Good-bye to GE Appliances

Posted by: Diane Brady on May 14, 2008

Ask many Americans what they associate with General Electric and they’ll give you two words: light bulbs and ovens. Ask investors what they would like to see GE dropkick from its family and you’ll often hear the same words.

Now a piece in The Wall Street Journal says GE is about to put its appliances business on the auction block. While GE won’t comment on the report, offloading the unit makes a lot of sense. It could bring up to $8 billion into GE’s coffers and get rid of a business that no longer fits GE’s mission. GE may decide to spin off the business or get into a partnership, too.

Pundits will likely attribute the timing of this move to GE’s startling earnings miss last quarter. On April 12, GE announced a 6% drop in first-quarter earnings, related to the credit crunch, and CEO Jeff Immelt cut the company’s profit outlook for the year. The stock plunged 13%, amid a spate of analyst downgrades. The stock price issue has dogged Immelt, who took over for Jack Welch in September 2001 with the stock trading around $40 a share; it’s now hovering above $32.

Immelt has to do something to show he’s steering the $173 billion company in a better direction. And the $7 billion appliances business has been a sore point with Immelt for some time.

First, it’s not global. GE sells the bulk of its appliances to U.S. customers. That makes it hostage to the vagaries of the U.S. economy and, even more, to the volatility in the U.S. housing market. During the housing boom, that allowed the business to rack up double-digit earnings growth again and again. Now, it’s going the way of real estate prices.

Second, the business doesn’t let GE truly differentiate itself from competitors. There aren’t a lot of barriers to entry in building dishwashers, ovens and refrigerators. Everyone can put on the bells and whistles these days, and manufacture in cheaper markets than Louisville, Kentucky. And unlike, say, an aircraft engine or power turbine, there’s only so much service you can build around a microwave.

The appliances business has been a drag on profit margins, too. GE’s Industrial segment, of which appliances are a big part, kicks in a little more than 20% of GE sales but accounts for only 10% of overall earnings. Considering that, the appliances sale “is not surprising,” says James Ragan, an analyst at Crowell, Weedon & Co. “Immelt has made it clear they would be getting rid of lower-margin businesses.” Analysts cited a similar rationale for last year’s $11 billion sale of GE’s Plastics division to a Saudi Arabian company.

With its low margins and dim prospects, this is a business that should have left the GE fold while Jack Welch was still in charge. It’s about time they got rid of it.

A lot of folks within GE are no doubt feeling nostalgic about the prospect of losing an iconic part of the portfolio. But, from the moment Immelt stepped into the job, he recognized that the company’s appliance business was ultimately destined to be a thing of the past. The housing boom just allowed him to put off the decision for a while.

A complication of any potential sale of the unit, points out Ragan, is the fate of the famous GE mark on all those fridges and microwaves. “A buyer would want to have it,” Ragan says. Indeed, consider Sweden’s Electrolux, which sells its appliances with of the familiar names Frigidaire and Westinghouse (a far less successful conglomerate than GE). It’s unclear how appealing the GE Appliance unit would be, should GE not allow a buyer to continue using its brand.

(and thanks to Brian Hindo for additional reporting on this one)

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Reader Comments

amaris

May 14, 2008 06:49 PM

FYI

anthony

May 14, 2008 06:50 PM

FYI

Milton

May 14, 2008 07:01 PM

So where is this story headed? GE Appliances likely going to a company such as Electrolux, which fires the bulk of the American employees and offshores production to China, Mexico, or Korea. How unfortunate.

Strategery

May 14, 2008 07:12 PM

I would dump the appliance division, if it makes business sense. Also, the light bulb market is going to Chinese-made CFL's anyway. However, GE will no longer be a household name if it drops these divisions (which isn‘t necessarily a bad thing).

Steve

May 14, 2008 07:32 PM

First appliances, now on to NBC!

Sad To See

May 14, 2008 07:34 PM

Would be very to imagine GE without the consumer appliances division

bobbi

May 14, 2008 07:36 PM

As a shareholder and consumer I am dissapointed in this decision. The brand name alone to me meant quality ..
It' been advertised on the Oprah show and I was proud to see that name.

The only thing I have heard is the light bulbs at the end of the bulb have not been of the best quality.

Dion Smith

May 14, 2008 08:50 PM

GE's steps symbolize what is wrong with corp America. Instead of investing for the long-term, all are insterested in short-term profits and their PE ratio. This cannot succeed in the long-term. Utilize the heritage and name of GE to introduce products the American public....

Michael Brown

May 14, 2008 09:35 PM

What will be the incidence of all this on GE stock price ?

Diane

May 14, 2008 09:38 PM

The general consensus is that, the more GE is able to exit these problematic businesses, the more people will feel comfortable in buying the stock. Of course, there are other issues that make some people wary -- like size.

wt....

May 14, 2008 09:41 PM

It's natural. Drop low-margin products and concentrate on newer, higher-margin products.

Quality of Chinese/Korean made products are rising for these low-margin home appliances. If they can make it cheaper (and better, perhaps in a few years), it makes perfect sense for them to drop the market, since GE isn't (or doesn't want to be) a mass-producer of low-magin products that any other company can produce.

