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TWICE One-On-One With GE's Brett BeGole

3/12/2012 12:01:00 AM Eastern
ORLANDO, FLA. – As product general manager for GE Appliances, Brett BeGole is responsible for the company’s kitchen and laundry lines, and has a major say in how its $1 billion investment in majap R&D is spent.

TWICE caught up with BeGole on his first anniversary as product chief during the Nationwide Marketing Group’s spring meeting here last month.

TWICE: What prepared you for this job?

BeGole: I’ve been with GE for 22 years in various manufacturing leadership and product management roles, including transportation, lighting and sourcing. Most recently I led GE’s global locomotive operations.

TWICE:
What brought you to appliances?

BeGole: I followed the money. I saw a major investment in GE’s appliance business – $1 billion – and a major investment in the U.S. We’ve already created 400 new jobs here and will have 1,000 new positions by 2014.

TWICE: For years manufacturers have pushed production offshore to lower costs. How can you afford to bring it back?

BeGole: We’ve changed the way we approach manufacturing and design, something we call lean technology. Both disciplines are now in the same location, and we also bring in assembly workers to help design the production lines and assemble pre-pilot and pilot programs. It helps us find any issues well in advance and results in higher quality levels.

We still source some products overseas, but global costs have gone up and more components are being made and assembled here. We brought back water heaters, bottom freezers, and are bringing back some front-load washer capacity. With lean technology we can do this cost effectively, and we’re going to back that up with some advertising.

TWICE: Chip Blankenship succeeded Jim Campbell as president/ CEO of GE Appliances in January. How does his aviation background suit his new role, and what changes should we expect on his watch?

BeGole: Jim started the reinvestment in appliances and U.S. production, and Chip will help us with the execution. He’ll show us how to increase cycle times, and make the operation run faster. The changes will be seamless to the customer. He has managed large investments for GE, such as the development of the Boeing 787, and while there was a bit of a learning curve, he was out there visiting with retailers on day one.

TWICE:
GE had been looking to divest its appliance business. What changed?

BeGole: We decided 15 months ago to keep it. The company’s focus had been on gas turbines and wind technology, and appliances didn’t get any investment. But now we realize that technology can be a competitive advantage.

TWICE:
For example?

BeGole: Our latest bottom freezer for GE and GE Profile. It has an in-the-door water filter that removes pharmaceuticals like beta blockers, anti-depressants, pain relievers and oral contraceptives from drinking water, and the dispenser has an auto-fill feature that senses the size of the container and fills it with the precise amount of water automatically. It hits in May.

TWICE:
Much had been made in the industry about smart-grid enabled appliances, but interest has seemingly waned.

BeGole: Our demand-side management products are now in four demo communities, and we’re ready whenever the utilities are. But we also see energy-saving opportunities in more efficient appliances and the connected home. Our GeoSpring hybrid water heater can save you $320 a year in energy costs, and if you’re traveling and forget to turn your hot water heater off you can do so remotely by cell phone.

TWICE: We understand that GE will be implementing another price increase following the industrywide cost hikes that went into effect Jan. 1.

BeGole: Yes, on May 1. Today’s products are significantly better than they were in the past at the same price point. But material costs continue to go up, the cost of fuel is going up, and we need to cover that. We want to make sure we can be profitable and can continue to fund R&D.

TWICE: Will the appliance industry continue to follow consumer electronics down a promotional path?

BeGole: I can’t speak for the industry, but at GE we try to take a very disciplined approach. We have a defined time window for promotions – six defined holidays – and we think this helps the retailer and the consumer.

TWICE: What is GE’s policy on e-tail distribution?

BeGole: Brick-and-mortar drives our brands and products. We like our brick-andmortar distribution channels — it’s what does best for our products, and we haven’t sold to Amazon. We see the Internet as a blend, a marriage, and it will continue to be important as a way for the customer to get educated about our products.

TWICE: Do you foresee a turnaround in the appliance industry this year?

BeGole:
The industry was down 5 percent in 2011. We’re not out of the woods yet, but we are starting to come out of this. Our GE Café brand has been hugely successful, as have our bottom mount freezers with in-door filters and LED lighting. If the downturn had been limited to the appliance industry we may have limited our investment, but as it is we’re refreshing the lines and bringing out new ones.
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