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GE builds a home for domestic manufacturing in Kentucky

By: Bill Bregar

March 11, 2014

WESLEY CHAPEL, FLA. — A U.S. manufacturing renaissance is happening at GE Appliance Park in Louisville, Ky. — where the company is leading one in appliances, Lou Lenzi, director of industrial design at GE Appliances, said at the Plastics News Executive Forum.

GE Appliances has stepped up its research when working directly with consumers in focus groups, even going into their kitchens and laundry rooms, he said. Sometimes consumers give live feedback during product design sessions.

Lenzi showed slides of some of the new features. Refrigerators can dispense hot water to make tea or hot chocolate, and they have a bigger platform so you can fill up pots for cooking. Dishwashers are fitted with jets on the top rack to clean the bottom of sports bottles, travel mugs and baby bottles.

Lenzi said appliance designers used to respond mainly to buyers at big retailers. Now the company is doing much more consumer research of its own.

General Electric had steadily moved work out of the sprawling Appliance Park complex, which is so big it has its own zip code. Beginning in the 1980s, GE began outsourcing much of its production to Asian suppliers, to cut costs.

Then in 2008, GE CEO Jeffrey Immelt decided sell off the appliance business. The housing bust, then the Great Recession scotched that idea, Lenzi recalled. Equity markets and lending dried up. The amount of available capital shriveled.

So GE leaders refocused on appliances, looking at the total approach to business, not just chasing low wages, he said. The result was a $1 billion investment in equipment and people at U.S. factories, much of it at Appliance Park, which has adopted lean manufacturing and problem solving by employee teams.

“It reflected the commitment of General Electric to really invest in the appliance business and turn the ship around,” Lenzi said.

“It was built on a cultural change,” he said.

GE Appliance has aggressively recruited engineers, designers and skilled manufacturing specialists. Now, people from all functions work together, as designers, machine operators and molding technicians sit in the same room to plan new products. The company has greatly increased worker training.

It’s a big change from the outsourcing days, when GE outsourced production, then some design, to appliance makers overseas, Lenzi said.

“We were training and equipping our current competitors to come after us,” Lenzi said. “It’s a no-win situation, I guarantee you … We’re fighting, right now, those very same competitors that we’ve trained, from overseas.”