Timothy D. Easley/AP
Chip Blankenship, President, and Chief Executive Officer of General Electric Appliances, answers questions after announcing the pending sale of the GE appliance group to Electrolux during a news conference Monday, Sept. 8, 2014 at General Electric Appliance Park in Louisville, Ky.

GE sells appliance division to Electrolux for $3.3 billion

General Electric, which has been making household appliances for over a century, has sold off that part of its business to a Swedish concern.

General Electric, a household name for more than a century in part for making households easier to run, is leaving the home.

The company is selling the division that invented the toaster in 1905 and now sells refrigerators, stoves and laundry machines. GE has increasingly focused on building industrial machines such as aircraft engines, locomotives, gas-fired turbines and medical imaging equipment — much bigger and more complex than washers, and more profitable.

"They are no longer going to be a consumer company," says Andrew Inkpen, a professor at the Thunderbird School of Global Management who has written extensively about GE.

GE, based in Fairfield, Connecticut, Monday announced the sale of its appliance division to the Swedish appliance maker Electrolux for $3.3 billion. Electrolux will still sell appliances under the GE brand in attempt to leverage the company's long history.

GE has sold devices to people for its entire 122-year history, starting with the light bulb, which was invented by company founder Thomas Edison. The lighting division will stay, but it's just a tiny part of GE. Now GE will sell its products almost exclusively to other companies.

The company is hoping to return to favor among investors with higher, more consistent and more predictable profits.

GE is the only remaining member of the Dow Jones Industrial Average, first calculated in 1896, and as recently as 2004 it was the biggest corporation in the world by market value. But GE has frustrated shareholders by underperforming both the Dow and broader stock indexes for much of the last decade.

The company has been able to survive by shuffling its portfolio to shed unprofitable divisions or jump into a new, growing sector. And it has never shied away from abandoning historic businesses, like the plastics unit it started in 1912 and sold in 2007.

The latest version of GE will make mostly big, complex equipment, some of which it has been making for more than a century, like power generators, and some that is new to GE, like oil and gas drilling equipment.

In July the company spun off its consumer credit card business into a new company, Synchrony Financial. In recent years it has sold NBC Universal and its insurance operations and it is gradually shrinking its sprawling financial company, called GE Capital.

In June GE agreed to buy the energy and power generation operations of the French engineering company Alstom for $17 billion. And over the last several years it has been acquiring companies to help it become a bigger player in oil and gas drilling equipment.

Christopher Glynn, an analyst at Oppenheimer & Co., says the company now has the potential to show the strong results it was once famous for, though it still may take some time.

"It's still GE, it's still huge," says Glynn, an analyst at Oppenheimer & Co. "But this is a viable reset."

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to GE sells appliance division to Electrolux for $3.3 billion
Read this article in
QR Code to Subscription page
Start your subscription today