benson said.
After studying options to increase the competitiveness of its cooking-products division, the company determined that L’Assomption was simply not viable in the long term.
Benson said the company understands the impact the closure will have on the community and that was why the decision was announced so far ahead of time.
The company hopes it will give employees time to plan their future and for the community to attract new investment.
“This decision is not a reflection of the efforts of our employees, whose diligence we recognize, but a strategic decision based on these competitive factors,” Benson said.
Dave Chartrand, the president of the plant’s union local, said workers were stunned.
“They took it hard,” he said. “Several have 30 to 40 years seniority.”
Chartrand noted that management told the workers that competitors such as Whirlpool, LG and Samsung have plants in countries where labour is cheaper, such as Mexico and South Korea.
Tony Evans, an Electrolux spokesman, was asked in an interview if the company had tried to cut a deal with the union to lower costs.
He said the company “has worked very hard over the years to make the factory more cost-effective but the cost structure is such that it cannot be sufficiently competitive for the future.”
Chartrand said efforts by the union to save the plant when it met later with management were to no avail.
“Management said the decision was irreversible and had nothing to do with the quality of the workers here,” he said.
Evans said the company announced the closure now to give the workers a chance to find other jobs but Chartrand said that will be tough since the region was hit hard in the recession and there aren’t many jobs in the area.
“It’s 1,300 quality jobs,” he said, noting the Electrolux workforce, which includes a variety of trades such as welders and painters, is “very versatile.”
Chartrand said he wants to meet with provincial and federal government officials as soon as possible to see if a solution can be reached, including the possible sale of the plant.
Louise Francoeur, the mayor of L’Assomption, said the news was a “complete surprise” to her that will effect the local economy.
Electrolux did US$14 billion in business in 2009, selling a wide-range of products under brand names such as Eureka and Frigidaire.
© 2010 The Canadian Press