Electrolux sees $70M charge in Q4 from North America consolidation
Electrolux provided an update on issues expected to impact operating income for its business area North America in Q4, primarily the consolidation of its U.S. refrigerator/freezer manufacturing and related transition to new product platforms. Electrolux expects costs related to the transition, volume effects and other matters in the quarter to have a combined impact of a total approximately $70M. Electrolux is currently investing approximately $250M in automation, digitalization and new food preservation product platforms at a new facility in Anderson, South Carolina. This new facility will replace manufacturing in St Cloud, Minnesota and manufacturing at an adjacent facility in Anderson. The company said, "The transition to the new facility has resulted in temporary capacity constraints impacting deliveries to some customers in the fourth quarter. As a result of this, as well as of increased costs, the transition is now expected to have a larger impact on operating income in the fourth quarter than the approximately USD -25 million communicated previously. Additionally, the operating income will be impacted negatively by two other factors: destocking at a key U.S. customer and accounting adjustments from prior periods." Electrolux expects the capacity constraints in Anderson to be gradually resolved during the first half of 2020.