GE Playing Chess. What's Your Game?
Submitted by advisor on Sat, 05/23/2009 - 1:52am.
While GE Corporate has been schizophrenic in its love for the appliance business, this has not stopped the Appliance division from plowing ahead to reinvent and expand the industry while also building significant connections between GE Appliance and GE's other businesses. GE's Smart Grid strategy includes an array of new appliances, efficient hot water systems, and the systems to tie in solar, wind or geothermal systems to create the zero energy home.
Read the story.
Great story, and one that lights a path we've been telling you to follow for years.
So why is GE manufacturing its newest hot water products in China? Maybe they'll tell us.
UPDATE May 28: See reporting from Bermuda Bob (below titled Now THIS is More of What is Needed !!!) for moves to shift production back to Lousiville.
UPDATE June 1: GE Press Release
An Excellent Place to Start !!!
The "point of use" water has been a phenomenal concept for years because a traditional water heater (properly named a "tower system") is so energy inefficient ... Think of it, you essentially are keeping water hot for roughly 95% of the day, where the "point of use" system only uses energy when there is a demand for hot water !!!
The biggest problem in selling the concept is that no one in was able to bring an economical unit to market ... now GE has not only made the commitment to the concept but is retaining & creating job to boot !!!
Kudos to GE & Kentucky !!!
Let's just hope they take the momentum of this move to other portions of their product lines, especially their appliances !!!
Great
Good old American technology. See what we can do to help the environment when we put our minds to it. Congratulations GE.
Now THIS is More of What is Needed !!!
It has been reported that the State of Kentucky has offered GE $10 million in tax incentives to bring back their Water Heater production and set it up in Kentucky !!!
Here's a link to the story:
http://mfrtech.com/articles/2141.html
If America wants to re-claim jobs then others must take Kentucky's pro-active lead ... Kudos to them !!!
Job for Bob
Pretty spectacular reporting Bob. Great nugget. That's two in a row for you.
Advisor
Congrats Bob !!!!
Congratulations Bob for winning the golden press award of the Advisor Literary Group. The go to , award winning team of highly educated and well trained editors. You may have a new career if appliances do not work out. Good investigative reporting.
GE Indecisiveness ...
When GE announced that they were interested in spinning off their appliance divisions it was pretty clear that some divisions would go to manufacturers who were already producing some of their appliances ... pretty straightforward ... until people like Haier entered the fray and that changed the field of play !!! GE became concerned that they would be viewed as un-American because Haier is underwritten by the Bank of China and they are owned by the government ... so an American business icon would have sold out the American people !!! GE wisely circled the wagons and used the excuse that in the present marketplace they could not get faire value for it !!!
The ancillary problem seems to be that while they continue to innovate in their other divisions, they have stagnated the appliance divisions and if they end up holding on to them will find themselves woefully behind the competition ... very similar to Chrysler ... possibly unable to catch-up !!!
It's time for GE to "fish or cut bait" or risk people like myself unwilling to recommend their products to clients !!!
GE Indecisiveness
I don't buy it. Who was going to buy GE except someone from outside the US? Is this Haier story a theory, or related to some news article we did not see? The article we did see was that Haier denied that it was seeking to acquire GE. (see our August 2008 story).
You are undervaluing this new GE strategy. It ties together GE Appliances together with GE Electric, GE Wind, GE Power Systems, and is a persuasive argument for a consumer to buy all GE products. LG's ding batty internet connected fridges were gimmicks. This program is game changing, and leverages GE's competitive advantage.
Can GE bring that same competency to the nuts and bolts of an appliance that performs? Feast your eyes on the GE Monogram pro line.
Sure ...
I'd like nothing more than to see GE hold onto their Appliance Divisions because they have long been the cornerstone which many, many customers identify with ... the problem is that they have not yet made a definitive declaration that since they pulled themselves off the "For Sale" market they still remain an issue of reasonable conjecture as to if they are still up "For Sale" !!!
GE Strategy
GE strategy is to maximize profits increasing shareholder value. They are cold and calculated in this approach. They will do what it takes to squeeze every penny out of the perceived appliance division value. I do not think there is any legacy strategy involved. The Monogram line is topnotch for sure but a very small blip on their radar screen in terms of sales and profit. If they sell it is to unload a division not meeting GE profit crtieria. To think there are any executives there doing a slap happy dance to sell more product is to think that Rush Limbaugh is a democrat.