Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 2
Kitchen Aid, Inglis, Roper, Maytag,

gee, who could be next?

Why, GE!

The Wall Street Journal reported that GE is preparing to auction off its appliances business, potentially bringing the conglomerate $5 billion to $8 billion. Its appliance division, one of the oldest businesses in the conglomerate’s 120-year history, helped make G.E. an American icon and may end up in foreign hands. The division, based in Louisville, Ky., has faced increased pressure in recent years from Chinese manufacturers, which have been growing at double-digit rates thanks in part to significantly lower costs.

Asian manufacturers are expected to be particularly drawn to the division, seeking to take advantage of G.E.’s widely known brand name as they try to become global businesses. Lenovo, the Chinese electronics company, successfully acquired I.B.M.’s personal computer division in 2004, in part to help establish itself on the world stage.

Among the expected suitors are Haier of China, which bid on Maytag two years ago; LG Electronics and Samsung, both of South Korea; Bosch of Germany; Electrolux of Sweden, which makes a few of Sears’s Kenmore line of appliances, most made by Whirlpool; and Controladora Mabe, a G.E. partner based in Mexico.

As part of a potential sale, G.E. is likely to hand over a license to use the G.E. brand for a short period of time, the people briefed on the proposal said. After the initial license for using the General Electric brand expires, the buyer of the appliance unit would be allowed to continue to use the Monogram and Profile badges.

G.E.’s stunning announcement, made more notable by its status as a barometer of the economy, shook Wall Street’s confidence: the company’s shares fell 13 percent that day, its biggest one-day loss in two decades. Even worse, for a company that prided itself on meeting expectations, G.E. was forced to cut its projected earnings growth for this year to 5 percent from 10 percent.

G.E.’s once high-flying stock price has fallen 20.5 percent during Mr. Immelt’s seven-year tenure, and many analysts and investors have called for transformational changes at the corporate behemoth. Last year, it sold its plastics business to Sabic, the big Saudi Arabian industrial company, for $11.6 billion.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.