News Analysis | Louisville sleeps easier with GE Appliances' sal - WDRB 41 Louisville News

News Analysis | Louisville sleeps easier with GE Appliances' sale to Haier

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GE Appliance Park GE Appliance Park
IUE-CWA 761 President Dana Crittendon IUE-CWA 761 President Dana Crittendon
Louisville Mayor Greg Fischer Louisville Mayor Greg Fischer

LOUISVILLE, Ky. (WDRB) – Speaking to reporters Friday morning after Haier Group said it would buy General Electric’s Louisville-based appliance division, Louisville Mayor Greg Fischer paused to repeat an important point.

“We get to keep the headquarters and the employees,” Fischer said.

A year and a half ago, Fischer tried, as mayors do, to put a positive spin on the now-defunct deal to sell GE Appliances to Electrolux AB.

But when that deal was announced in September 2014, no one knew whether the 3,800 union jobs at Louisville Appliance Park would be moved to Electrolux’s plants, most of which are in states unfriendly to unions.

No one knew whether the 2,200 white-collar workers who run the division would be consolidated into Electrolux’s headquarters in Charlotte.

Louisville leaders didn’t publicly acknowledge those fears at the time. Now they do.

“There was a lot of concern about what would happen to the GE presence in our region under the other deal,” Deanna Epperly Karem, Greater Louisville Inc.’s vice president of economic development, said Friday. “I think this deal really gives us confidence to know that what we have here will stay here.”

Haier, a global appliance and electronics maker with $32.6 billion in annual revenues, is based in Qingdao, China.

Haier America’s headquarters, with about 200 employees, is in Wayne, New Jersey. But the company made clear on Friday that Louisville will remain the headquarters of GE Appliances and the division’s current leaders, including CEO Chip Blankenship, will remain in place.

“Haier wants our management team to remain intact and run the business with similar governance and oversight to today’s running rules,” Blankenship said Friday in a company-wide email to GE Appliances.

When the Electrolux deal was announced, Blankenship couldn’t say whether he or his management team would continue in the job or whether jobs would move to Charlotte.

In a news release, Haier said GE Appliances “will continue to be operated independently under the direction of a local board with the participation of GE's current senior management team, who will guide the strategy and operations of the business.”

Another concern with the Electrolux deal was that production jobs could be shifted among U.S. plants, of which Electrolux owns five.

“There was quite a bit of product overlap and some concern about us keeping all the jobs we have here at Appliance Park,” Fischer said Friday.

Haier’s scant U.S. presence includes a refrigerator plant in Camden, S.C. – which the company recently committed to expand and add 410 jobs – and a research and development center in Evansville, Indiana.

“Moving Appliance Park (product) lines around the country to Haier facilities doesn’t make sense, because they don’t exist,” Fischer said.

A Haier representative, who refused to be named, said Friday that there is “no consolidation envisioned” between GE Appliances – which will retain the GE brand name – and Haier America.

“Plans as they stand right now are for GE Appliances to maintain management, maintain leadership, and to give them flexibility to run the business and let them continue to invest and grow under the GE Appliances brand name,” he said.

The deal does mean that IUE-CWA Local 761, the union representing hourly workers, will likely have to negotiate a labor contract with Haier, said Dana Crittendon, president of Local 761.

Crittendon said Haier will maintain the pay and benefits guaranteed by the GE contract for at least a year, and he doesn’t anticipate any difficulty reaching new terms with Haier.

“I don’t think it’s going to be a big issue,” Crittendon said.

Haier also agreed to pay top-dollar for GE’s appliance unit -- $5.4 billion, compared to the $3.3 billion Electrolux had agreed to pay.

The increase in price partly reflects the appliance division’s improving financial performance. Haier said the division’s 2015 profits are “up nearly 50 percent from levels two years ago.”

In 2014, GE Appliances made $400 million on $5.9 billion in revenue, Haier said.

Copyright 2016 WDRB News. All rights reserved.

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