After weeks of rumors and speculation, General Electric has confirmed discussions to sell its appliance division. That’s a big concern for LaFayette and the surrounding area since GE Appliances & Lighting owns Walker County’s largest employer, Roper Corp.
Per Businessweek and various other news outlets, GE is seeking to unload the consumer appliance business for $2 to $3 billion, and the most interested potential buyer is Swedish appliance giant Electrolux.
- “‘GE is evaluating a wide range of strategic options for our appliances business including discussions with Electrolux and other interested parties,’ Seth Martin, a GE spokesman, said today. He declined to name other bidders. Electrolux confirmed its interest in a statement, saying there’s no guarantee a deal will be reached.”
General Electric is a massive conglomerate with various interests, including appliances, electrical generation, oil and gas, transportation equipment, medical devices, and light bulbs. Under the control of CEO Jeff Immelt, GE has focused on industrial and infrastructure businesses – core holdings where it can be most profitable. In the last few years GE has successfully sold a plastics factory, real estate, its risky finance unit, overseas banks, stakes in entertainment companies, and tried once before (unsuccessfully) to get out of the appliance business.
While GE Appliances & Lighting DOES make a profit, the division is being considered for sale due to having low margins and little potential for growth – especially compared to the rest of GE. Combining third-place GE Appliances with no. 2 Electrolux would give GE a cash infusion, and put Electrolux in a better competitive position against the biggest US appliance manufacturer: Michigan-based Whirlpool.
Roper employees in LaFayette received confirmation of sale talks last Thursday via an e-mail from Dr. Charles “Chip” Blankenship, CEO of GE Appliances & Lighting. Blankenship’s message admitted GE is considering an Electrolux deal in order to “increase our competitiveness.” The e-mail promised to quickly make GE employees and communities aware of any sellout or restructuring, but made no firm promises regarding job security once a deal is done.
- “…if an agreement is reached, and the sale progresses, the goal of both parties is to create a combined business that is better positioned to win with customers and consumers.”
That better position likely means lower costs through consolidation. Consolidation generally translates into job cuts or plant closures.