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Ikea Shuttering Its Only U.S. Factory; Shifting To Europe

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Swedish home furnishings giant Ikea is shutting down its only production facility in the United States, due to high cost of raw materials. The decision would imply 300 job cuts.

The company plans to end the production at its manufacturing plant in Danville, Virginia in December. The operations will be taken to its European plants, where cost of production is lesser.

The 930,000 square-feet facility, which was opened in 2008, employs around 300 people. The plant produces wooden shelves and storage units for Ikea stores in the U.S. and Canada.

Site manager Bert Eades said, "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."

The company said it will make efforts in the coming months to support its workers as they look for new jobs and training opportunities.

The Wall Street Journal reported, quoting a Danville official, that the city of Danville will lose about $500,000 in annual tax revenue from the shutdown of the plant.

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