Velenje, 28 June (STA) - Slovenian household appliance maker Gorenje is considering to move the production of its Swedish subsidiary Asko to its base in Velenje due to Asko's poor performance, while it would keep the development department and the management of Asko trademark in Sweden's Vara, Gorenje said on Thursday.
The final decision about moving the production of dishwashers and washing and drying machines is in the hands of the Asko management board, which is to discuss the motion in the coming days, Gorenje noted.
The Slovenian company launched negotiations with Asko trade unions about optimisation and restructuring of the Swedish subsidiary in April. Should the company's plan proceed, some 90% of the 500 employees in Vara would lose their jobs.
Gorenje would move the production from Vara to Velenje in two phases. While the production of washing and drying machines would closed in Sweden on 31 January 2013 and launched in Velenje in April, the production of dishwashers would be terminated on 30 June 2013, and launched in Velenje in September.
Asko has been performing below plans and posting negative results despite measures that were launched to improve its operations when it was acquired by the group around Gorenje in 2010.
Apart from that, Gorenje noted that the situation in the household appliance industry had been deteriorating since the onslaught of the world-wide economic crisis. The competition has become fiercer, while the pressure is mounting on sales prices because of the situation on the market and the high costs of materials.
Gorenje has been launching various measures to optimise its profitability and competitiveness, including optimising its production, in line with its strategy for the 2012-2015 period.
The production in Vara represents some 7% of Gorenje's total production.