GE’s $1 Billion Gamble on the Light Bulb and Appliances

Dim Light Bulb
General Electric
(NYSE:GE) was supposed to sell off its division that produces the products that helped it become a household name in the United States, but the recession derailed that plan. Now, the company is taking what could be its final foray into recapturing lost market share in a set of industries that it practically created from scratch. General Electric CEO Jeffrey Immelt has invested $1 billion into the company’s lighting and appliance, consumer brands division (GE Home & Business Solutions) and placed Dr. Charles “Chip” Blankenship in charge as CEO of the division.

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The company may now produce trains and planes but its consumer brands are still an $8 billion business. Unfortunately, the consumer brands division that Blankenship has taken the reins of is has the company’s second lowest profit margin at 4 percent, according to Bloomberg. Only GE’s nascent energy management division has a lower profit margin and that division is a rapidly growing, emerging market. If Blankenship cannot pull off a turn around, GE may no longer be found in kitchens and homes.