DES MOINES (AP) — Appliance maker Electrolux announced Friday that it would close two Iowa plants by spring 2011, putting 850 people out of work as operations are moved to Mexico.
Electrolux Major Appliances North America said it would close the Webster City plant by early 2011 and a smaller facility in Jefferson by late 2010.
The Webster City plant employs about 880 people and produces top-loading washing machines. About 50 people work in the Jefferson plant, about 50 miles southwest of Webster City, which builds components for the washing machines.
The company says about 75 jobs will remain at a technology center in Iowa.
“This is a very difficult decision and certainly a last resort,” Electrolux spokeswoman Blythe Reiss said.
The moves come amid a drop in U.S. and global demand, Reiss said.
The company is consolidating its North American laundry manufacturing at a plant in Juarez, Mexico, that opened last year, Reiss said. That plant now has about 330 employees.
“Industry sales of laundry products have been impacted by the global economic crisis, and we've basically seen the continued decrease in consumer demand,” Reiss said. “We've got too much capacity, and we've had to make the decision — the tough decision — that is necessary given the economy and the competition to consolidate.”
Catherine Bergman, director of the Hamilton County economic development group, said the Webster City layoffs would ripple throughout the region's economy.
“It's going to have a domino effect,” Bergman said. “Certainly with the large number of people unemployed, it's going to affect the businesses, the grocery stores, the hardware stores, the restaurants, because people aren't going to have income that they're used to having.”
Electrolux's North American major appliance operations are based in Augusta, Ga. The company has headquarters in Stockholm, Sweden.
The company had 55,000 employees in 2008, of which 8,000 were in the U.S.
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