GE to auction appliance unit

[supersuds]

This just in from the Wall Street Journal online:

"General Electric plans to auction off its appliances business for as much as $8 billion, ending the company's long association with so-called "white goods," the Wall Street Journal reported.

GE has hired Goldman Sachs Group
to run an auction for the appliances, unit, which could fetch between $5 billion and $8 billion, sources told the Journal.

With appliance sales getting hit by the slowing U.S. economy and the housing bust, jettisoning the business could help GE reach its long-term goal of boosting profits by at least 10% annually, the Journal said.

A sale could also help appease critics who are calling for a more dramatic restructuring of the 120-year-old company, a chorus that grew noisier after GE's surprise first-quarter earnings disappointment and forecast reduction last month, the Journal said.

The appliance outfit consists of refrigerators, freezers, electric and gas ranges, dishwashers, clothes washers and dryers, microwave ovens and air conditioners, sold under brands including GE Profile and Hotpoint, according to the company's Web site.

GE entered the business in 1907 and boasts of milestones such as introducing the first room air-conditioner in 1930."

http://www.cnbc.com/id/24628941/site/14081545

 

[maytagbear]

It was bound to happen,

There have been rumours about GE dumping appliances for years, but I was hoping not this soon after Maypool/Whirltag.

Lawrence/Maytagbear

 

[frigilux]

And here comes the GEnmore line. If Whirlpool buys it, I'm going to scream.

Wait....we ARE sure there's a stake through WCI's heart, right?

 

[launderess]

Margins on major appliances simply aren't there anymore. Cheap imports from Asia and Mexico on one side, and on the other side European high end brands.

When the Amercian consumer can go into Walmart and pay $50 for an air conditioner, or $300 for a washing machine, and worst charge it on a credit card why bother?

 

[tuthill]

Does anyone know if Whirlpool has definite plans to buy it?? They would have such a HUGE monopoly then...

 

[redcarpetdrew]

Price, price, price...

Launderess is correct. The average American consumer is driven by price more than quality and/or longevity. Most will gladly purchase a $299 or cheaper washer knowing it will last only 4-7 years as oppposed to a more expensive model that may be built heavier and last twice as long or so. The rallying cry of "Buy American" doesn't do anything, either. One reason for the death of the Dependable Care Maytag washer is that it was built from heavier, longer lasting materials and consumers didn't want to pay the premium price for such a machine. That design was going to eventually go away anyway due to Gov't energy mandates, but still...

I don't think that the contractor market helped as much, either. Yes, it was sales for GE, but maybe not of the products they should have. Most consumer's first exposure to GE products is the BOL units a builder will throw into a house to satisfy the inspector for the certificate of occupancy. They use it for a while and when they get tired of the basic features or the lack of sound insulation that the higher end models have or even worse, it dies earlier than the homeowner thinks it should, the thought very well could be "I'll never buy a GE product again or American for that matter." Then, they go to the Foreign Mfg'd models that are smeared all over the magazines for the 'look', the price and the perceived quality.

Sorry for the rant, right or wrong as it is...

RCD

 

[launderess]

There is NO way the Feds will allow Whirlpool to get their mitts on GE's appliance division. Probably not WCI either as both already cover a large part of the American appliance market.

So who then? GE already has major connections in China, so there is one for a start. Of the Europeans, Miele is too high end to bother with GE, though it would give them a leg up on Bosch without having to spend vast sums on new plants etc.

 

[rpm]

That is the reason I got rid of my GE.dishwasher.
It was the bol,did a lousy job and really noisey.
It was so basic and crappy after a year I yanked it out, sent it to the Salvation Army and bought a Kenmore.
If I ever was to buy a house and it came with an appliance package from the builder, I would say keep it and give me a discount and I'll buy my own

 

[washabear]

Here's another article, which names "potential bidders."

Other articles I read state that GE is citing the housing slump and a decline in credit as reasons for trying to sell the appliance division. Mostly, though, it seems to be a move to appease disappointed shareholders because current profits are less than projected.

I've come to think that powerful shareholders and the corporate profit culture of today do more damage than not.

http://dealbook.blogs.nytimes.com/2008/05/14/ge-to-sell-its-appliances-unit/index.html?partner=rssnyt&emc=rss

 

[maytagbear]

Oh, wouldn't if be lovely if Bosch

bought GE Appliances?

I'd much rather GE go to Bosch than to Haier or LG!!!

It is so discouraging-heartbreaking the way the industrial base of the United States has dwindled in my lifetime.

Being somewhat (only somewhat) intelligent, I do not let price be my only consideration when I buy durable goods.

