Electrolux plant to stay an extra year
Electrolux, the Swedish-appliance manufacturer, will stay in Memphis for an extra year and will likely close its heavily subsidized Memphis plant in 2021, not 2020, the company said Tuesday.
“When we announced the Memphis closure, we said that market demand would dictate the exact closure date. We are now in a position to narrow the time frame and expect Memphis production to continue into June 2021. An exact date will be determined early 2021,” said Eloise Hale, company spokeswoman, in response to The Commercial Appeal’s inquiries.
In late January, the company announced it would close its Memphis factory by the end of 2020, and the 530 workers who remained at the Memphis plant would lose their jobs.
Amid steel tariffs and Sears’ bankruptcy — a major customer, the company decided to consolidate its Tennessee operations and move production from Memphis to its Springfield, Tennessee plant. At its peak, the plant employed more than 1,100 workers, but never reached the 1,240 job goal baked into its tax incentive package.
The Economic Development Growth Engine for Memphis and Shelby County as well as the City of Memphis declined to comment Tuesday evening.
On Tuesday, the company said it remains in discussions with Memphis and Shelby County as to whether it will return the factory and 200 acres of vacant land that were gifted to the company as part of the massive incentive package used to lure Electrolux to Memphis.
When Electrolux announced its closure, it represented one of the region’s largest economic development bets
Samuel Hardiman
going bust. The company received more than $180 million in public subsidies when it relocated a factory from Quebec, Canada, to Memphis and most of those subsidies aren’t subject to claw-back provisions. The plant opened in 2014. The deal to bring Electrolux was negotiated in 2010 and approved by local governmental bodies in 2011.
The plant represents tens of millions of sunk cost for taxpayers. Memphis and Shelby County are still paying the principal and interest on bonds they issued for the project. The announcement also sparked outcry from local elected officials, who were briefed by the company months earlier and been told the plant wouldn’t close.
“Electrolux may be leaving Memphis, but they aren’t 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,” Memphis Mayor Jim Strickland said at the time.
In the time since the closure announcement, the company has agreed to terminate the property tax break it received as part of the incentive package. However, the company challenged the tax appraisal it received from the Shelby County Tax Assessor’s office, saying it was too high.