General Electric to merge appliances, lighting divisions

<br>HARTFORD, Conn. (AP) _ General Electric Co. said Thursday it will immediately merge its lighting and appliances businesses into a single unit, GE Consumer Products, to save money and simplify operations

Thursday, August 29th 2002, 12:00 am

By: News On 6

HARTFORD, Conn. (AP) _ General Electric Co. said Thursday it will immediately merge its lighting and appliances businesses into a single unit, GE Consumer Products, to save money and simplify operations around the globe.

``Because appliances and lighting have powerful connections with similar consumer bases, we believe they will now be able to grow more successfully together than either would on its own,'' GE chairman Jeff Immelt said in a news release.

The company said the new unit, with combined revenue of $8 billion, will be headquartered in Louisville, Ky., with a substantial presence in Cleveland.

``This reorganization will enable Lighting and Appliances to provide more cost-effective and pointed approaches to supporting all of our customers' needs,'' Immelt said.

There were no details on the effect the combination might have on employment, but GE spokeswoman Alex Constantinople said it was likely there would be an impact over time.

Scott Davis, an analyst with Morgan Stanley, said the change appears to be another move by Immelt to put his own stamp on the company after taking over from legendary former CEO Jack Welch. In July, Immelt announced a reorganization of GE Capital that split the financial services giant into four divisions.

``Both businesses are selling to consumers, both businesses have below-average margins at the firm, and certainly there appears to be some synergies in putting the two businesses under one management structure,'' Davis said.

GE officials would not comment earlier this week on possible acquisitions or divestitures, after an analyst suggested GE was likely to make some multi-billion-dollar acquisitions in the coming months.

Constantinople would not comment Thursday on whether the combination would set up the businesses for a sale, but said: ``We constantly review every business, and where there are opportunities to create growth and build our brand we will pursue them.''

GE Capital, which generates 40 percent of the conglomerate's earnings, became GE Commercial Finance, GE Insurance, GE Consumer Finance and GE Equipment Management. Davis said the changes in consumer products are not as significant as the revisions at GE Capital, but still meaningful.

For many consumers, appliances and lighting are GE's best-known products.