July 16 (UPI) -- Swedish furniture giant Ikea announced Tuesday it will close its only U.S. factory in Virginia and shift operations to Europe, where costs are less expensive.
The plant opened in 2008 and has 300 employees, and focused mainly on wood shelves and storage units. Ikea said the costs of raw materials are more expensive in the United States. The shift could create new 11,500 jobs in Europe.
"We made every effort to improve and maintain competitiveness of this plant, but unfortunately the right cost conditions are not in place to continue production," Bert Eades, a manager at the Danville, Va., plant, said.
It wasn't immediately reported to which country Ikea will move operations.
Virginia Sen. Tim Kaine warned of trouble in a tweet last year that said workers were concerned about the effects of U.S. tariffs on imported materials.
"They're OK for now, but because they import a lot of raw materials, they're concerned about what's to come," he wrote. "We have to stop this rash policy before it hurts even more U.S. businesses."
Ikea cut 7,500 jobs last year due to the rising popularity of shopping online, and bought TaskRabbit, an online marketplace for finding gig workers.