There's no way that SEC would let Whirlpool buy GE Appliances.

Lawrence/Maytagbear

 

[johnb300m]

NOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

Well, that's the end of American appliances. Just Whirlpool left?

I liked GE's stuff so much more than Whirlpool.
Their dishwashers were fantastic, and they still cleaned well in this modern era of crap appliances.

I sure hope Asia doesn't get the division! I'll wash my hands of this economy if Asia get's GE appliances.

 

[nmaineman36]

I kinda like what Launderess has suggested...Miele could buy GE..now that would be interesting. As far as Whirlpool is concerned I doubt they have $ 8 Billion laying around since they took over Maytag and it would never be approved. Then again I thought that way when they bought out Maytag. Maytag today doesnt mean what it used to mean and there is nothing unique about them since Whirlpool took over. All the same and eventually the dishwashers will be all Whirlpool clones.
Now the Miele angle has me intrigued..if they did buy GE they certainly would be looking at improving the quality of GE products and "uncheapen " them. I cannot for the life of me see paying over $1000 for a GE dishwasher when a Miele is better made and worth the $ 1000. And it will last. I think that this is one of those stay tuned kinda stories.

 

[supersuds]

Whirlpool is certainly out of the picture as a buyer. I don't know about Electrolux, but if I had to bet, I think it will be Haier. The flood of white goods coming out of Chinese factories will end up swamping our market one way or the other -- look at the GE Adora frontloader which is nothing but a rebadged Chinese machine, anyway.

An article from the Louisville Courier-Journal says in part:

"Louisville is home to the headquarters of GE's Consumer & Industrial business, which includes lighting as well as appliances. About 5,000 in all work at Appliance Park, with about half in white-collar jobs ranging from marketing to research and development to finance.

"The other 2,500 are union workers building dishwashers, washing machines and top-freezer refrigerators.

*****

"Word of a potential sale came as news to Louisville Mayor Jerry Abramson.

"Through a spokesman yesterday, Abramson said he and Greater Louisville Inc. officials have been talking to GE management over the last two weeks about rumored job losses at Appliance Park.

"Abramson said he spoke to Jim Campbell, CEO of GE's Louisville-based Consumer & Industrial division, and was told the company was looking at job reductions across the board, but hadn’t made a decision about jobs in Louisville.

“That conversation didn’t include the possible sale of the appliances division,” Abramson spokesman Chad Carlton said. “Certainly, we’ll be proactive in the event they want to go that route and make the case, to either GE or new owners, that Louisville is a great place to continue operations.”

To which I say, good luck with that, Louisville.

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20080514/BUSINESS/80514054&referrer=FRONTPAGECAROUSEL

 

[johnb300m]

Yeah, Louisville better get on the horn with Newton, IA.

 

[launderess]

General Electric Credit

Is a huge part of GE's business, and is taking a hit as people are having "credit" problems. Many people don't know just how many pies GE has fingers in, many of those pies are much larger than the appliance division.

Medical Equipment
Capital Finance
Consumer Credit
Jet Engines
Electrical parts, supplies and systems

Just to name a few...

"GE" We Bring Good Things To Life

L.

 

[launderess]

Sadly

What probably will happen is one of those venture capital or hedge funds will take GE appliances and either turn it around (or try) with an eye to sell it off later at a profit, or rape the brand for the sum of it's parts by whoring it off bit by bit.

L.

 

[stevet]

Please educate me!

Just how much of the domestic line branded as GE/Hotpoint is actually made here in the USA? Seems like everyone's ranges, refrigerators and washers look so much alike now. Isn't it amazing how you don't even see brand names on the cartons the machines come in? Just that little white tag on the side. Are they all made south of the border in one factory with different badges on them? What happened to putting the carton at the curb for all your neighbors to see that you have bought a well respected brand of appliance?

How many of you remember the pride if not snob value of putting a Maytag washer carton or Kitchenaid Dishwasher carton at the curb and wondering how envious your neighbors must be?

And it isn't exclusive to GE either I am sure.
If the American appliance manufacturers were to label the content of their units or the final assembly plant like the Automakers do, then we may find out that most,if not all, of the machine is made somewhere outside if the US or is made with the majority of its components made outside as well.

 

[dirtybuck]

"GE" We Bring Good Things To Life

Well, if this is true, why are they putting the appliance area in front of a firing squad?

 

[johnb300m]

What I know...

GE's dishwasher parts:

electronics: china
motor: germany
drain motor: italy/seen some from switzerland
full assembly: louisville

i assume everything else is US made in KY.