EMCC European Monitoring Centre on Change

Electrolux Lehel Hűtőgépgyár

Company/Organisation:
Electrolux Lehel Hűtőgépgyár

Geographic Location

Country: Hungary
Region: Jasz-Nagykun-Szolnok; Eszak-Alfold; Alfod es Eszak
Location of affected unit(s): Jászberény

Company

Sector: Manufacturing
Manufacture of electrical equipment
27.51 - Manufacture of electric domestic appliances
Number Employed: 2841
Group: Electrolux AB

Employment Effects

Announcement Date: 10-09-2019
Planned Job Reductions min: 800
Planned Job Reductions max: 800
Type of Restructuring: Offshoring/Delocalisation
Employment Effect Start: 01-01-2020
Foreseen End Date: 31-07-2020

Additional Information

Domestic appliances manufacturing company Electrolux Lehel Hűtőgépgyár announced the decision to cut down its production of vacuum cleaners and refrigerators in the Jászberény plant. The production process in the Hungarian site currently entails the assembly of intermediate products received from external partners in Asia: the company plans to further save on production costs by outsourcing the assembly line to these external partners, taking advantage of cheaper labour costs. However, no explicit reference has been made to the wage growth that Hungary has experience in recent years.

As a result, the decision is expected to affect around 800 jobs. The actual number may be lower, as the company may offer redeployment to redundant employees in the Nyíregyháza plant. While the dismissals are planned to start in January 2020, the production will gradually wound down between May and July 2020. Negotiations have started with trade unions about the upcoming dismissals. According to the management, the company is willing to pay severance payments that are higher than the minimum required by the Labour Code, as to discourage employees from leaving their positions before the restructuring event kicks in.

The Hungarian government declared its intention to help redundant employees in their search for new jobs through dissemination of information on job opportunities and through vocational training programmes.

Sources: