GE, tracing its roots to Thomas Edison, sells its light bulb business

Major League Baseball played its first night game under GE floodlights in 1935. Nick Holonyak, an engineer, developed the first visible light-emitting diode, or LED, at a GE lab in 1962. And the company’s connection to the light bulb was captured in its ubiquitous television commercials, which promised, “We bring good things to life.”

The uncoupling struck some as a pivotal moment, as if Kellogg had jettisoned its cornflakes business or Ford had stopped making cars.

Still, for years GE had been shifting away from that part of its business as it sought to focus on high technology, said Joseph Bower, a professor emeritus at Harvard Business School. In that sense, he said, the sale was symbolically significant but did not signal a major shift in the company’s strategy.

“Iconic is the right word because it is not a fundamental change to GE,” he said. “I suspect it could have been done a long time ago because, as GE looked at its portfolio, its consumer businesses like toasters and things like that weren’t good, profitable businesses.”

GE sold its lighting business to Savant Systems, a home automation company based in Massachusetts. GE did not disclose the terms but said the lighting division’s headquarters would remain in Cleveland and its more than 700 employees would transfer to Savant upon completion of the sale. The deal also included a licensing agreement to allow Savant to use the GE brand.

Closing chapter

Thomas Alva Edison (1847-1931), who developed the first electric light bulb, in his laboratory in New Jersey in this undated photo. Credit:AP

The transaction represented a closing to GE’s opening chapters in the second Industrial Revolution. The company traces its roots to Edison’s experiments in his laboratory in Menlo Park, New Jersey, which made him the first recipient of a US patent for an incandescent lamp in 1880.

It was one of 1093 US patents Edison received, more than any other inventor in American history.

In 1892, the company Edison had established to market his products, the Edison General Electric Co., merged with a competitor, the Thomson-Houston Electric Co., to form a new firm, the General Electric Co.

Edison would not remain part of the company for long. In 1893, he sold his stake in General Electric for a reported $US1.5 million, or more than $US430 million ($650 million) in today’s dollars, according to GE.

Over the next century, the company would become a bellwether of the American economy, turning out jet engines, locomotives, gas turbines — and lots and lots of light bulbs.

For nearly 130 years, GE Lighting was at the forefront of every major lighting innovation, from the dawn of incandescent bulbs to the first energy-saving fluorescent bulb, introduced in 1974, according to the company.

But the business began to dwindle with the proliferation of LEDs, which need to be replaced less frequently because they are longer-lasting and more energy-efficient than traditional incandescent lights. Industry data showed that LEDs outsold all other types of bulbs for the first time in 2017.

GE, which reported $US95 billion in revenue last year, has not disclosed for several years what portion of its business comes from lighting. But Bower said light bulbs were “not really significant for a very big, big company.”

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H. Lawrence Culp Jr., GE’s chairman and chief executive, called the sale “another important step in the transformation of GE into a more focused industrial company.”

“Together with Savant, GE Lighting will continue its legacy of innovation, while we at GE will continue to advance the infrastructure technologies that are core to our company and draw on the roots of our founder, Thomas Edison,” he said.

The New York Times

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