GE Lighting Looks to Energize Product Mix

May 24, 2002
As Matt Espe completes his second year as president and CEO of GE Lighting, he admits that his timing could have been better to take over the helm of

As Matt Espe completes his second year as president and CEO of GE Lighting, he admits that his timing could have been better to take over the helm of the largest lighting manufacturer in North America in May 2000.

“You have to go back 20 years to see this kind of softness,” said Espe, a 21-year GE veteran who came to GE Lighting after senior international management posts at GE Plastics and GE Supply. “It has been unprecedented.”

Despite the slowdown, Espe stands to have a major impact on a lighting market where new technologies like white LED lighting systems may soon reshape the mix of lighting products that distributors sell, and online “digital” training and design programs offer them, designers, contractors and homeowners unprecedented amounts of information at their fingertips.

In an exclusive interview for Electrical Marketing newsletter and Electrical Wholesaling magazine, Espe said he has learned that when times get tough, it's time to go back to basics. For GE Lighting, which had annual sales of $2.55 billion in 2001 (a 6 percent decline from 2000), that has meant committing to the Six Sigma process to wring out inefficiencies in their management, sales, marketing and production processes, listening to customers and using the feedback from these exercises to reinvigorate the company and its product line.

New product development was a key concern at a recent distributor advisory council, where distributors emphasized the need for GE to energize its product line.

GE Lighting is in the midst of its largest product launch ever, with the introduction of the Reveal lamp for residential applications. The lamp is designed to replace the yellowish light produced by zillions of standard incandescent lamps with a white, crisp light and is being marketed with a massive advertising campaign. On the commercial/industrial side, the company has focused on improving the efficacy, efficiency and color of its fluorescent and halogen lines.

Because of the years that he spent at GE Supply in sales and management, Espe has always had a special affinity for the concerns of electrical distributors. “I spent 13 years in that business, and I have a lot of empathy for inside salespeople and outside salespeople,” he said. “We are always soliciting advice from our distributors. Just like anything else, it starts with listening to the voice of the customer.”

“Digitizing” sales tools for customers is also a key driver for the company — and a key concern of GE Lighting's distributor advisory council, he said. Distributors there asked GE Lighting to continue adding digital sales tool to its online arsenal. Along with GELA (GE Lighting Auditor), an online auditing tools that salespeople can use to audit a customer's existing lighting system and offer cost-effective alternatives and a virtual design tool where users can see how various lamp types will light a room, GE Lighting offers distributors a sales call wizard. This tool helps salespeople prepare for a call, offers ideas and presentation material for what to discuss on the call and contact templates that they can use to follow up with a customer after the call.

Another major initiative for GE Lighting is building its presence in the still-hot education market. The company has launched a program that helps teachers and students use GELA to measure a school's energy usage and calculate potential savings. To kick off the program last fall, GE Lighting retrofitted the lighting system of the Vanguard Middle School in the Compton School District of Los Angeles. By changing the lighting from standard linear fluorescent T12s to new energy-efficient T8 products, the school will save more than $75,000 in energy over the life of the product.

Down the road, Espe said LED lighting would account for a huge chunk of the company's overall sales. He believes in the next seven-to-eight years, LED lighting could account for 20 percent of GE Lighting's business. The GELCore business unit of GE Lighting recently announced the development of a new patent-pending phosphor that will help the company offer white light LEDs.

Espe said white-light LEDs are the “holy grail” of the lighting world because of their potential to replace traditional lamps that now produce white light for virtually any application in the residential, business and industrial markets. LEDs offer numerous advantages over conventional lighting, including a life-span of more than 100,000 hours, compact design, and dramatically reduced energy consumption.