It doesn't wants to be in a market with a lot of lowly competition. It wants to, and it will continue to go into/create markets where it's the sole company that can fulfill the demand.

Peter Piotr

May 14, 2008 09:45 PM

It is a big mistake on GE side. Instead of dumping the appliance unit they should have taken it to the next level...
by creating THE BOX for example. Everyone wants to have one. Even in China. Plus I guess they are already big in nanotechnology an IP.
peter


Diane

May 14, 2008 10:02 PM

One thing I mention in the blog that's worth stressing is that GE has other options for off-loading this business. A spin-off or partnership might allow the business to continue leveraging the GE brand name. That clearly has a value that both the company and any potential investor wouldn't want to lose.

Said Edwards

May 14, 2008 10:33 PM

Well, with selling off part of the company go, of course, jobs, and we, Americans, stay here commenting on their so called "smart" but still greedy strategies. Companies which have over time made billions in profits because of our loyalties, we the consumers, usually adopt an attitude of "no care" towards us, employees and others, who have contributed so much to make them what they are today. Companies which do truly care ought to keep their still functional units in operation although they are not raking in billions. This will give the opportunity to their employees to maintain their livelihoods and at the same time make America a greater country. I still remember when Craig Barrett of Intel once said while I was contracted with one of his contractors and that is the average computer CPU cost his company less than what a McDonald's whopper costs, $.99 (ninety cents). Nevertheless, computer companies keep charging us thousands of dollars for their products. Greed is what is going to drive all of us out of business. Go figure!!

Erik

May 14, 2008 11:03 PM

A spin-off would have been the more natural selection if GE was interested in preserving its heritage. With a sale, it is unlikely that GE would license its name to HAIER, LG, or any of the other companies named as potential buyers.

Knight

May 14, 2008 11:35 PM

Immelt is shooting in the dark. Sale of Plastics was supposed to lift the stock - it didn't move at all. Appliance sale will go unnoticed by Wall-Street, but will eliminate the only face to consumers that GE has. Most people have no clue that GE build power plants, medical devices, aircraft engines - but they do know the quality and reliability of GE Appliances for almost 100 years now. And by the way, GE Consumer & Industrial Division still MAKES MONEY and provides a lot of cash, with very little help from GE Corporate. And it will have a devistating impact on Louisville, KY 5,000 employees - it's the 3rd largest employer here......

Nodir Ruzmatov

May 14, 2008 11:40 PM

GE means quality for me! I know that GE products has highest quality ever!
What is gonna happen if they sell some portion of their business to someone else!? What i think that GE's stock price will drop! [dramatically] and they will say to stock holders: Ohh well we have 8 billion dollar now, we are going to invest in something new and what will generate us profit in a long run.

T. Gregory

May 14, 2008 11:47 PM

Ms. Brady -

Somewhat overlooked here is strategic national interest: in the run-up to U.S. involvement in WWII, GE and other manufacturers were able to retool production lines and to crank out airplanes, tanks, transport vehicles, landing craft, etc., post-haste. In point of fact, this ability to react effectively has quite a bit to do with why England is still in existence, and with why the National Socialists are no longer the ruling party in Germany.

The demands GE faces today are not recently placed by our shiny-new "global economy." In a speech to the Empire Club in 1955, Ralph Cordiner, then-President of GE, spoke of challenges placed on GE manufacturing organs; of balancing the needs of all interested parties, not just shareholders; and of automation and mobility as methods of meeting those challenges (1).

The main difference, then and now, is this: GE used to care about being a balanced, responsible corporate citizen of the United States; now, not so much. The brand doesn't stand for half of what it used to, and may not ever again. Mr. Immelt apparently has a different view of his responsibilities than did Mr. Cordiner.

Ironic, that in the article above, the analyst Mr. Ragan debates the value of a brand image that originally Mr. & Mrs. Reagan helped build as spokesmen. Life really does come full-circle.

- T. Gregory,
Suwanee, Georgia

(1)http://www.empireclubfoundation.com/details.asp?SpeechID=98&FT=yes

Carl

May 15, 2008 12:39 AM

I have been a GE employee for 25 years with GE Appliances in Louisville, KY. Thank you to those for putting in the human element. Looking for a job in todays times is going to be nasty.
There was a promise of technical and service related jobs replacing our uncompetitive manufacturing jobs. But these jobs have also gone overseas. Not only are the jobs of GE employees being lost but also the large amount of transportation and products that support such a large infrastructure. Tell me what appliances do an Indonesian or Mexican factory worker buy. How will they stimulate our economy? Oh yea, I forgot, the GE stockholders will profit. I have always wanted GE to take market share, but they cut research and development and replaced it with marketing. The brilliance and talent that invented the push button finds it difficult to push paper.
It was once said that it was the high cost of labor that made it impossible for American auto manufacturers to compete with oversea auto makers. Yet Japanese and European manufacture their cars here with American labor. The big difference is with American management. They decide to stop R&D in lieu of a few dollars of profit. Now they wonder why their product has fallen behind.
One day someone is going to treat their employees with respect and the employees are going to offer loyalty and ingenuity. That company will flourish and everyone will wonder why they hadn't tried it before.

kashel

May 15, 2008 12:53 AM

I don't know how good GE's appliances once were, but they've been junk for the last 15 years or more. Nobody I know who bought a GE appliance (including me) would ever buy another one. I hope a European company buys this unit and restores the product quality it supposedly once had. Unlike U.S. companies, European companies still place a higher value on quality than on quarterly and annual numbers -- or on rock-star CEOs with obscene compensation packages.

