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Spin Off GE Appliances? It’s The Same Old Song

Like the swallows at Capistrano, or more precisely the dandelions on my lawn, the chorus of investors and analyst types calling for GE to spin off its venerable major appliance division has returned.

For years critics have demanded the head of GE majaps, that odd piece of the puzzle  — along with light bulbs and NBC TV — that doesn’t provide the roaring returns of the conglomerate’s jet engine, medical equipment or finance operations.

But now, following a disappointing quarter sparked by the sub-prime mortgage meltdown, and peeved by poor earnings guidance, the chorus has returned, only louder and more bellicose.

Even former CEO Jack Welch has joined the fray, admonishing his successor Jeffrey Immelt in a rare public smackdown for failing to give Wall Street a heads up on the profit shortfall.

How quick they are to forget the appliance industry’s record 10-year run as it rolled out innovative, commercial-grade products and rode the wave of a rising housing market. And what of GE’s long-held belief that white goods serve as an important touch-point between it and consumers, keeping the brand front and center in the public consciousness?

Spinning off appliances would have a profound impact on the majap industry, which has already been rocked by the consolidation of Whirlpool and Maytag, the two largest U.S. players. What’s more, a jettisoned GE Appliances would put No. 3 white-goods retailer The Home Depot and its other majap vendors in a precarious position, as the home improvement chain built its entire majap model around GE’s fulfillment capabilities.

Since Mr. Welch is so concerned about GE’s share price (and, ostensibly, his stock options), perhaps he can help shore up the bottom line by shortening the strings on his platinum parachute.