MEMPHIS, Tenn. — Electrolux announced on Thursday that it will close its Memphis facility.
The appliance manufacturer said in a news release it has decided to focus its attention and money on its Springfield, Tennessee, location north of Nashville. They will be re-initiating a $250 million investment into the facility and then consolidating all of its cooking manufacturing into that location as well.
That means the Memphis plant, which currently employs 530, will have to close. Production at the local facility, which opened in 2014, will continue through 2020.
Alan Shaw, head of Electrolux Major Appliances North America, said the company was committed to supporting Memphis employees and announced the changes two years in advance to provide transition time.
Memphis Mayor Jim Strickland said the city will meet with Electrolux officials Friday. The company was leaving Memphis, he said, but was not leaving because of Memphis.
“To hear about this announcement in a press release after being told a month ago that the plant wasn’t closing is disappointing to say the very least,” Strickland said in a release. “There is some consolation that Electrolux has committed to work with employees by allowing them to have time to find other opportunities, and from a community perspective, we will do all we can to help them find other employment.”
In 2010, city, county and state officials agreed to the following incentives to lure Electrolux to the city, according to the city: Two parcels of free land totaling 800 acres in Pidgeon Industrial Park; $40 million from the city and county; $2 million from the city and county for ancillary costs; a 15-year PILOT abating 90 percent of city taxes and 75 percent of county property taxes; a $95 million cash grant from the state of Tennessee; and a $3 million federal grant from Delta Regional Authority.
Just like they are exercising their option to leave, we will exercise our option to vigorously defend our investment. — Memphis Mayor Jim Strickland
Electrolux was scheduled to present its 2018 report to the EDGE board by Friday. That report would have included employment numbers and tax information.
According to records submitted to Shelby County’s Economic Development Growth Engine, at the end of 2017 Electrolux employed nearly 1,200 people, both full-time and contract employees, with average salaries of about $33,000.
“In 2010, the State, County and City acted in good faith and made an unprecedented investment in this company and in Memphis,” Strickland said. “Just like they are exercising their option to leave, we will exercise our option to vigorously defend our investment.”
A year ago, news outlets in Minnesota reported that an Electrolux plant in St. Cloud was also closing as a result of the reorganization to the Springfield, Tennessee plant, taking 900 jobs there.
Electrolux opened its southwest Memphis plant to fanfare from Gov. Bill Haslam and local officials back in 2014.
But last year, something changed.
In November, employees contacted WREG detailing rumors that the factory was closing, so we went to the plant to check it out.
“Last year this time, we were working every day except Sunday. All the work we could stand,” Oscar Robinson said. “Now everything is shallow. I think they’re down to four lines of production lines.
“Because of the shutdown of Sears, which was a big contract with Electrolux, they started downsizing this plant because of that,” he said. “I just think they’re closing this plant because they’re losing this contract with Sears. That’s what I think.”
Electrolux officials in November denied that, saying there were no plans to close the Memphis plant.
Memphis City Councilman Berlin Boyd said he has been in contact with corporate offices and the EDGE board, and he wants a return on the city’s investment.
“My goal is wanting to make sure that if there are any claw-backs or anything, the city of Memphis is entitled to the overall investment in Electrolux that we receive those funds,” Boyd said.