It appears that the company that Thomas Edison founded, GE, will shortly be out of the electrical industry … or mostly.
“Phase three” of the exit, as reported by the Edison Report via a copy of an internal letter, was the announcement, that GE Lighting is officially up for sale (which has long been rumored, and multiple times).
While it is not a surprise given the changes to the lighting market and given that Sylvania (now LEDVANCE) and Philips sold their lighting businesses, it is one of GE’s final links to its past (and the letter doesn’t say if Current by GE is part of the sale or if they are keeping that aspect of the lighting business … but few have understood the relationship between GE Lighting and Current by GE).
Note – here’s a good page that highlights the confusion between GE Lighting and Current by GE.
Some thoughts:
- GE Industrial Solutions is currently up for sale with ABB, Schneider and private equity bidding for it. It is felt that a decision will be made by the end of the month. Comments in our Phase 2 posting note that there have been meetings at some of their plants with varying amounts of information.
- When the Industrial Solutions and Water businesses were put on the market it was said that there was a dollar amount that Jeff Immelt wanted to raise. Perhaps the Industrial Solutions deal, since round 2 bids are already in, isn’t as lucrative as needed and Lighting will help make up the difference.
- Given that the Sylvania and Philips sales, for their lamp businesses, were for surprisingly low numbers, it’s doubtful that the deal will generate a huge sale / proceeds for GE.
- For distributors, a sale of GE Lighting probably doesn’t mean much. Lamp sales have declined with individuals and companies moving to LEDs and the price point of LEDs continuing to decline.
- Aside from some national chain business, GE Lighting appeared to be “challenged” in earning distribution space.
- Someone … private equity, an Asian company, a fixture company looking to complement their offering, will buy it and “life will move on”
- There are many sources for lamps with companies such as TCP, Satco, Eiko, Halco and others gaining share at the expense of what was “The Big 3” who have now, essentially, disappeared.
- A beneficiary of this could be Sylvania. In talking to one distributor, he referenced the Sylvania brand name as a value. He recognizes that the company is different than it was, is now owned by MLS, but he said “they have a brand that is known by contractors and other buyers and have been the most consistent of the large lamp companies.”
It’s not an unexpected move by GE as according to people internally, it hasn’t been felt that GE executive management wants to be in the electrical industry, nor respects the company’s roots or understands the business. Perhaps new ownership of both companies will enable both companies to better support distributors and end-users, will invest into the businesses. re-energize the cultures and rekindle the innovation of Edison?
If you are a GE Lighting distributor, does the sale impact your lamp line strategy? What do you think a buyer of GE Lighting
- Will get (what are the benefits of buying it other than access to distribution channels) and
- Needs to do to grow the business
And whom do you think are likely bidders / buyers?
7 Comments
I did receive a call this morning from Nickolas Noel whose title is Executive, Communications for Current by GE (http://www.ge.com/contact/press) to advise, and clarify, that Current by GE is not part of the GE Lighting sale and that, for Current by GE, it is business as usual (in my words).
Hope the clarification helps Current by GE distributors.
I am a bit saddened by all this. As a young person, I returned home from Viet Nam while flying helicopters for the Marine Corps and sought out GE in 1966 for a more peaceful job. My dad had recommended that I think about GE as he had spent a 35 year career with them in the turbine business. So I jumped in to an intern program called the Technical Marketing Program which afforded me several stints in product departments which served the construction markets around the country. One of my managers felt I was ready for a field sales assignment and I was moved to a sales office in Kansas City. I found that I really enjoyed selling and that I had the “might” of the great General Electric Company at my back. After all GE was a global giant and there was little they could not do. We started to hear things about the next great CEO of the company- Jack Welch- as he moved his way to the top.
I became disenchanted in the mid seventies and left GE for the distribution side of the business. At the age of 29 or 30 I expected to be a mid level manager of sorts but that wasn’t happening so I went for a change.
I had some success on the distribution side and was promoted to the management side and then became recruited by competitive distributors and manufacturers. In 1983, Eaton offered me a sales job in the Miami, Florida area. It was a dream job, Eaton had no presence in south Florida so I couldn’t screw things up. I had a great five year run and then returned to distribution where I have remained ever since.
Mr. Welch had visions of more greatness for GE, but, in areas that I felt were out of GE’s comfort zone. I obviously was caught up in my own experience plus that of my father’s and thousands of others who built GE to be an industrial giant. I the had no vision of where Mr. Welch wanted to take the company.
Fifty one years later I am watching as Jeff Immelt is working to sell off several of the divisions of the company that represent the industrial greatness that the company once had. Goodness, no lamps or switchgear?
GE started stripping the combined control/distribution/appliance business in the mid 90’s when Lloyd Trotter & John Opie turned it into a classic Boston Consulting Group “Cash Cow”. Investment and high performing people were denied or fled. The appliance guys are now thriving with the new Chinese owners. Just another disaster visited on the industrial and consumer customers who Jeff Immelt is totally clueless about and disdainful of. Big negative on Jack’s legacy too for putting Jeffy in the position to do all this. BTW, combined down to the first level of management not just in the conglomerate sense. Very sad all around.
We were a GE Lighting distributor but have been slowly switching to other manufactures like Ledadvance. Have very limited shelf stock of GE left. Pricing and support just not there.
GE Lamp distributor for nearly 50 years. We never felt as a single location we got much love from GE. I made many sales calls only to find out the customer had better pricing than I did through some national chain. Very little GE on the shelf and most of my customers aren’t loyal to any manufacture.
I don’t know who would want to buy this. Old technology, declining market potential unless it is some Asian company that can also get the name and will eventually distribute their LED products.
For years the local factory rep in our area basically supported his good friend at Guillev*n, and not only that he also made it hard for other distributors to even want to offer or stock the line through his back end shenanigans.
Well I suspect he may be looking for a job soon!
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