General Electric will not be exiting the major appliance business anytime soon, according to its chairman/CEO Jeff Immelt, who was the keynote speaker at the AVB/Brand Source national convention, held at the Paris Hotel, here, last week.
Immelt, a 22-year GE veteran who worked as a GE appliance exec from 1989 to 1993 discussed GE’s view of the major appliance business, the division’s current strategy, and provided an overview on economic trends. (See story on p. 81.)
About GE’s future in appliances, Immelt noted, “We have no interest in selling the GE Appliance business” in the foreseeable future. “No one out there can run the business better than we can.” He added that while there is “room for improvement” he wants to “keep it in the family — a GE business.”
The GE chairman/CEO said that while in 1982 appliances was 15 percent of GE’s overall earnings, vs. less than 3 percent today, the appliance business is very important to the company because of its “closeness to customers” and its ability to “build the GE brand.”
In discussing the changing nature of major appliance distribution, Immelt said looking at the might of Home Depot, Lowe’s and Sears, the “demise of [independent retailers] has been predicted many times. But strategies like Brand Source continue to make you a factor.”
Immelt said that GE Appliances must deliver “a consistent message,” which he admitted was lacking over the past 20 to 25 years when the operation changed strategies several times, protecting independents, dropping them and going to superstores, and usually at the wrong time. He also stressed that GE Appliances must fulfill six objectives:
- Invest in products and innovation. Based on his experience in appliances, “good products sell a lot and bad products sell less, no matter how good your sales team is.” That is why GE introduced 80 new products during 2003 and insists that “quality must be a given.”
- Provide an integrated approach of sales and marketing within GE. “We can’t predict winners and losers in the marketplace,” Immelt said, adding, “We try to support everyone to give you a chance to win.”
- “Be brutal on cost.” Today’s GE appliances vs. products from 1950 “provide the best value in the world.” And he noted, “While we don’t like to move factories” out of the U.S., it has to be done at times “to reduce cost as well as provide a full appliance line.”
- Measure product “value and not just [market] share.” He said that GE and retailers “have bad habits. We all need to sell a better mix. Without selling the high end we have little interest here. We can do it.”
- “Focus on the brand.” And that includes GE, Monogram and Profile.
- “Focus on people who know the industry.” Immelt complimented his current appliance management team and added, “This is a great place to train people.” Immelt counted himself as one of those GE execs who benefited from the appliance business. “There is no doubt that I wouldn’t be chairman if I wasn’t in appliances. It teaches management skills.”