They’re digging in the dirt in Tennessee — and building machines to wash those clothes later on. But will the business climate soil the deal?
On August 24, LG Electronics broke ground on a planned $250 million washing machine manufacturing facility in Clarksville, Tennessee, an hour north of storied Nashville. The company says it will be the world’s most advanced production plant for such machines; LG aims for an opening as early as the fourth quarter of 2018, and says the plant will be able to make new front- and top-loading washers every 10 seconds.
“We are proud to make further investments in America, to create even more U.S. jobs, and to bring state-of-the-art home appliance production technology to the great state of Tennessee,” said Dan Song, president of the LG Home Appliance and Air Solutions Company. “We couldn’t have selected a better location for our state-of-the-art facility. Today’s groundbreaking in Clarksville brings us another step closer to producing premium LG washing machines in the United States.”
The plant will cover 829,000 square feet of Montgomery County, and it is expected to bring at least 600 full-time jobs to the area. LG was joined at the groundbreaking ceremony by Wilbur Ross, Secretary of the Department of Commerce, who gushed about the promise of manufacturing on U.S. shores.
“The fact that one of the world’s most innovative and successful home appliance companies is establishing its largest U.S. home appliance operation here in Tennessee is a testament to the strength of our country’s business climate,” he said, according to a press release announcing the ceremony.
“We’ve got to do whatever we can to make sure that LG can open their facility and hire people.”
But U.S. trade policy may impact the equation. The Trump administration has imposed stiff tariffs on imported washing machines, at the behest of U.S. appliance giant Whirlpool, and some worry that raising the cost on imported LG machines may impact the company’s willingness to continue investing in the Tennessee plant.
“We’ve got to do whatever we can to make sure that LG is able to still open their facility and hire people,” Kim McMillan, the mayor of Clarksville, told Reuters. “We don’t want to see a repeat of what happened with Hemlock where they can’t open the plant.” In 2014, Hemlock Semiconductors abandoned plans for a $1.2 billion plant in the region over concerns with U.S.-China trade conditions.
As construction proceeds, the tariffs are having an impact: LG anticipates the cost of machines to go up. “As a result of the trade situation, we will be initiating pricing actions, which will be sent under separate cover shortly,” LG executive Thomas Yoon said in a memo obtained by CNNMoney.
In other words, now’s the time to buy that new washer of your dreams — before costs out it out of reach.