The company's Vastervik vacuum cleaner factory would close under the plan

The company's Vastervik vacuum cleaner factory would close under the plan

Electrolux said it is considering shifting vacuum cleaner production from Sweden to Hungary where it would outsource moulding operations for the product. The company said it was investigating plans to close a vacuum cleaner factory in Vastervik and switch production to its plant near Budapest, Hungary.

Electrolux Floorcare vice president of product supply Ola Carlsson told PRW.com the division planned to outsource all moulding at the Hungarian site should the move go ahead. He said the Swedish site has 15 moulding machines, and carries out one-third of its moulding in-house. He added the division also outsources moulding to local Swedish suppliers and buys some smaller parts from the Baltic states.

Carlsson said Electrolux’s Hungarian site is dedicated to assembly, with no moulding facilities. “It’s a clear strategy to have low investment in manufacturing – any investment will be in new products.” A shift in production would save the company around Skr150m (E16m) a year, after it spent Skr200m (E22m) on the move.

Electrolux currently employs 500 people at the Vastervik site, and makes vacuum cleaners for the European market. The company said it would talk to unions about the move. Electrolux results for 2003, announced today, show a 7% dip in sales to Skr124bn (E13.5bn), while profits fell by a similar amount to reach Skr7bn (E785m).