The rumors of GE selling its appliance division, which includes Roper Corp. in LaFayette, that began about the time it held its annual stockholders meeting have intensified in recent weeks, as evident in this message posted on the company website:
Our Commitment to Consumers
Today GE confirmed that the company is evaluating a wide range of strategic options for GE Appliances and is in talks with Electrolux and other interested parties. There is much work to be done before this process is completed, and we certainly cannot speculate on the outcome.
You likely have questions about what this means for you, the GE products you currently own and those you are considering for purchase.
Let me assure you that regardless of this process, you can count on GE Appliances to continue to:
• Deliver innovative and high-quality products.
• Honor and fulfill all warranty obligations.
• Provide industry-leading factory service.
Thank you for allowing us to be part of your home and family. We hope that we will continue to earn your trust for many years to come.
Sincerely, Chip Blankenship, president & CEO, GE Appliances
Since its creation in 1907, the appliance division and its products have been a household name in United States. But beyond its native shores, that is not the case and GE appliances are seldom seen abroad.
For an international conglomerate like GE, profits primarily generated by its domestic sales of appliances no longer fit with its strategic plans — and profits lag behind the revenue earned by heavy industry, IT and power divisions.
While the appliance division headquarters is located in Louisville, Ky., factories also are located in Alabama and Georgia.
The Decatur, Ala., plant makes refrigerators while the Roper (a subsidiary of GE) facility in LaFayette fabricates ranges, cooktops and microwave ovens.
The appliance division was put up for sale in 2008, but the global recession made such a costly acquisition difficult. Rather than sell, GE invested about $1 billion in upgrading its plants and slowed overseas expansion while bringing production back to the United States.
A recovering economy has led the company to concentrate on areas where it is the dominate provider of products and can generate greater profit margins.
GE, the company co-founded by Thomas Edison in 1892 and once synonymous with electric light bulbs and toasters, now is a power house in power generation and distribution, producing aircraft engines and health-care equipment.
Last year, the company sold NBC Universal to Comcast, and this summer GE is selling its consumer credit business — formed during the 1930s to allow Depression-era consumers a chance to buy GE appliances — that until the recent recession generated the corporation’s greatest profits.
Lighting and appliances now contribute about 3 percent of GE’s annual profits, according to the company’s financial statements.
Even as GE considers the sale of its appliance division, the Roper facility continues operations and this week is in the process, in partnership with the Georgia Department of Labor, of hiring as many as 150 new production workers for the plant that employs a total of about 1,650.
The local plant has been a strong performer in recent years — something reflected in GE’s commitment to Roper.
“This is a tremendously exciting day,” Roper president Scott Ossewaarde said last August when the plant debuted a major expansion of its production line. “We're here not only to celebrate the completion of this expansion but to celebrate our future — a future made possible by an $88 million investment GE made in our facility, the products we make here and our people.
“In fact, thanks to this investment, we have hired an additional 90 people to help build these great new products.”
Total shareholder return expanded by 38 percent in 2013, ahead of the overall market. GE added $64 billion of market capitalization during the year and, at $282 billion, makes it the sixth most valuable company in the world. — GE annual report for 2013
Gov. Nathan Deal, during the Aug. 12, 2013, ribbon-cutting, praised the local workforce and their contributions to GE’s decision to grow their LaFayette facility.
“It is not only good news for Walker County and the surrounding areas, it is good news for the state of Georgia,” Deal said. “It is one of those important steps forward to make our state the number one place in the country in which to do business.
“Industry doesn't come and industry does not expand unless they have the kind of quality work force that it takes to make them profitable,” he said. “You’ve proven that this is a place that can do exactly that.”
U.S. Sen. Johnny Isakson echoed the governor’s praise for the plant’s success.
“GE is the right company, in the right state, at the right time in Georgia,” Isakson said. “Jobs for Georgia are prosperity for Georgia. Jobs for Georgia are about the future of our state. Jobs for Georgia are good for Georgia, and I want to commend General Electric for the investment and the time they paid to make Georgia an even better state.”
Officials with AB Electrolux have visited the Louisville, Ky., home of GE appliances and seem to be the frontrunner should the sale occur. Last week, the Swedish firm confirmed that it was negotiating the purchase but that no agreement had been reached.
Business writers in Kentucky have reported Electrolux might be interested only in acquiring the French-door refrigerator production line or could have designs on purchasing the brand and its manufacturing facilities.
Electrolux, the world’s second-largest manufacturer of home appliances, sells products under its own and the Frigidaire name in the United States and adds the AEG and Zanussi product lines for distribution in other countries.