L A Ogren

May 15, 2008 01:19 AM

Interesting approach (not unique to GE) -- milk the cash cow dry, then convince the marketplace it's worth billions. I might have been excited if they had a super-insulated refrigerator in a highly efficient configuration with a direct current option, to complement the new image they've tried to cultivate.

Rob Corder

May 15, 2008 01:58 AM

Toyota is building a truck plant in Texas. Honda has numerous plants in the U.S.. Haier has recently expanded its APPLIANCE plant in Camden, South Carolina, even though its president said labor costs are about 10 times less in China. Michelin has plants in the U.S.. All of the above clashes with nearly all of the posters to this blog. What's going on here? Why are foreign companies now building in the U.S.? Even Haier? Hello? Maybe the Louisville, Kentucky GE plant won't go overseas after all. If Haier can keep the GE name and bring the quality up to one of the top three in Consumer Reports ratings, they will really have something and embarass GE, which currently ranks in the middle or lower in those ratings.

Ben Seo

May 15, 2008 04:49 AM

I guess it all depends on whose perspective you are looking at this issue of dropping the appliances bit for GE - investors vs everyday consumers. All in all, you've got to dump the things that are not really helping you in terms of cash coming in your pocket in the world of business...

dave logan

May 15, 2008 06:59 AM

No doubt some foreigners will buy it. Does anybody in this country still have a "real" job - bulding nondefense durable products for an American owned company and sell the bulk of it to non US govt customers? I don't know of anyone who does.

Bruce Temkin

May 15, 2008 07:56 AM

As a past GE employee who worked on consulting projects for GE Appliances, I am a bit saddened. But from a business standpoint this move makes great sense; get rid of a business in which you can't develop a strong differentiation.
I don't buy that appliances "has to be" a commodity business, but it certainly is one right now. Since (in my opinion) the most likely path out of commoditization will come from breakthroughs in industrial design and online integration/home networking, areas that aren't necessarily the sweet spot for GE, this move makes even more sense.
While there's no chance that Apple would (or should) ever buy GE Appliances, a key question for me is "What would Steve Jobs do if he was running an appliances business?"

Take a look at my blog "Customer Experience Matters"
http://experiencematters.wordpress.com/

ps

May 15, 2008 08:26 AM

Too bad. But then again, how much of GE's appliance business involves US manufacturing? The US business environment and naked capitalism at all costs is embodied by this conglomerate starting with the former CEO and moral compass Neutron Jack.

Russell

May 15, 2008 08:44 AM

GE appliances have failed largely because of their poor quality and very poor warranty programs. I have always bought GE but I went through Ground hog day over and over trying to get GE to realize that their warranty guy was not coming out. 10 aeparate appointments 3 months without a washing machine. I could not get anyone at GE to take me out of the computerized process. Thank you LOWE's for taking back that piece of crap. And here's a big horse laugh at you GE corporate for ignoring your service level customers!!

citracyde

May 15, 2008 09:38 AM

T. Gregory has a great point. During WWII my hometown's local GE manufacturing facility switched from constructing locomotives to constructing tanks and other heavy industrial military parts. Without the infrastructure here in the country would we be forced to secede Mexico? What other options might we have a service-based economy in a time of war. America has a historical habit of being slow to recognizing threats so its doubtful that there would be the industrial build-up necessary to defend the homefront.

Bill Rothschild

May 15, 2008 09:59 AM

I have been recommending the sale of Major Appliances since March 2000…these are two quotes from my Chief Executive artilces. The key issue facing GE is the continuing sale of its “highly valuable” Monogram… Jack Welch set the precedent when he sold the monogram to Thomson… selling it to the Chinese, Koreans or Indians may have major negative impacts since their reputation for quality is not consistent.

• Chief Executive Magazine- March 2000 “Succeeding a legend”
“There may be, however, some pruning required with Major Appliances as a disposition candidate.”

• Chief Executive Magazine- June 2007 “Decision Time for Immelt and Buffet”
‘I think that broadcasting and even additional parts of the traditional GE lines, like major appliances and lighting, could be divested.”

Immelt continues to have problems meeting his “high expectations”. It is clear that the complexity of the portfolio and is GO BIG promises are not realistic and need changes. However, if he continues to divest the consumer, financial services and broadcasting assets, he will be come a long cycle business and will completely lose his ability to manage earnings.

Bill Rothschild, author of "The Secret to GE's Success."

Joe

May 15, 2008 10:02 AM

I disagree that all appliances are a commodity business. It's true that for some low end appliances that come in an apartment it is a commodity, however most home customers choose appliances on style and features. The guts of most appliances are the same, the only difference is the styling and features. This is the exact opposite of a commodity.
I agree with spinning it off it it drags down you PE ratio. It seems like another company can appropriate more value fromm the business.

tiddle

May 15, 2008 11:08 AM

If it's becoming a commodity business, who would want to step in and buy it from GE, particularly when the housing crisis is dragging it down?

