London (CNN Business) Ikea is shutting down its only furniture factory in the United States.
The Swedish company will end production this December at its plant in Danville, Virginia. Operations will move to Europe, where the company says it can cut costs
"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," site manager Bert Eades said in a statement.
The Danville facility, which opened in 2008, employs 300 workers. Wooden products including shelves and storage units are made at the plant.
In justifying its decision, Ikea pointed to raw material prices, which it said are higher in the United States than Europe. Ikea operates plants in European countries including Poland, Russia and Sweden.
MasonMX5 on July 17th, 2019 at 03:31 UTC »
U.S Ikea Factory worker here, please keep us all in your thoughts. The reason for shutdown is because of 170% cost to produce when compared to Europe and China. Our manufacturers of HDF, Particleboard, and honeycomb were charging a plethora more than Europe and in addition to this we experienced much worse quality than Europe. Unilin (our producer of HDF) has market control over their material meaning they can charge us whatever they want for very poor quality (wavy, buckshot, etc) product.
The next nearest supplier is in Texas and although they produce good HDF to our specs, transport cost is too high. In addition to this, the nails that sealed our coffin were a cost reduction measure to take HDF from 3.0MM to 2.5MM across IKEA global and Unilin said it would cost us the same.
I was a Quality auditor (final inspect) at Danville's factory and have always been a machine operator. There have been tough and trying times here and also great times as with any place. IKEA here really helped to get my foot in the door as a more technical job and served as a great baseline for factory work.
IKEA Danville was in no way exempt from some pretty bad business dealings in the past that overall led to this. It has been known that there were issues with Swedwood when it first arrived here, but I can say that the Swedish people, and particularly Roger Svensk made it much more pleasant over time. I think if we invested in our own raw material factories, we could have succeeded, but I am just an optimistic low level coworker with no business insight beyond what I am told and observe.
I saw someone here mention that a parent in the store might have insight and that couldn't be further than the truth. The technology we possessed at the Danville factory was at times groundbreakingly new. Our BoS line was even a "test" high output line. I think hiring smart labor and finding the lack thereof in Southern Virginia could have been a major downfall, so I won't argue that.
This does not have anything to do with Trump, but I am curious to see if he will hold to his word and react to these American jobs being lost, particularly around an election year in a democrat swing state.
Personally I will be taking the opportunity to use the trade act to return to school and invest time in myself to become better. I am the only family member who has not graduated from college and I am hoping this will bless me with the opportunity to at least finish an associates level program.
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I would also like to say as a Quality final inspector, I had the opportunity to compare our particleboard and HDF with Europe's when we would receive shipments of European PB to help stimulate us. The wood was MUCH higher quality from Europe (smoother, denser, less/no chipouts) despite coming across the Atlantic ocean in shipping containers.
lethbridge on July 16th, 2019 at 18:09 UTC »
hope they leave me one of those little Allen keys, I can never find it
ImitationFire on July 16th, 2019 at 17:53 UTC »
Does this mean I have to assemble my Ikea furniture in Europe now?