Electrolux is continuing its restructuring to cut production costs by closing a factory operated by its AEG unit in the southern German city of Nuremberg. Some of the 1,750 employees donned union-distributed red caps at they went into work to show that they intend to fight to the closure. Production from the factory, where they make washing machines, dishwashers and dryers, is to be moved to Italy and Poland by the end of 2007.
The company said the decision came after it spent six months analysing the plant’s profitability and labor costs. Several weeks of talks between management and unions failed to reach an agreement. Electrolux said savings proposed by the union were less than half the amount it needed. The Swedish firm, which is the world biggest maker of household appliances, has shut 15 plants in the last three years.
It is struggling with increased competition and higher raw-material prices, particularly steel. Electrolux has moved manufacturing from the US and western Europe to countries like Mexico and Hungary.