Ikea shutting down 'Billy' factory in Saxony-Anhalt

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.

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“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.