New GE Appliances CEO says 'a lot of good things to come' in Louisville
Under new Chinese ownership, Louisville-based GE Appliances has invested $100 million to upgrade manufacturing capabilities this year. The company's new leaders sat down with reporters for the first time on Friday.
LOUISVILLE, Ky. (WDRB) -- Under new Chinese ownership, Louisville-based GE Appliances has invested $100 million to upgrade manufacturing capabilities at Louisville Appliance Park so far this year, including $30 million for a line of high-end, Internet-connected washers and dryers.
GE Appliances showed off the washer and dryer line, launched in June, for the media on Friday while making its new four-person executive management team available for a wide-ranging discussion about the future of the business and its presence in Louisville.
The executives said recent decisions to remove work from Appliance Park don’t reflect a concerted effort to scale back in Louisville, despite concerns raised by the union that represents about 3,600 rank-and-file Appliance Park workers.
“I feel good about Appliance Park – where we are here in Louisville and the strategy we’ve got, the products that we are coming out with. I think it’s a lot of good things to come,” said GE Appliances CEO Kevin Nolan, who took over the business in June.
Formerly a division of General Electric Co., GE Appliances was acquired a little over a year ago by Qingdao Haier Co. of China for $5.6 billion.
Then in June, GE Appliances CEO Chip Blankenship resigned after six years at the helm of the $7-billion-annual business.
Haier promoted three other executives to form an “executive council” to run GE Appliances alongside Nolan, a 27-year veteran of General Electric Co. and GE Appliances’ former chief technology officer.
On Friday, the executives told reporters that they’re optimistic about the future of Appliance Park but that more work needs to be done to improve its financial performance.
Appliance Park is a collection of factories producing refrigerators, washer and dryers and dishwashers*, among other products. It is the largest of GE Appliances’ four manufacturing sites and the only one with a unionized workforce.
Last year, when trying to get union workers to accept a number of concessions in a new labor contract, the company said Appliance Park itself was not profitable even as GE Appliances as a whole does make money.
Melanie Cook, GE Appliances’ chief operating officer, declined to comment on the park’s current profitability, though she said the company is satisfied with its dishwasher line and making strides with washers and dryers.
“Outside of that, we still have a lot of issues we need to work through to be competitive,” she said.
The sale to Haier capped a post-recession renaissance at the 60-year-old manufacturing complex.
After employment at park dipped to its lowest point during the Great Recession, General Electric began re-investing billions of dollars in the business and added about 3,000 production workers.
But since Haier took over in June 2016, GE Appliances management has made several changes that don’t bode well, according to officials with IUE-CWA Local 83-761, the union representing rank-and-file workers.
Last year, the company decided to outsource its finished-product warehouse operation to a third-party company, displacing about 200 union-represented warehouse workers. (The outsourcing plan was first disclosed in April 2016, after Haier had announced it would buy GE Appliances but before the deal was closed.)
Later in 2016, GE Appliances decided to stop producing the GeoSpring hybrid-electric water heater because of low sales.
In July, GE Appliances said it would move forward with a plan to shift production of a hotel-room air conditioner from Louisville.
The air conditioner line will move to the company’s factory in Smyrna, Tennessee.
The three moves affected about 440 workers*, though no one was laid off because all displaced workers could be moved into other open positions at the park.
But the moves still amount to job losses through attrition and other factors, Dana Crittendon, president of the IUE-CWA Local 83-761, told WDRB in July.
“When you lose a product line, that’s job loss,” he said.
On Friday, managers said there was a clear business case for each move.
“Absolutely there is no pattern. Each of these were taken on a one-by-one (basis),” Cook said. “If anything – look at the fact that we just made another $100 million investment in the park.”
Corrections: A previous version of this story misstated one of the products made at Appliance Park and the number of workers affected by the three actions.