Business & Money
Photo: DPA

Ikea shutting down 'Billy' factory in Saxony-Anhalt

Published: 24 Sep 09 14:12 CET
Online: http://www.thelocal.de/money/20090924-22133.html

Workers in Gardelegen, Saxony-Anhalt have assembled Ikea’s famed “Billy” bookcases since 1982. But the factory is now closing its doors as the Swedish company pursues cheaper Slovakian labour, weekly magazine SuperIllu reported on Thursday.

“We feel betrayed and sold out,” Rainer Bromann, head of the Swedwood Gardelegen workers’ council, said of the 178 employees at the plant. “But it always gets cheaper. It's Slovakia now until they get the euro and Ikea looks for an even cheaper country.”

For 27 years, workers in the formerly communist East German town in Saxony-Anhalt have had a hand in producing some of the 41 million Billy bookcases sold worldwide. In 1992, Ikea subsidiary Swedwood bought the factory and increased the workforce. But it will now be shuttered on September 25, just ahead of the ubiquitous bookcase's 30th anniversary next month.

Workers told SuperIllu that the factory had become a multi-generational part of town life.

“That’s why it was particularly bad when we just got a curt message about the closing in late July during company holidays. Since then there’s been a deep silence how and if things will go on,” Bromann told the magazine.

According to employees, their offers to take pay cuts went ignored.

“We were making money here, but it's obviously still too expensive for the Swedes,” Bromann continued.

But Swedwood spokeswoman Ingrid Steén told SuperIllu that the company has been struggling for 18 months and is making “significant loses.” She called the factory closure “painful” and said the company had also laid off employees in Sweden. Meanwhile parent company Ikea reported increased yearly sales of seven percent.

Swedwood’s Eastern Europe manager said the company had also downsized at its Slovakia plant and that the country would not profit from the German closure.

SuperIllu said that the factory closure confirms a trend of transferring Ikea's production to low-wage countries like Poland and China – even though Germany remains the biggest market for its goods.

The Saxony-Anhalt Economy Ministry is reportedly looking for an investor to buy the factory. But enraged employees demonstrating outside the building told the magazine they were sceptical of finding a saviour as Germany just comes out of recession.

The Local (news@thelocal.de)

What do you think? Leave your comment below.

Fark It! Digg This Facebook  Share everywhere
Send to a friend Printable version Twitter This

Your comments about this article:

16:52 September 24, 2009 by darwiniandemon
"But it always gets cheaper. It's Slovakia now until they get the euro and Ikea looks for an even cheaper country."

Sorry Rainer Bromann, head of the Swedwood Gardelegen workers' council, but Slovakia started using the ? this year...
16:56 September 24, 2009 by William Thirteen
hmmm...do you think the original 'Saxonish' Billys will now be vintage?
22:57 September 24, 2009 by jillesvangurp
What exactly does assembling mean for Ikea furniture? I put quite a few billies together on various occasions, there's not much pre-assembled.
ADD YOUR COMMENT   (YOU MUST LOG IN OR REGISTER TO MAKE A COMMENT)
For comment quoting and other advanced formatting features,
try posting via this article's discussion forum page instead.
Business & Money headlines
Photo: DPA

China claims Germany's export crown

China overtook Germany last year to become the world's leading exporter as German trade suffered its sharpest slump since 1950, figures from Germany's Federal Statistics Office showed on Tuesday. READ »

Photo: DPA

Opel boss unveils plan to slash 8,300 jobs

Opel boss Nick Reilly presented on Tuesday a plan for the future of the ailing General Motors unit, with a forecast loss of 8,300 jobs from a total of around 50,000, as expected. READ (1 COMMENT) »

Photo: DPA

SAP shares slump amid leadership shake-up

Shares in German-based SAP, the world's largest professional software group, slumped Monday after the company said Leo Apotheker would step down as chief executive officer to be replaced by two company insiders. READ »

Photo: DPA

Watchdog eyes Opel state help

The European Union’s competition watchdog vowed on Sunday to keep a tight rein on how state aid is given to ailing carmaker Opel, as the firm’s parent company prepares its pitch for help from countries including Germany. READ »

Photo: DPA

Bonuses are back for Opel managers

Top managers at the beleaguered carmaker Opel will once again be eligible for bonuses, sparking anger from company workers facing layoffs, the head of the staff association said Saturday. READ »

Henry Ford in Cologne in 1930. Photo: DPA

40 millionth Ford rolls from production line

The 40 millionth Ford “Made in Germany” rolled from the US carmaker’s plant in Cologne on Friday – some 85 years after starting production in the country. READ (5 COMMENTS) »

Photo: DPA

New data stokes fears of uncertain economic recovery

Fears that uncertain recovery in Europe's biggest economy could stall were stoked Friday when data showed that German industrial production suffered a sharp setback in December. READ »

Photo: DPA

Deutsche Bahn closes deal on British train network

Germany's state-owned railway company Deutsche Bahn said Thursday it had won a contract to operate a regional train network in the northeast of Britain. READ (2 COMMENTS) »

Photo: DPA

Deutsche Bank rebounds with strong 2009 profits

Germany's biggest lender, Deutsche Bank, bounced back last year with a robust net profit of €5 billion following a loss of €3.9 billion in 2008. READ (2 COMMENTS) »

Photo: DPA

Hartz IV welfare benefits considered too low

A solid majority of Germans believe welfare benefits are too low in their country, according to a survey published on Wednesday. READ (12 COMMENTS) »

More Business & Money

See all ads | Join the Marketplace

Jobs in Germany, in English

571 jobs in Germany, in English
397 new jobs this week
78 new jobs today

ALL JOBS »

More business news from Germany

Latest Business & Money news from Sweden
News from the Goethe-Institut
News from DeutschlandOnline
Advertising 2.0
MARKETPLACE - promote your business to half a million targeted readers a month on The Local. Find great products and services in Germany or tell The Local's readers about your own business.
CLICK HERE>>>
Sales managers - country wide
The Local is seeking talented and experienced media sales professionals for our online advertising sales in Germany
FULL JOB DETAILS
Best Foreign exchange rates dealing - all major currencies
Foreign Currency Direct voted as offering the best exchange rates. All currency exchange transactions are managed by Ben Amrany. We guarantee that readers of The Local/Toytown receive a 5 star service
FULL DETAILS HERE>>>
JOB: Nursery Teacher / Early Years Educator
Wolfsburg nursery, specialising in an Early Years Programme, seeks English speaking nursery teacher
FULL JOB DETAILS
JOB: Admin and academic positions
GBCM is currently seeking experienced and ambitious full/part-time staff in the academic field as well as a flexible office manager for roles in an international environment
FULL JOB DETAILS

The Local Europe GmbH
Linienstrasse 214
10119 Berlin
Germany