GE Appliances says rumors that it is going out of business are inaccurate, but the intended sale or spin-off of the appliances division, announced on May 16 by GE's chairman and CEO Jeff Immelt, could mean big changes for the appliance brand.
News and blog coverage of GE's intent to exit the appliance business may be fueling speculation in the industry that the brand will effectively disappear, although any sale will likely include a license to use the GE brand for a limited period of time. That is why the division's vice president of sales Dave Bilas contacted the media on June 3 with a letter attempting to "clarify some misinformation circulating in the appliance industry."
In the letter, Bilas states, "GE Appliances is not going out of business ... we are exploring strategic options that will grow this business—both globally and in the U.S." Bilas explained that the options being considered are a strategic partnership, joint venture, spin-off, or sale of the business, and that the target date to complete change in ownership is the end of 2008.
Since 2003, GE has been getting out of businesses that are more volatile and deliver slower growth, a strategy to increase its overall profitability and "transform [its] portfolio for long-term growth," according to a statement Immelt made in the company's announcement. Bilas' letter emphasized that GE Appliance's president and CEO, Jim Campbell, as well as the rest of the management team, including Bilas himself, will be staying with the appliances business whenever it is sold or spun off. He also stressed that regardless of who acquires GE Appliances, its focus will be on maintaining excellent service, and that the GE brand will continue to be a valuable asset.