General Electric, a company whose growth base lied in light bulbs, the brainchild of its legendary founder Thomas Edison, is move away from light bulb business. While the light bulb has been the symbol of GE, the American company has made the decision owing to the worsening conditions of business of late.
According to The Financial Times, GE has sold its light bulb division to Savant Systems, a firm specializing in smart homes. “Our aim is to pay back debts by selling part of our businesses and focus on the four major businesses – airline, healthcare, power, and renewables,” GE CEO Larry Culp Jr. said in a statement issued on Wednesday. “It is the latest step in dismantling the GE empire, which is saddled with too much debt and poor-performing businesses,” CNN reported on Savant’s buying of GE’s light-bulb division. Having grown into one of the biggest manufacturers in the world under the leadership of Jack Welch, who served as CEO for 20 years from 1981, GE found its refutation fading off quickly starting in the 2000s.
While light-bulb business is accountable for merely 2% of the entire revenues, it bears a symbolic meaning for the company as it started from a seller of light bulbs 128 years ago. Founder Thomas Edison merged his company “Edison General Electric” with “Thomson-Houston Electric Company” in 1892. Since then, GE has held a mythical status in light-bulb business. Ever since GE provided light bulbs in 1935 for night games of the Major League Baseball, it became the developer of some of the epoch-making inventions such as fluorescent light in 1938 and halogen lamp in 1959. But its light-bulb division has suffered losses since the advent of LED technology.
While the detailed conditions were not revealed, The Wall Street Journal reported that GE’s light-bulb division was sold roughly at 250 million dollars. The WSJ evaluated that the price was quite favorable for GE considering its meager share in the company’s revenue. “This asset sale isn’t going to make or break the company,” Bloomberg news opined. The news report added that this deal, which was clinched in the middle of a pandemic, will help GE as the coronavirus pandemic is deepening its cash crunch. GE’s share prices surged over 7 percent after the sale was announced.