With the easy money from credit market pretty much dried up (hence goes the fried-fish-on-the-beach private equity), my guess is, it'll go the way the IBM PC business has gone; and the Chinese (having cash of their own and don't rake up much debt) is going to buy it from GE, then churn out the commodity-like appliances and lightbulbs like Haiya has done. The Chinese would negotiate to still use the GE name, with similar deal like Lenovo has negotiated with IBM to use the IBM name for a few more years.

jb

May 15, 2008 12:18 PM

A sell of the appliance division will most likely lead to the breakup of American jobs across the country. If that many more Americans lose good paying jobs, do you really think the overall economy will improve? Why do you think we are in this mess? All our genious investors are pushing for more and more returns so they offshore everything and take $30 an hour employees and terminate them. The only jobs out there pay $12 an hour, what do you expect people to buy with that? I find it funny in one sense, these investors got very greedy and now they can't make money in the economy they created. Best wishes to GE employees in Appliances

Ex Capital

May 15, 2008 02:26 PM

How does GE sell Plastics for $12B, Appliances for $8B, Consumer credit cards for additional billions and manage to drive down the co's market cap and reduce the stock to 4 yr lows? Buybacks and dividends are not long term growth strategies and clearly haven't helped the share price. With slipping int'l revenues in a weak dollar world, headwinds to int'l revenues will only increase as the dollar strengthens. The stock has declined more than 25% since October, it's consistently underperformed the Dow, and it's been devoid of a pulse since Immelt took over. It's time to recognize that the conglomerate model isn't working. GE's counter cyclical businesses ensure anemic stock growth. The only way for investors to trade and profit from GE's growth businesses is to break the company into 3 or 4 publicly traded entities. If it takes a new CEO to make this happen, so be it. It's been almost 7 yrs with no indication of improvement in share performance.

Knight

May 15, 2008 02:39 PM

70% of GE Appliance sales come from products made in China & Mexico. The only things made in US are - electric ranges, dishwashers, low end washers and refregirators. And across many categories, GE Appliances have the same or higher quality than competitors (ranges, microwaves, washers). Everybody overlooks the fact that GE Consumer & Industrial Division (industrial, lighting, appliances) still makes money. And it generates plenty of cash. Immelt doesn't have to spend an hour a week on this business. Just let it be. By selling it, he will give up a history, tradition and pride of GE. And it will NOT satisfy the hungry shareholders. As I said, sale of Plastics did nothing. He can sell GE Healhtcare as well - nothing will help him. He needs to focus on growing existing businesses. GE Appliance business is growing in Europe and with the right focus can be succesfull in Asia. He gives up a golden goose to save his job short-term. 7 years on the job and the stock is 50% below where it was in 2000.......

Diane

May 15, 2008 02:39 PM

"Ex Capital" raises a point that often comes up in my reporting on GE (though, for some reason, it's less of an issue with United Technologies) -- the increasing allergy to a "balanced conglomerate" model. GE isn't looking to be a barometer of the economy. It aims to outperform the market. But the mix of businesses and the sheer bulk of the company give it the appearance, at least, of being something that's tantamount to a mutual fund. Immelt has made a lot of smart bets with his investments in health care, infrastructure and alternative energy. But the big picture is so eclectic that the general public isn't quite sure what it's getting with a GE share.

And, Knight, you're right on the point about where this stuff is manufactured (esp. Mexico) ... but the real issue is where it's sold. Go to Europe and try to see how many consumers are clamoring for a GE oven. Not many. A global company can't afford to be weighed down with such a persistently domestic business -- especially at this stage in the economic cycle.

Knight

May 15, 2008 02:44 PM

Every company exist for a purpose. And the purpose is not only to make money. Thomas Edison founded GE as an Industrial and later appliance company. It's the foundation of GE, this is what it's known for. I agree, GE should divest some businesses and focus on its core competency! Divest
1) NBC-Universal
2) GE Money and all financial businesses
Focus on technology and engineering. There are plenty of opportunities with CFL lighting, energy efficient appliances, Industrial products. Keep all businesses that have to do with technology - Consumer & Industrial, Energy, Aviation, Healthcare products
Immelt is going wrong way!

In Colorado

May 15, 2008 02:59 PM

Some people here are saying that GE stands for quality in appliances. My experience has been the opposite. Ever GE applicance that came with our house when we purchased new has been a dissappointment. I also agree with Jb: coprorate America is firing its customers, and wonders why its so hard to sell.

Ex Capital

May 15, 2008 04:16 PM

UTX is considerably smaller in terms of both market cap and portfolio breadth. GE's market cap is almost 450% larger than UTX's or roughly $250B greater. At a $72B mkt cap, though diverse, UTX is nimble enough to capitalize on its targeted portfolio investments. This has allowed it to increase its share price consistently and significantly during Immelt's tenure. A 5 year UTX vs. GE chart speaks for itself. GE must break up into more manageable pieces and segment it's portfolio to allow investors to invest in the businesses they want and unlock trapped value. Organizationally, this would reengergize many stagnant GE businesses and boost employee morale in those businesses with stand alone growth potential.

