The Electrolux Group said it is reinitiating an investment in Springfield, Tennessee, and consolidating all U.S. cooking manufacturing into that facility. Electrolux also said it will transfer refrigeration manufacturing from its Santiago, Chile facility to other locations. The measures will lead to restructuring charges in the first quarter 2019 of approximately SEK 1B, whereof approximately SEK 300M will have a cash flow impact. "In light of changing market dynamics, increased raw material costs and current trade policy, the Springfield, Tennessee investment, estimated at $250M, is now designed for product development, flexibility and competitiveness. As Electrolux reinitiates the project and consolidates into Springfield, the company will also cease production at its Memphis, Tennessee facility. Production at the facility is expected to continue through 2020. The company will take a restructuring charge related to this of approximately SEK 800M in the first quarter of 2019. This charge is not included in the estimated investment cost," the company said. The Springfield, Tennessee expansion will be complete and production will begin during the fourth quarter 2020. The Anderson, South Carolina expansion will be complete and production will begin during 2019. Electrolux anticipates annual savings of approximately SEK 1B with full effect from 2022 as a result of the measures announced. "We are committed to investing in U.S. manufacturing and launching new Frigidaire kitchen products. By appropriately right sizing our business for a changing market, we can invest in the growth areas and drive profitability," said Alan Shaw, Head of Electrolux Major Appliances North America.
Electrolux downgraded to Underweight from Equal Weight at Morgan Stanley. Morgan Stanley analyst Lucie Carrier downgraded Electrolux AB to Underweight and lowered her price target for the shares to 210 kronor from 215 kronor.
Electrolux (ELUXY) is expanding its collaboration with Google (GOOG, GOOGL) by integrating connected kitchen products in Europe with the Google Assistant, enabling consumers to control products using voice commands. The voice integration will start with Electrolux smart ovens in early 2019.