GE Appliances plans to open new distribution facilities in Dallas, Denver, Atlanta and Northern California to be closer to its customers, but CEO Kevin Nolan said that the manufacturer remains committed to Louisville.
Nolan told Insider Wednesday morning that GEA will continue to invest about $100 million per year in Appliance Park — the same amount that it invested last year — though the money will go primarily toward increased capacity, rather than increased product variety.
On the two-year anniversary of the iconic American appliance maker’s acquisition by China-based Qingdao Haier, Nolan also said that GEA is adopting some of its parent company’s strategies, such as being closer to the customer and allowing its business segments to operate more like independent businesses.
“We’re growing,” Nolan said. “We feel good about the business.”
While he declined to talk about market share, the CEO said the company is seeing more demand as well as greater profitability.
The company’s investments in marketing and making sure that it aligns customer demands with the right brands and products is paying dividends, he said.
The IUE-CWA Local 83761, which represents GEA’s hourly workers in Louisville, could not be reached. The 1,000-acre local campus employs about 6,000. Union leaders previously have told Insider that workers worried about the parks’ long-term viability, because products being moved out of the park without new ones being brought in.
GEA told Insider Wednesday in an interview that jobs numbers at Appliance Park in Louisville have remained steady and that the company is focusing primarily on capacity and making the location and its products more competitive.
Company leaders previously have said that Appliance Park, the only location with a unionized workforce, was the only one of its North American operations that was not profitable.
‘House of brands’
Nolan said that Haier’s push to get GEA to focus on American manufacturing operations, such as the recently unveiled 120,00-square-foot expansion in Selmer, Tenn., while moving closer to the customer to more quickly react to market demands, has imbued GEA with a new sense of purpose.
“I think that’s been good for us,” he said.
In addition, GEA now focuses on becoming a “house of brands” — GE, Cafe, Monogram — rather than just focusing on the GE brand. That approach has mean a shift in marketing and allowing GE Appliances units to work more independently, as “micro-enterprises,” to more quickly react to demands within their segment.
For example, whereas the Zoneline air-conditioner, a product for hotels, previously would have fallen in a more general category and would have been managed with other room air-conditioners, now Zoneline is its own micro-enterprise with a dedicated team.
“People feel like it’s their business now,” Nolan said. “We like the results that we’re seeing.”
The planned expansion of GEA’s distribution network, which will occur with the help of partners, will add more than 220 jobs in distribution, delivery and in-home installation, the company said.
That expansion, GEA spokeswoman Kim Freeman said, will support growth in the company’s business with homebuilders. Appliance makers such as GEA often strike exclusive deals with homebuilders that boost sales.
To be able to ink those deals, manufacturers must have a good distribution network that enables them to deliver products quickly.
“That’s has been one of our core strengths,” Freeman said.
Nolan said he worried about increasing inflation pressures in the economy, especially in distribution.
Fuel prices are rising, and companies are struggling to find and keep truck drivers. In addition, manufacturers are seeing rising prices for plastics and steel, Nolan said.
Despite those pressures and a general concern about being able to respond to customer demands more quickly, Nolan said that GEA has done well to change how it is getting products to market.
“You do feel there’s a lot of energy in this place,” the CEO said.
And that’s a turnaround from the early days of the Haier acquisition, which brought lots of anxiety about the potential impact of a Chinese company taking over an iconic American brand.
But, Nolan said, the Chinese owners support investing in Louisville, empower local leaders and encourage employees to improve their communities.
“It’s been refreshing,” he said.