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IKEA closing only US furniture factory, cutting 300 jobs

File photo. Photograph:( Reuters )

AFP Washington, United States Jul 16, 2019, 10.24 AM (IST)

IKEA said it will close its only US factory at the end of the year, cutting 300 jobs, as it will be more cost-effective to make the products in Europe and import them.

The global big-box furniture store, known for its Swedish meatballs and sometimes incomprehensible assembly instructions, said raw material costs were too high compared to plants in Europe meaning prices at the plant in the southern Virginia town of Danville were "significantly higher."

"We made every effort to improve and maintain the competitiveness of this plant, but unfortunately the right cost conditions are not in place to continue production in Danville, VA for the long-term," Bert Eades, the company's site manager, said in a statement last week.

The factory, which opened in 2008 to produce wood shelves and storage units for the US and Canadian markets, will close in December. 

"We will do everything we can in the coming months to support our co-workers through this change as they look for new jobs and training opportunities," Eades said.

IKEA, which has production units at 24 sites in nine countries, with about 20,000 workers, said it will work with labour representatives and US agencies to provide job search assistance.
 

Story highlights

The factory, which opened in 2008 to produce wood shelves and storage units for the US and Canadian markets, will close in December.