Who will buy GE’s appliance division?

GE Appliance Division For Sale

General Electric has confirmed that they are in talks with Electrolux and others for the sale of GE’s Appliance division. At 8.3 billion dollars in annual sales (includes appliances and lighting), the numbers are not trivial, yet the division is the smallest in GE’s portfolio. Moreover, the operating margin is paltry at less than 5%. So, we get why GE wants to sell.

But, let’s look at the consequences of a sale of GE Appliances to Electrolux. The broad market of U.S. major appliances is led by Whirlpool, Electrolux (Frigidaire), and GE in that order. Moving from 3 major players to 2 would surely reduce competition, and at least raise an antitrust eyebrow in the Justice Department.

In terms of production capabilities, GE brings a lot to the party with new factories and a rejuvenated Appliance Park in Louisville. A combined Electrolux/GE will need manufacturing capacity, and GE’s one billion dollar investment should make Appliance Park competitive.

Nevertheless, Electrolux has shown a willingness to shutter U.S. factories and move production to Juarez, Mexico. There are sure to be redundancies, and analysts have already noted that both companies have recently invested in range facilities in Tennessee and Georgia. In addition to the surplus manufacturing capacity, there would of course be management and administrative redundancies.

It will be interesting to see how this plays out. Though I’ve got no dog in this fight, I feel it would be a shame for those manufacturing jobs that have returned to the U.S. to be lost due to further consolidation in the appliance industry. What’s your take on this?

 

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5 Responses to Who will buy GE’s appliance division?

  1. Maria says:

    I agree – I have nothing against Electrolux but I don’t want to lose another U.S. manufacturer to a company that has no incentive to stay here. I am also tired of the big guns consolidating to the detriment of the market.

  2. Bob Baird says:

    Don’t think there would be any anti-trust issues after the Maytag/ Whirlpool acquisition, which gave the combined Company 85% of the topload laundry business.

  3. Robin Kiernan says:

    GE for the most part is AMERICAN Made.. Very Wrong in today’s economy to send business outside.. I sell a lot of Cambria.. It is American made and not only is it amazing in quality but my clients like that it is American made

  4. Bruce Graf says:

    You can see why GE would want tom, but I wish they wouldn’t. They don’t need the money, they’re doing quite well. It would be such a shame after GE has brought all manufacturing back to the US. Anyone can sell for the right reasons, how about they DON’T sell for the right reasons!

  5. Richard Stark Appliance Manager says:

    Why is it the we (Americans) have the ability to build the best products in the world but have gone the way of $$ over quality. What happen to the pride of American made products now we look to over seas line to get any quality. With Whirlpool having the hold on the appliance market and not wanting to build quality any more. We used to have a 5 year warranty on appliances and now the give us 365 days. If you have trouble one the 366th day that’s to bad Whirlpool will not even try to help the customer. WHAT IS WRONG with America don’t we have any pride left???

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