Diane

May 15, 2008 04:36 PM

UTX also considerably outperformed GE when Welch was at the helm, too. It will be interesting to see what happens now that George David is stepping down. Here's a piece I wrote on the company:

http://www.businessweek.com/magazine/content/04_43/b3905001_mz001.htm

Karen

May 15, 2008 04:41 PM

I'm an investor and Jeff I'm glad you are doing it. If it's not making the money and it tied to our dollar...its the way to go.

Jessie

May 15, 2008 04:45 PM

I just don't get why GE feels they must SELL the business. Wouldn't it make more sense to spin it off? This would unlock value for GE shareholders, and the "new" GE appliance company shareholders. Couldn't they make just as much money doing it this way? (I'm definately not an expert) Whether or not GE's appliances are considered "quality" now, could be changed when the company is no longer under GE's thumb, and massive shareholder value could be unlocked. The company has one of the most recognizable and identifiable brands in the world... why would they want to give that up?

Labrador

May 15, 2008 05:07 PM

The housing crash will remain for a couple of years no matter what, it´s obvious the appliances business will follow a similar tendency.

Will it succeed without the GE brand name?

Howard

May 15, 2008 05:09 PM

GE is associated with "high quality" ? Come' on people! Have you even tried a slow cooker made by GE ? Mine broke down in 3 months. What a joke!

June

May 15, 2008 07:41 PM

Notwithstanding all the emotion attached to this decision, my hats off to GE's CEO for taking this bold decision. The quality of GE Appliances is no longer what it used to be historically. Customer support had become pathetic. Why continue with a business unit that had poor quality of products, obnoxious customer support, and above all relatively low margins? GE is better off sheding lines of business which do not cut it.

Congratulations for making the decision before it is too late.

Knight

May 15, 2008 07:56 PM

GE Appliances has received best GE Corporate performance award 2 years in a row! From 2004-3Q2007 - it beat its Corporate quarterly targets! Jim Campbell is a tremenous leader and is admired by his troops. Dear shareholders - it's not loosing money, as you're led to beileve! Operationally, it has performed better (compared to corporate targets) than other businesses. As far as quality - all large appliances have quality comparable or better than any other company, even Consumer Reports data supports it. Slow cookers, phone and can openers with GE meatball have nothing to do with GE - they are sold under licence from GE and you see what it has done to their quality? If appliances are sold under licence - they will go the way of cookers and can openers

ps

May 15, 2008 08:43 PM

What will Neutron Jack and his new child bride have to say? And how about his disgarded spouse who stuck by him until the interview sessions. I guess GE needs the money to fuel his stud lifestyle.

MURRAY

May 15, 2008 11:01 PM

We have been talking about the overpaid american CEO at work for a couple of weeks. They know how to count beans, but not what makes a good product (hence research cuts and outsourcing design to countries were they never have using these products growing up). MBA mania... can't succeed in your first career, get an MBA, and a jump in pay for highly trained idiots. They don't know people, product or design. Bean counting, marketing and lawyers don't make a company great.

Pay them a max of 40 times a average worker and make them live in the country were most of the work gets done. Why should workers wages be the same as 20 years ago and the CEO make a 100 times more. The CEO has not gotten better. No american middle class will mean no american consumer market. To bad the CEO want to make this country 3rd world.

Barsse

May 16, 2008 10:03 AM

My Dear americans, please wake up all companies in the world are driven for people who only cares about money, not for the people like you and me, for these guys we are only cattle, now china is taking the whole manufacturing industry, may be africa tomorrow.
Im wondering who transfer the technoloy to them it were not you?

Elwood

May 16, 2008 02:45 PM

How many TV’s do we make? The writing is on the wall . . .. I keep seeing comments about sending away jobs, about greed, etc. I work in the appliance industry, and the simple fact is products are being imported that beat us on price, or beat us on quality, or both. We will respond with more regulation and more taxation that will further cripple the ability of these American companies to survive in a competitive global market . . .and yet you will continue to delude yourself with fantasies of greed. You are right, this nation is committing suicide, but it isn’t GE that is pulling the trigger.

rj

May 16, 2008 04:45 PM

I bought a NEW ge x44 range about 8 years ago. lucky I was able to give it away in 06,a after about $1200 FOR REPAIRS. The salesman said "ge appliances were from louisville".?? Strange how I later found a lable stating "made in mexico". There are too many problems to mention here but I will describe one. Whenever cooking a well prepared meal the oven would shut off, the clock would beep and flash the "F" code.. It didn't take me too long to realize that the code was from ge saying "fuck you",we got your money. ge appliances are crap and now your business is where it should be,,,,,,, in that "F"code toilet!

Michael

May 16, 2008 05:31 PM

Unfortunately, the greed is not in the manufacturer as much as it is the government. With high taxes on corporations, any company that buys GE would be better off to take the manufacturing out of America. Corporations have to look at the short term P/E and need to see how much it costs to do business. You shouldn't have to loose money to stay in business or keep employees because of past profitability and current tax.

This is going to keep happening as long as we tax corporations in this country out the yin yang. No telling who is next..... soon we will be a country of just consumers and no manufacturers.

Change the TAX code.

