Hitachi president rules out buying GE's appliances unit
26 May 2008
Japan's largest electronics group Hitachi Ltd today said that it did not plan to buy the appliances division of General Electric, which had, in the wake of unexpectedly poor profit expectations for the year ahead scaled down its earnings guidance and said it would sell-off its appliances division.
It had said in mid-May that the company was considering three possibilities for the unit - a strategic partnership or joint venture; spin off; or the sale of the business. (See: GE confirms options for appliances business)
''GE Appliances has a very strong brand, great distribution, a talented leadership team and for more than 100 years, has been one of the icons associated with GE in the United States,'' GE CEDO Jeffery Immelt had said in a statement. ''However, it remains primarily a US business, meaning its fortunes are tied to the rise and fall of a single market.
According to Hitachi president Kazuo Furukawa the company wanted to focus on its own applainces business, which had been enjoying strong markets, particulalry, in air conditioners.
He told reporters that he wanted to boost the profiatability of Hitachi's hard disk drive business, which has not been profitable since 2002, when it was acquired from IBM for $2 billion, and its flat TV business, which have been hit by sharp price falls in a market dominated by larger rivals such as Samsung Electronics and Sony Corp.
Furukawa said that demand for Flat TV would grow globally, while the company was "still struggling in this market". He said hitachi was keen to turn the operations around.
Last week Videocon waas reported to have been weighing its options for the GE apploiances business (See: Videocon weighs probable bid for GE's appliance business)