DANVILLE, Va. (WFXR News) IKEA Industry announced on Wednesday it will discontinue production at its Danville, Va. location in December 2019.
Production will move to existing IKEA Industry manufacturing units in Europe to meet the demand for affordable furniture products in North America.
The plant been operating since 2008 and currently employs 300 co-workers. Wood-based furniture is produced for IKEA retail stores in the U.S. and Canada.
Gary Miller, a Danville City Council Member, says the loss of the IKEA factory comes as surprise.
“We were naturally very disappointed. IKEA’s been a very valuable manufacturing citizen for over 10 years,” said Miller.
The production will keep running until December 2019 to allow IKEA Industry co-workers time to find new employment and training opportunities.
According to a statement from IKEA Industry, “the cost structure for production in Danville is too high, especially when it comes to raw material, resulting in pricing that is significantly higher than other IKEA Industry units making the same products in Europe.”
IKEA Industry concluded that conditions are not in place to continue and develop production in Danville.
The Danville unit is the only IKEA Industry production located in North America.
IKEA Industry says it will work with the union and partner with federal, state, and local agencies to provide support and job search assistance.
Some individuals believe other businesses in the area will also be impacted by the shutdown.
“I think it’s going to affect us a lot because they come in in the morning when they’re going to work and get breakfast and get gas and whatever they want to take with them to work. And on lunch, they come in here and get lunch and when they’re leaving from work they stop in here,” said Randi Dykes, a local gas station manager.
While it is a upset, City Councilman Miller says they still have more developments coming.
“We go on. We’ve had setbacks before, but we’ve had some major positive announcements recently,” said Miller. “Light House food corporation just announced 160 jobs yesterday.”
Although they’ll be losing 300 jobs when the factory closes, City Councilman Miller says with all the new announcements coming, there will be more jobs coming than the ones they’re losing.