Regulation just adds more layers to the bull.... Look at Ireland that just lowered the corporate tax to next to nothing and the country is booming with manufacturers wanting to come.

If you want to complain about jobs leaving, elect with brains and not heart....

Appliance.wizard

May 16, 2008 10:18 PM

I was once a Westinghouse employee, that then became a Maytag employee and now I am a GE employee. I cant take it no more. This country is going to crap. We dont make anything here anymore. It is ashame. Other countries are getting rich from things we started. The poor blue collar worker such as myself cant survive anymore. I feel like moving to one of these other countries and prevailing. I was born and raised in the used to be great USA. We just seem to be heading in the wrong direction. Everything from housing, fuel manufaturing, jobs are all going south, the only people getting ahead in life are the people making the big decisions of ruining peoples lives. I feel real bad for our kids who have to try and survive in this world. I would hope the people of the world would get together as a group and stop things like this from happening. But it will never happem GE is a great company to work for, just like Maytag was nad Westinghouse. But soon all manufaturing jobs will go away and the only people living in the USA will be the real poor and the extremely rich. The middle calss will be gone.

Deniz

May 17, 2008 08:27 AM

The American worker is becoming more competitive with the lower U.S. dollar, which is why many Japanese companies prefer it here. These companies know that good engineers are expensive in Japan as well, and that China does not have the market know-how to design cars yet, thus considering the Dollar is worth less and less, and it gets cheaper to pay Americans, they set up plants here.

David

May 17, 2008 09:45 PM

This whole thing stinks. The Walmartization of America means Amercians won't pay for an American brand at the pricepoint needed to make it profitable. Then the wonderful unions that have GE pay 80K a year to generally undereducated assembly lines works is no good for the GE's bottomline either. The whole thing stinks.
The honest people (like my partner who has been working at GE as white collar for 30yrs and now faces a retirement selloff) that "did their time" loss out. The American economy losses out...just so the cheap US consumer can buy a fridge at the same price as the Korean unit next to it on the showroom floor. I am sad.

Ben Thayer

May 18, 2008 09:08 PM

Now that GE put its good appliance name on the auction block, compromises are certain to follow. Which foreign appliance company has 6 sigma as an integral part of their corporate culture like GEA? Watch for a nose-dive in quality with any deals GE might strike. What value will GE have on appliances then?

I wonder if GE stockholders have caught on that a company the size of Whirlpool was able to beat the great GE. Even Whirlpool managed to be a global appliance corporation. Whirlpoos even moved one plant from Mexico back to the US. Seems like GE has lost its ability turn such a low tech, mature product into a global business. Hopefully they will not fail the other higher tech groups.

Which GE group will fail to provide significant returns next? NBC after the Olympic games are over? GE aircraft engines when airlines can't afford new aircraft or engines? Medical systems when US heathcare becomes a national system? Look for GE to find another scapegoat in the future.

GE should take a hard look at how they manage their businesses rather than auctioning them off during a downturn. GE stockholders should expect more from such a company.

Paul

May 19, 2008 09:58 AM

I just purchased a GE stove... it is junk for $1500.00 . They will not replace my defective stove and cannot repair it... they sold out long ago.

Juan Serrano

May 19, 2008 11:00 AM

Last year Plastics, This year Aplpiances...what is next?

Doug

May 21, 2008 06:44 PM

GE Appliances have not been manufactured in the US for a very long time. Mexico and Korea are where they are mostly made. Quality failed long ago. Buy a 900 dollar GE dishwasher, and also a Bosch for the same price. See which one works better. GE's only shot at innovation was the Advantium and Trivection oven. Neither caught on. And the SmartDispense isn't beneficial enough to pull a loud ineffective machine up on par with other brands with with superior performance.

Diane

May 21, 2008 09:40 PM

The company does manufacture appliances at GE Appliance Park in Louisville. In fact, GE actually added some production line workers there in recent years -- thanks to its Competitive Wage Agreement (guess what that means). But you're right that the bulk of manufacturing is done elsewhere.

Mongo

May 23, 2008 03:19 PM

Don't forget about the Roper Corp. plant in LaFayette Georgia. We produce a lot of high end ranges for GE, such as wall ovens,trivection ranges, and many more. If this sale means our product goes over seas, it could shut down an entire town!

Richard

May 26, 2008 04:30 PM

I work at G.E. appliance park in Louisville ky and i;ve had a sick feeling in my stomach since i heard the news. Alot of HARD working families depend on G.E. staying in louisville ky. If Jeff Immelt wouldnt get such a big azz bonus (9.1 million) than maybe G.E wouldnt be lossing so much money. Plus G.E. acts like it hurts them to give the employees a decent wage and raises.

DB

June 5, 2008 04:07 PM

Juan (May 19). What's next is Lighting. Immelt created the "Industrial Segment" as a thinly disguised collection point for businesses that he wants to sell. It included Silicones (sold in '06) Plastics ('07), Appliances and Lighting along with some smaller ones.

