Ground broken at Memphis Electrolux plant

On October 5, 2011, in News 2011, by Mark Norris,,
October 5, 2011

MEMPHIS, Tenn. – The chief executive of Electrolux Major Appliances North America said Wednesday that the company’s partnership with the public sector is an important factor in the deal that is bringing a new kitchen appliance plant to Memphis.

Jack Truong and several Memphis-area and state politicians attended a groundbreaking for the $190 million Electrolux plant at an industrial park in southwest Memphis on Wednesday.

The factory will make ranges, wall ovens and cooktops and is expected to begin operating in 2014. Electrolux says the plant will employ 1,200 people, while adding hundreds of more jobs to the area in secondary businesses such as supply companies and construction companies that will help build the plant.

Truong said the company chose Memphis over other cities partly because of its proximity to the company’s cooking appliances plant in Springfield, Tenn., and Memphis’ role as a U.S. transportation hub.

“It has a very good pool of human capital talent that we can draw from, and a commitment on the part of both the public sector and the private sector,” said Truong, president and CEO of Electrolux Major Appliances, North America.”

The public sector’s commitment includes $150 million in tax breaks to Electrolux that politicians used to secure the deal. An investigation by The Commercial Appeal reported that the company will receive millions of more dollars in tax breaks that had not been revealed when the deal was announced in December 2010.

The deal, which was secured during Gov. Phil Bredesen’s term in office, has been criticized by workers unions and politicians who say the tax breaks are too high, especially as the city manages a $60 million budget deficit.

Supporters of the tax incentives say the positive economic impact that a major appliance factory will bring to the area will outweigh the cost of the tax breaks.

“The most important day is when the first product rolls off this production line and we’re in full employment,” state Senate Majority Leader Mark Norris, R-Collierville, said after Wednesday’s event. “They’ve given us every assurance that they’re going to deliver, and then some, and so all we can do is hold them to their word and get on with business.”

Norris suggested that incentive-laden deals such as the Electrolux agreement may become less of a possibility moving forward.

“We’re focusing an awful lot of our effort now on existing companies that can grow and prosper in place, and trying to focus on yielding to what’s already here and what’s the best we already have to offer without having to put a whole lot of new capital into it to help them grow,” Norris said. “You never say never, but this is special.”

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