General Electric is no longer in the light bulb business, the company announced on Wednesday.
GE said that its 129-year-old lighting unit — which was formed in 1892 from the merger of Thomas Edison’s Edison General Electric Company with two other firms — will be sold off to smart home manufacturer Savant Systems in a deal with undisclosed terms. The lighting division has been on the market for a buyer since 2017 and, by 2018, had become the company’s smallest division, accounting for under two per cent of GE’s $US122 ($185) billion in revenue. Low prices for light bulbs, as well as a rapid switch to more efficient lighting technologies lasting far longer than traditional incandescent bulbs, turned the unit into a money-loser for GE.
In particular, consumers have switched to light-emitting diodes that can remain operational for decades — a trend that is very unlikely to reverse itself, efforts by the Trump administration to roll back light bulb energy standards notwithstanding. As CNN noted, there’s a bit of a boomerang effect here, as GE was the company that invented LED lighting in 1962.
GE has been struggling to pay off tens of billions of dollars in debt it acquired over the decades and has offloaded off struggling units and assets to do so. It finalised selling its remaining stake in NBC Universal in 2013 and parted ways with its large appliance business in 2016. Other recent downsizing attempts have included unloading a $US4 ($6) billion stake in the oil industry and its commercial lighting business in 2018, as well as last year’s spinoff of its 100-year-old railroad division and sale of its BioPharma unit.
That left lighting as essentially the only sliver of GE left in the consumer market or with a direct connection to Edison. GE is now an industrial company centered on its aviation, health care, power, and renewable energy units. But the aviation business has seen devastating cutbacks during the ongoing coronavirus pandemic including thousands of layoffs, according to the Wall Street Journal. GE is also a major defence contractor that has sucked tens of billions of dollars in revenue out of the military-industrial complex since 2003.
GE-branded light bulbs will continue to be made under a licensing deal with Savant, however, and the companies told CNN the GE Lighting plant in Cleveland will not be closing or downsizing its workforce.
Robert Madonna, the founder and CEO of Savant, told the Journal that “Lighting is an extremely important piece of the smart home. And you can do it at a consumer price point.”
Editor’s Note: Release dates within this article are based in the U.S., but will be updated with local Australian dates as soon as we know more.