Sheila

June 9, 2008 07:22 PM

The average line worker is not undereducated and makes 80K. What people fail to realize many of the remaining 2000 hourly workers at Louisville, (25,000 at the peak of Appliance Park),have not always had good benefits and living wages.I am always amazed that people get in an uproar about someone who works in a dirty factory that is not air-conditioned making a living wage but feel that they deserve what they get paid.Only a few get upset over multi-million dollar CEO pay. There is a mentality if you do not have a masters degree,you are not an asset. Many of these blue collar factory jobs have afforded their children to attend college, a priviledge not available to all. In Louisville alone, there are over 3000 salary jobs.Now explain the cost of labor to me.

tom

June 15, 2008 06:24 PM

I have been an appliance employee for 30 years now they are dumping us thinking this will help the stock. That is a joke. What stocks are doing well? Except oil and Google. I will never buy anything Ge again. I have given most of my life to this company now they are feeding us to the dogs and giving us zip in return. What are American works going to do. We don’t produce nothing and when the companies stock goes down dump the employee that will fix it. I worry about are children there is no loyalty anymore.

Ms Bagel

June 26, 2008 05:11 PM

As a current member of GE appliances management, I feel disgusted and used. After our "poor" 1st Quarter performance, we (managers) were given directives to cut costs and lower headcout. We worked our tails off making changes to our structure, making these terribly sad announcements to our staff members and then they finish by saing "Leaders, make sure you are supporting your team members - this is difficult for them. Give them a shulder to lean on. We need to be compassionate." The powers that be led us to believe these changes would help us be more profitable. I work my a$$ off for 3 months cutting jobs, cutting costs and playing counselor to 35 employees . . . then they say "Hey thanks for all your hard work, you're now being sold to the highest bidder". Talk about compassion - we heard the news from the damn media! This sell off is about the RICH getting RICHER. On a side note: GE appliances is in the red because we buy 8,000 bagels per day for morning team meetings. If I had a penny for every slice of pizza or donut I've been served I'd be retired by now.

Owen Linzmayer

August 8, 2008 10:41 AM

I'm a construction project manager and I just took delivery of appliances to outfit four apartments. We got fridges, stoves, microwaves, and dishwashers all from GE. Of these products, only the microwave ovens arrived in good shape. The others had dents and scratches right out of the boxes. Having personally unboxed and helped move the units, I know that they weren't damaged in shipping or installation.

On top of this appalling lack of quality, some idiot at GE decided that to protect the finish on their appliances a thin plastic film should be wrapped around the exterior. Good idea, but this film extends underneath the seals on the doors, making it impossible to cleanly remove. Top it off with stickers adhered to the glass of the ovens that can't be removed without resorting to solvents, and you wonder if anyone at the company has ever actually eaten their own dog food.

When contacted to correct the problems, GE sent a team of three repair men to do the job that one guy could have handled. Oh, and a replacement for a damaged backsplash also arrived damaged with part of the paint chipped off. Way to go guys!

I don't know if these products will perform well over the long term, but my initial impression leaves me certain that I'll never buy another GE appliance.

Demetrick

September 10, 2008 08:50 PM

I work for GE and its the best job I ever had.

Ms. Bagel WHAT?

October 9, 2008 04:50 PM

I work also at GE and Work my A## off everyday. I have never received a Bagel, Donut, or slice of Pizza. I am offended by Ms Bagel's comments. I don't care if you break it to me lightly or if you offer me your shoulder to cry on. I just want to have a job with GE tomorrow. It is management that has ruined GE. They pay 4 or 5 people 70,000 dollars a year to manage adults. Adults who know how to do the job and can accomplish the GE mission if you had individuals who gave a s**t to fix and maintain the lines. Ms. Bagel When management makes at least 3x what the average employee makes I can't feel sorry for you. Try digging a ditch, or doing real hard labor, then and only then will I feel sorry for you. Demetrick I agree.

leondowns

October 14, 2008 10:31 AM

i remember when the lazy oafs at appliance park in the 1960s would call a strike at a ge building to go boating at rough river and have a picnic for the fun of it now the honest employees that are left are paying for it the creeps that caused this are retired and drawing their pensions leaving todays workers to suffer uoy few employees left have my sympathy

Safety1st

October 16, 2008 08:27 PM

My GE Appliance Park memories since my first trip there in 1972 to deliver freight have been an unforgettable memory. The bragging about how little they worked out of an 8 hour shift. I remember at one time how proud they were that 1% of the employees were punched in and being paid and weren't even in the plant working. That stopped when an employee was killed by a train and it was exposed he had been punched in by another employee. How do I best describe the GE Appliance Park employees I've meet in 30+ years? "SELF-SERVING"

joe downs

October 16, 2008 08:32 PM

i as a union truck driver in the 50s and 60s worked and sweated for my pay but when i went to ge to make a delivery a large portion of ge employees were lazy not to mention the large amount of employees who were married and had boy friends and girl friends on the job all good things must come to an end even a great employer god bless ge for trying to be fair

leon downs

October 22, 2008 08:33 PM

if i were the person that did the hiring i would use a fine tooth comb to check to see if i could detect a louse hire the honest hard workers and have the lice escorted off of company property union or not we should all work together as humans and honest americansi retired as a teamster truck driver went to ge almost every day all my household appliances are ge or hotpoint buti beleive the writing is on the wall respectfully old retired teamster

George Lewis

November 20, 2008 01:35 PM

I think GE has been silently backing the ELECTRIC CAR company TH!NK and is looking to change it's image from household products to ENVIRONMENTAL SOLUTIONS - since the TH!NK EV is 95% recyclable!

