DANVILLE, Va. – After more than a decade, IKEA is saying goodbye to Danville at the end of this year.
IKEA Industry announced Wednesday that it will discontinue production at its Danville manufacturing plant in December.
The 300 people who will be out a job in December were given six months' notice and severance details are still being worked out.
The Machinists Union that represents the plant's workers released this statement Thursday:
“The IAM is meeting with our members in Danville, Va. and will keep our membership and the community informed of any updates. We are working on solutions, including conversations with IKEA corporate leaders and allies overseas, to stop the closure of the company’s Danville production facility. We hope we can work together with all stakeholders to stop this job loss.”
"We actually are going to be on site at 8 in the morning to have some continued discussions and find out how we can best work with them to find alternative placements for the employees that will be affected," said Telly Tucker, Danville Economic Director.
The plant closing didn't come as a surprise to those who knew the plant had issues making budget in the past, but what did some surprise some city officials was that the move wasn't motivated by labor costs, but by the cost of wood.
Local leaders told 10 News that IKEA told them that they could produce the same products they made here in Danville 70% cheaper in Europe.
Danville says this facility is one of the largest of its type on the East Coast, and they're reaching out to companies they've turned away recently to let them know of the new option.
The city says they still believe IKEA has been a good corporate citizen through all of this.
The plant, which opened in 2008, produces wood-based furniture for IKEA retail stores in the U.S. and Canada.
Production will move to existing IKEA facilities in Europe to meet the demand for affordable furniture products in North America.
“This was an extremely difficult decision to receive. 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, VA for the long-term,” said Bert Eades, Site Manager, IKEA Industry Danville. “We will do everything we can in the coming months to support our co-workers through this change as they look for new jobs and training opportunities.”
IKEA Industry says that despite many efforts to improve, the cost structure for production in Danville proved to be too high, especially when it came to raw material, resulting in pricing that is significantly higher than other IKEA Industry units making the same products in Europe.
While production is slated to end in December, including dismantling, IKEA will be present in Danville until next spring.
IKEA Industry has high ambitions when it comes to being a responsible employer and will work with the union and partner with federal, state, and local agencies to provide support and job search assistance.
The Danville unit is the only IKEA Industry production located in North America.