The Electrolux Group will shut its St. Cloud factory at the end of next year and consolidate that freezer business into an older but expanding facility in South Carolina, company officials said Tuesday.
Electrolux, which employs about 900 workers in St. Cloud, will take a $75 million charge against first-quarter results because of the plant closing. While the charge is hitting the books now, the Minnesota freezer and refrigerator plant will stay open through 2019, officials said.
“This is a difficult announcement for our Minnesota teammates,” said Alan Shaw, head of Electrolux Major Appliances North America, in a statement. “We are committed to supporting them and are announcing this two years in advance to provide transition time.”
The St. Cloud employees were told on Tuesday, said Eloise Hale, spokeswoman for Electrolux Major Appliances North America, during a phone interview. They will be eligible to apply for jobs at any of the company’s four other U.S. locations, including Tennessee and South Carolina.
Company officials also met with St. Cloud city officials and the Chamber of Commerce on Tuesday to explain the timing and to request assistance with employee transitions when the time comes.
“We want to work with state and local governments” to ensure that workers affected by the shutdown can receive job retraining and job readiness training, Hale said.
Minnesota has a Dislocated Workers Program that often works with employers in transition. Hale said conversations with state officials about that specific program have yet to take place.
In his statement, Shaw said the closing in Minnesota will not shrink Electrolux’s commitment to American manufacturing.
“We are committed to the Frigidaire brand, our U.S. manufacturing base and are investing approximately $500 million in our business’ growth areas while also simplifying our operations,” Shaw said.
The company will spend $250 million to modernize its facility in Anderson, S.C. Electrolux began adding 800,000 square feet to that South Carolina plant last year. Construction should finish in 2019, officials said.
Electrolux will spend another $250 million adding 400,000 square feet of space to its Springfield, Tenn., location. That project should be finished in 2020.
The additions are part of a bigger plan expected to spur growth, efficiencies and new product development in North America and Latin America.
The latest plans by the Swedish-based appliance giant are not the first downsizing in St. Cloud.
Electrolux announced in 2015 that it would stop producing its Frigidaire small chest freezers in St. Cloud. A year later, it also stopped producing its large chest freezers there. At the time, the plant had about 1,000 workers.
Electrolux tried to buy GE’s appliance unit in 2015, but that $3.3 billion deal was blocked by the U.S. Department of Justice over antitrust concerns.