When it rains, it pours: GE Lighting launches a raft of cost-saving moves

March 11, 2022
Its new owner Savant will close Ohio factories, sell the historic Cleveland HQ, and is laying off employees in various countries. It has a new boss, too. IoT waters still look choppy.

GE Lighting has begun a flurry of cost-saving maneuvers as it shuts down two Ohio plants, sells off its historic Nela Park headquarters building where it will remain as a tenant, and eliminates jobs in the U.S., Canada, and China — all a few weeks after quietly naming a new boss.

The company told LEDs Magazine that it intends to close its Bucyrus and Logan factories, although the decision is not yet final, saying it would likely happen by Sept. 30. The locations have been making fluorescent and halogen bulbs; Bucyrus had also made LED lamps until March of last year.

Meanwhile, GE has agreed to sell the 1 million-ft2, 138-acre Nela Park to an affiliate of Milwaukee real estate company Phoenix Investors. GE expects to close the deal this month, staying on as one of the tenants. The parties did not reveal the price. Phoenix also owns the land and buildings at Bucyrus and Logan.

Reports of the closures, job losses, and property transaction first circulated in Ohio media outlets this week, and GE has now confirmed them for LEDs.

They come as GE Lighting reshapes itself under new owner, Savant Systems, as a provider of internet-connected LED lighting to upmarket homes. Privately-held Savant acquired GE Lighting from GE in May 2020, renaming it in full as GE Lighting, a Savant Company and intensifying its focus on connectivity.

Based in Hyannis, MA, Savant is a controls and software company that describes itself as “the home automation brand of choice for the worlds most luxurious homes, castles, and even yachts.” It sells fancy and connected controls for lighting, heating, cooling, home cinema, music, swimming pools, showers, window blinds, and other things.

Conventional lighting still makes money

GE hasn’t yet dropped fluorescent and halogen bulbs from the mix that Savant picked up when it bought the company, but it is heading in that direction. GE lists hundreds of products on its website including bulbs and strips as well as controls and switches but, it does not bother to include the conventional bulbs, even though they are available.

“We sell them today and we will continue to do so until our customers no longer want them and/or the government tells us were no longer allowed to sell them,” the spokesperson told LEDs.

The Bucyrus and Logan shutterings relate directly to the steep decline in demand for those goods.

“Linear fluorescent lamps continue to experience a double-digit decline in demand year over year for the last five years across the lighting industry,” the spokesperson said. “Energy-efficient halogen has already been regulated off the market by California and Nevada, and proposed [Department of Energy] regulation will soon eliminate its manufacture and sales across the U.S.”

The spokesperson noted GE is negotiating with unions at the plants. Should the factories close, job losses would total 175 in Bucyrus and 50 in Logan.

GE Lighting’s stronger-then-ever emphasis on LEDs fits well with Savant’s controls and automation mission, as LEDs are a good match with digital controls that can alter on/off, brightness, color, and color temperature settings — all part of the IoT zeitgeist driving the lighting industry.

Not only that, but Savant favors LEDs for other reasons as well, selling them as standalone units, not always as connected ones.

“Why LED?” GE asks on its website, where it answers its own question. “Compared to CFL, incandescent, and halogen bulbs, LEDs are longer lasting, more energy efficient, and reach full brightness instantly.”

The company introduced eleven new LED lamps two months ago at the CES consumer electronics show in Las Vegas. The bulbs are part of GE’s Cync line of smart products, rebranded from what GE Lighting under GE had called “C by GE.”

U.S. manufacturing unsupportable  

Up until a year ago, GE had made LED lamps at Bucyrus, but that became untenable.

Due to legislation and components that can only be sourced from overseas, nearly 100% of LEDs on the market are not manufactured in the U.S.,” a GE Lighting spokesperson told the Bucyrus Telegraph-Forum in March 2021. “In 2019, after another lighting company exited LED production from the U.S., we undertook the bold and challenging task of trying to bring jobs from China to the U.S. Less than two years ago we began to assemble A19 LED bulbs with a planned target production cost that was sustainable in the market. We did everything within our power to make that happen."

Indeed, soon after the May 2020 acquisition, GE indicated to LEDs Magazine that it would continue to make LEDs at the Bucyrus plant, which it described at the time as “the only LED manufacturing facility in the U.S.,” noting that it “features high-speed, fully automated processes.”

Those processes have now wound down.

“Unfortunately, we suffered the same fate as others before us,” the GE Lighting spokesperson told the Telegraph-Forum last year. “We factored all potential cost savings ideas into our financial analysis and still the economics of our A19 LED assembly in Bucyrus proved to be unsustainable. The decision to eliminate recently created jobs was not a decision we came to quickly or took lightly.”

According to the news report, the 2021 cutback affected 81 employees, some of whom found new jobs before the closing. It came despite efforts by retail giant Walmart to help keep Bucyrus’ LED line open by spending more on US-made goods, the article stated.

With the latest factory wind-down, GE will have moved to an outsourced-only production scheme.

“Like other companies, we do source from Europe and Asia,” the spokesperson said. “Every lighting company manufactures or sources all LED from overseas. We do not have any plants overseas.”

GE Lighting also now has fewer employees overseas in general than it did.

“To reduce organizational complexity and align it to a company of our current size we eliminated certain roles in the U.S., Canada, and China,” the spokesperson told LEDs. He declined to elaborate.

Executive promotion

The pared-down GE Lighting, a Savant Company is now overseen by Kathy Sterio, who the company named president in February, promoting her from chief marketing officer. She replaces former president and CEO Bill Lacey, who left in early February and is now vice president of finance at Amazon, according to his LinkedIn page. Sterio reports to Savant Systems CEO Bob Madonna. 

GE Lighting will continue to call Nela Park its headquarters site — albeit as a tenant rather than as an owner. Nela Park has long been associated with the GE name. General Electric Corp. had housed its lighting unit at the Georgian Revival, university-campus–style facility since it was built in 1913, after GE had absorbed the National Electric Lamp Association (NELA). It has been home to many lighting discoveries and is regarded by some as the world’s first industrial research park.

Another modern lighting company with a GE legacy and new owners — GE Current — will now move from Nela Park to new facilities in Beachwood, a Cleveland suburb. Current has been a tenant of GE Lighting at Nela Park.

Nela Park’s owner-to-be, Phoenix Investors, describes its core business as “the revitalization of former manufacturing facilities throughout the United States.”

Last September, it acquired the Huron Campus in Endicott, NY, the birthplace of IBM but a facility that had outlived its IBM glory days and which is home to many different corporate tenants.

MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).

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