Future of Appliance Park up to Electrolux after tentative sale o - WDRB 41 Louisville News

Future of Appliance Park up to Electrolux after tentative sale of GE appliances division

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LOUISVILLE, Ky. (WDRB) -- GE has signed a definitive agreement to sell its appliance business, headquartered in Louisville, to Electrolux for $3.3 billion -- and it is not clear whether the appliance division will remain in Louisville.

For months it has been rumored that Electrolux was interested in buying GE's appliance division, and now it looks like it's actually happening.

Swedish-based Electrolux will continue use of the GE Appliances brand. The transaction has been approved by the board of directors of both companies.

The deal is targeted to close in 2015.

The sale will generate an estimated after-tax gain of 5 to 7 cents per share at closing.

In a press conference Monday morning, GE President and CEO Chip Blankenship explained the deal, calling it "very exciting news for the General Electric Company, and for GE Appliances."

Blankenship continued: "As you know, GE announced that we signed a definitive agreement to sell the GE Appliances business to Electrolux, The transaction is subject to normal and customary closing conditions, regulatory approvals in the U.S. and other jurisdictions. We anticipate that this sale will close sometime in 2015."

"This announcement is very positive and it is an important next step in the future of GE Appliances," he added. "With the investment in our facilities, products and services in recent years, we've become stronger and better able to deliver for customers and for consumers. We've invested not only in our plants and our products, but in our people. We are more capable today of serving customers than we were just a couple of short years ago."

But at the same time, Blankenship said, GE had been feeling heat from new competitors that had entered the U.S. appliance industry in recent years.

"These dynamics made it clear that we needed to pursue new business models and new strategic options for our business to continue to grow and to serve our customers even better," he said. "Aligning GE Appliances with Electrolux – a company whose sole focus is being a global leader in appliances – is the right business model to ensure our long-term presence and competitiveness. By joining together with Electrolux's global reach, both of our businesses' complementary brands and our shared focus on innovation and quality, we will be better able to compete both in the U.S. and globally."

"Electrolux is the right global business for our customers, consumers and employees," said GE Chairman and CEO Jeff Immelt. "GE Appliances' people, valuable home appliances brand, products, distribution and service capabilities make it a perfect fit with Electrolux and its accelerating growth in the U.S."

But as for whether the appliances will continue to be manufactured in Louisville, Blankenship declined to comment, stating that the decision would be made by Electrolux.

"Again, I can't speak for another company at this stage – because, remember, we're two separate companies right now," he said. "We have not closed the transaction, but we wouldn't enter into this arrangement if we didn't think it was the best thing for the future of our business, and the future of Appliance Park and the future of this community. We feel very strongly about our role in this community. I've been talking with the mayor. I'm gonna talk with President Ramsey here soon today, and we're gonna keeping forward in supporting them and enjoying their support through this process."

In 2008, instead of selling, GE invested about $1 billion to hire more workers and make new products.

After news of the sale was made official, Congressman John Yarmuth (D-Ky.) released the following statement:

"GE and Appliance Park have been fixtures in our community for generations, powered by a strong and dedicated workforce that has helped keep Louisville at the forefront of the revitalization of American manufacturing. Our community presents tremendous opportunities for growth and innovation, and I am optimistic that Electrolux and the employees at Appliance Park will work together to keep us moving forward."

Currently, GE employs around 6,000 workers in the Louisville area.

Kentucky Economic Development Secretary Larry Hayes said he and Gov. Steve Beshear could meet with Electrolux executives as early as Tuesday to discuss the sale.

"We always have concerns when there's a change in ownership," Hayes said. "At this junction, you know, we feel like it's business as usual. We've been in contact with the leadership at Appliance Park now- - the GE leadership that's in place – and their word is it's business as usual."

Hayes said GE leaders gave no indication prior to the sale that the move could result in a loss of white-collar jobs in Louisville.

"It's not as if something was broken out there. I mean, they've been profitable and they've been doing this for a long time, so you've got a workforce that I think has been very successful over a long period of time and I would think that the acquirer would be very interested in them continuing to do what they do very well," Hayes said.

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