ALERT: GE APPLIANCE DIVISION UP FOR AUCTION: May 14, 2008

It has been reported that GE will put the GE Appliance business up for bid.
The Wall Street Journal says:  "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."
Business Week: Goodbye to GE Appliances

Why Now?
GE Appliance has always been the subject of possible spin off or sell off. (see ApplianceAdvisor Sept, 2005 "GE Appliance Business for Sale?")
GE has been hit by the recession of course reporting a 14% drop in builder sales where GE is huge, and a 5% drop in consumer sales.  

What if it's not the recession, not the drop-off in sales, not the rise in oil prices, not the war in Iraq, not the coming election of anyone else.  What if GE is actually paying attention to the US$ exchange rate?  Take your time, roll it around in your head a bit.
WHAT DO YOU SAY?  But why?  The exchange rate has no meaning, except in the case..........except in the case....BUT IT CAN'T POSSIBLY BE TRUE !  IT CAN'T BE TRUE !  
Yes naive, I fear t'is true, that GE, 2nd largest manufacturer of appliances in North America with a 27% market share is setting itself up for foreign takeover at a Euro/US$ exchange discount of 30% since 2005.  The flag flying over GE Appliance will not be the Stars and Stripes, but instead could very well be the Iranian flag, or the red, white and blue banner of North Korea or Ethiopia, or the AK47 assault rifle be-decorated flag of Mozambique.
"Why at these prices it's almost an impulse buy!"  The US$ discount more than counterbalancing a sales related loss in value.

"So Rod Roddy, tell us what our contestants will be bidding on in the Showcase Showdown?"

• 2nd largest white goods maker GE Appliances with 27% of the US market.
• A 49% stake in the largest Mexican appliance maker, Mabe (which owns the largest Canadian maker and distributor CAMCO)
• The Monogram brand of high-end and pro-style appliances....the jewel if you will
• Diversified Refrigeration, maker of GE Monogram built-in refrigeration, which GE Appliance purchased January 2006
• A national direct sales force.  Pish Posh to 2-step distribution.
• The entire major appliance distribution infrastructure of Home Depot.  That's right!  If you bought it at Home Depot, no matter the brand, it was stocked, loaded, tagged, and delivered to you by the fine folks at GE under contract to Home Depot.

But Wait, There's More............

• The use of the GE "meatball" logo for enough time for you to settle in, feel at home.
• Appliance Park in Louisville, KY.  A collection of cavernous buildings visible from the moon and housing GE Appliance HQ, purchasing, sales, engineering, and the desiccated remains of a once mighty manufacturing juggernaut.

Who might be interested in GE Appliances?
The entire industry has been patiently waiting for South Korean giant LG to make an offer, and that seems about right to us.  Could it be coincidental that LG and GE just signed a patent sharing pact in February?

Louisville Courier Journal Q1 Results April 11, 2008:  GE's Louisville unit profit falls, broader drop sinks stocks
NOTE:  This editor was once employed as an intern by GE's Gas Turbine Division of Schenectady, NY (zip code 12345).  
There is no telling how much this close working relationship effected the tone and content of this story.  "What have you done for the General today?"

UPDATE May 15:  NY Times.  "GE Looking to Sell Appliance Division"