In 2012, workers at a planned Memphis factory could begin producing hundreds of thousands of kitchen appliances a year, providing momentum for the city’s growing manufacturing base.
Electrolux, the Swedish appliances giant, will relocate some of its kitchen-appliance manufacturing operations from Canada to Frank C. Pidgeon Industrial Park in Southwest Memphis, according to multiple sources.
The move is expected to bring an influx of 1,200 highly sought manufacturing jobs to Memphis, wounded by the global recession.
In addition to the direct jobs, the project could indirectly create another 1,500 to 2,000 jobs through suppliers and support businesses.
Memphis Mayor A C Wharton declined to comment on the project.
"This is great news for the city of Memphis," said U.S. Rep. Steve Cohen, D-Tenn. "Memphians are capable and ready to work. The new jobs created by Electrolux and its suppliers will be a great shot in the arm for our city and economy."
Electrolux Major Appliances North America announced Tuesday afternoon that it would close its manufacturing facility in L’Assomption, Quebec, and transfer production to a new, unnamed facility beginning in mid-2012.
The Canadian plant produces cooking appliances and employs about 1,300 people.
"This was a difficult but necessary decision to maintain our competitiveness and innovation in the cooking-appliance business," Billy Benson, vice president of operations for Electrolux Major Appliances North America, said in a statement.
Several officials said a major economic development announcement would be made at the Greater Memphis Chamber of Commerce annual luncheon today.
The secret recruiting of Electrolux, named a "Global Superstar" this year by Forbes magazine, took place in recent months under the code name "Project Journey."
In November, Wharton, Shelby County Mayor Mark Luttrell and state economic development leaders traveled with Greater Memphis Chamber officials to Electrolux’s North American headquarters in North Carolina for a crucial recruiting pitch.
Electrolux, the world’s second-largest home appliance maker, said in November that it planned further cost-cutting measures as it battles low demand and intense competition. The company has been gradually shifting production to low-cost locations to help offset lagging demand.
In 2009, the company had sales of more than $14 billion and 51,000 employees. Electrolux products include refrigerators, dishwashers, washing machines, vacuum cleaners and cookers.
The company doesn’t expect renewed growth in North America until the first quarter of next year. Sales remain lukewarm following the end of government subsidies for energy-efficient appliances.
Memphis was competing against a site in Mexico near the U.S. border. Electrolux already has significant manufacturing operations in Ciudad Juarez.
In 2005, the company closed what was then the world’s largest refrigerator assembly plant in Greenville, Mich., shifting thousands of jobs to Mexico. The company also has smaller plants in Mexico which make parts for the firm’s Eureka brand of vacuum cleaners.
But a drug war along the border with Mexico that has claimed thousands of lives continues to rage. In March, three people connected to the U.S. consulate in Juarez — including the manager of an assembly line for Dallas-based information technology company Affiliated Computer Services Inc. — were gunned down, sending shockwaves through international business circles.
The Electrolux operation will be a boost to fledgling Pidgeon Industrial Park, which has about 2,500 undeveloped acres.
Pidgeon Park, just off Interstate 55 in Southwest Memphis, has long been considered a major untapped asset for industrial development and job creation. It is home to a large CN Railway terminal, Nucor Steel, a TVA power plant and a city sewage treatment plant.
The Electrolux operation is expected to put a dent in the city’s stubborn unemployment rate, which was at 10.6 percent in October, above the Shelby County rate of 9.8 percent and national rate of 9.6 percent, according to the Bureau of Labor Statistics.