The world as we know it continues to change, especially in the land of the lighting giants. The lighting industry last week began to digest news reports that GE Lighting would make some drastic changes to its strategy, including a move to terminate all its direct business in the potentially huge and hugely competitive markets of Asia and Latin America.
Citing a memo to employees from GE Lighting CEO Bill Lacey, lighting industry news site LEDinside reported that the change will take effect Nov. 30, and that shutting its business in Asia and Latin America will enable the company to focus its resources on improving the company’s profitability serving markets where it has built a bigger presence — North America, Europe and the Middle East.
According to market intelligence service Trendforce, less than 18% of GE Lighting’s revenues come from China and Latin America combined. LED lighting has become a fierce battleground of price competition in recent years with China-based manufacturers leaning heavily on production cost advantages.
GE Lighting is concentrating instead on investments in innovation that will lay the foundation for the company’s future, including a phase-out of production of compact fluorescent lamps (CFLs) and closing two production facilities in Lexington, Ky., in order to concentrate on LED lighting.
The company will establish a new incubator laboratory to accelerate innovation and develop new LED products with an emphasis on connected, intelligent lighting systems, in conjunction with an ecosystem of partnerships aimed at developing systems with greater creativity and flexibility.
Beyond lighting, GE also announced two acquisitions this week to establish a beachhead in additive manufacturing processes. The additions of Arcam AB and SLM Solutions Group AG for a total of $1.4 billion bring advanced 3D printing capabilities under the umbrella of GE Aviation but will be applied in production processes across GE as well as its customers. GE expects to grow the new additive business to $1 billion by 2020.
“Additive manufacturing is a key part of GE’s evolution into a digital industrial company. We are creating a more productive world with our innovative world-class machines, materials and software. We are poised to not only benefit from this movement as a customer, but spearhead it as a leading supplier,” said Jeff Immelt, chairman and CEO of GE. “Additive manufacturing will drive new levels of productivity for GE, our customers, including a wide array of additive manufacturing customers, and for the industrial world.”
Arcam AB, based in Mölndal, Sweden, invented the electron beam melting machine for metal-based additive manufacturing, and also produces advanced metal powders. Its customers are in the aerospace and healthcare industries. Arcam generated $68 million in revenues in 2015 with approximately 285 employees.
SLM Solutions Group, based in Lübeck, Germany, produces laser machines for metal-based additive manufacturing with customers in the aerospace, energy, healthcare, and automotive industries. SLM generated $74 million in revenues in 2015 with 260 employees.
GE will maintain the headquarters locations and key operating locations of Arcam and SLM, as well as retain their management teams and employees.