They have invested heavily in TH!NK and I think it's going to surprise many people what this electric car (which is already being sold in Europe AND has just started plans to sell in NORTH AMERICA with RockPort Capital Partners and Kleiner Perkins, Caufield and Byers! For more information about this and other interesting topics please visit my new online magazine: www.HiddenBuzz.com

SteveA

January 20, 2009 06:04 PM

GE Fanuc and Industrial divisions are now chopping heads too and cutting their industrial divisions into little bitty pieces. Were going to run lean and mean IMMELT says by Getting rid of the long term higher paid salaried knowledgeable employees so he can keep his 17.5Mil a year before bonuses and keep the dividend high enough. F' the employees if the don't like it they can go somewhere else. ? is WHERE ? How about a 4 day work week as an option to weather out the storm. NOPE Best luck to all!!!

RuttedPasture

March 2, 2009 01:25 AM

Theres no men left in corporate American to build anything. The people running companies are sychophants to numbers. Having any loyalty, sympathy, or care for your workers is seen as a weakness at the top.
These numbers men couldnt build a bookshelf to expect them to be able to rebuild a struggling division. Thats simply a hilarious joke.
Much easier for the weak to cut.

lawrence

April 14, 2009 11:08 PM

Being an appliance service tech for 30 years and loved the old ge clam timers and duel heating elements were the best appliances ever except the old whirpool. I wonder what happen to trying to make things good? The exec have only wanted profits at the country and the consumers expence and still they lost and they would'nt even give me a chance to do warranty service because of some legal problems that were long ago and they still held them against me and look at the big exec.

leon downs

August 16, 2009 07:32 AM

hit the road ge give me china any time

Mildred Parmigiano

October 5, 2009 04:11 PM

GE appliances came with the purchase of our new home in 2004.We had so much trouble with our refrigerator and dishwasher it still is a total disaster.
I have had appliances for over 20 years and never had as much trouble. your products are the worst.your customer service staff is no help at all. In my opinion, you should go out of business.I have a contract with you and you still cannot supply me with the correct water dispensor. your service man put a Hot Point dispensor on our refrigerator which does not match and does not belong on the refrigerator.If you cannot supply me with the correct dispensor, I feel you should remit some of the cost of the extended warranty. People in our development have received new refrigerators under the lemon law. You should be ashamed to put out such a product. Look at how many times a repair man has been to our home. A disgrace!

Steve Forte

November 18, 2009 10:25 PM

I worked for an aircraft engine company in Dallas, TX for 37 yrs when GE came along, bought us and shut us down. I will NOT buy anything that GE has anything to do with. Fuck them.

Burl Finkelstein

November 23, 2009 02:26 PM

GE is making a mistake. Writing off the mass market is the wrong thing to do. Why can suppliers from other countries make profits by supplying the US consummer market? They look for a future of their business. US multinational corporations only look to the quaters profit. If they can't make enough profit then sell a piece of the company.
US government is largely to blam by it's disfuctional trade policy that allows foreign makers to benifit from the US plum consummer market while we are restricted from their markets.

Now Jeff Immelt is saying that the US needs to manufacure. The cow is already out of the barn, no one knows how to make things after two generations

Sullpat

December 6, 2009 12:41 PM

I have had bad experiences with GE appliances. GE execs take notice. You need to build quality products first!

mathew

January 21, 2010 05:55 AM

Very nice.......I'm sure it will help many people.....

job without office

Spektor

February 28, 2010 10:45 AM

Kill off the entire US appliance industry, just like we abandoned electronics and oh, pretty much everything else. Great idea GE! Put thousands of more Americans out of work and let the damned Asians take over this segment of our economy too. What a foolish decision. I will buy American-made GE appliances. I will NOT buy those made in foreign plants. I'd go to Whirlpool first. And no amount of retarded GE commercials touting their MRI machines or jet engines will make me feel any better about GE. News to GE -- I can't wash my dishes in an MRI machine! Appliances may not be high profit, but having your logo in someone's kitchen 24/7, and their affect manintaining your company's reputation with the American people is worth its weight in gold. Cede the field to Whirlpool and the Asians at your peril.

Spektor

February 28, 2010 10:46 AM

Kill off the entire US appliance industry, just like we abandoned electronics and oh, pretty much everything else. Great idea GE! Put thousands of more Americans out of work and let the damned Asians take over this segment of our economy too. What a foolish decision. I will buy American-made GE appliances. I will NOT buy those made in foreign plants. I'd go to Whirlpool first. And no amount of stupid GE commercials touting their MRI machines or jet engines will make me feel any better about GE. News to GE -- I can't wash my dishes in an MRI machine! Appliances may not be high profit, but having your logo in someone's kitchen 24/7, and their affect manintaining your company's reputation with the American people is worth its weight in gold. Cede the field to Whirlpool and the Asians at your peril.

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How can you manage smarter? BusinessWeek writers Nanette Byrnes, Patricia O’Connell, Emily Thornton, Matthew Boyle, Michelle Conlin and Diane Brady synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

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