NEW YORK (AP) - General Electric, a household name for more than a century in part for making households easier to run, is leaving the home.
The company is selling the division that invented the toaster in 1905 and now sells refrigerators, stoves and laundry machines. GE instead wants to focus on building industrial machines such as aircraft engines, locomotives, gas-fired turbines and medical imaging equipment - which are much bigger and more complex than washers, and more profitable.
"They are no longer going to be a consumer company," says Andrew Inkpen, a professor at the Thunderbird School of Global Management who studies GE.
GE, based in Fairfield, Connecticut, Monday announced the sale of its appliance division to the Swedish appliance maker Electrolux for $3.3 billion. Electrolux will still sell appliances under the GE brand in attempt to leverage the company's long history.
GE has sold devices to people for its entire 122-year history, starting with the light bulb, which was invented by company founder Thomas Edison. But in the first half of this year, GE's appliances and lighting division accounted for just 8 percent of the company's industrial revenues and 2 percent of its profit.
GE hopes that selling big, complex products such as power generators and oil and gas equipment to other businesses will boost profit and once again endear it to investors.
GE is the only remaining member of the first Dow Jones Industrial Average, calculated in 1896. As recently as 2004 it had the world's largest market value. But since then, GE has frustrated shareholders. Its shares are 22 percent below where they were a decade ago. The S&P 500 is up 79 percent over the same period.
GE got into businesses such as media or insurance because they promised new sources of profit, not because of any competitive advantage the company possessed. Investors found the structure unwieldy, and put their money elsewhere.
Heavy exposure to commercial and residential mortgages through its finance division threatened GE's existence during the financial crisis. It needed funds from a government liquidity program and a $3 billion investment from Warren Buffet to shore up its finances.
Now GE wants to be only in businesses that can benefit from the company's global scale, experience with complex projects, and technical ability.