No Surprise

By Susan Bloom

Earlier this month, the lighting industry received confirmation of news that had long been rumored—that GE Lighting had officially been put up for sale. The sale, which will reportedly excludes the company's 'Current' lighting division (a provider of digital solutions for the commercial/industrial segment), is still in early stages and a buyer has yet to be identified.

The market for conventional lighting technology has experienced a serial decline over the past 10 plus years, and GE's lighting business reportedly made up less than 2 percent of GE's total revenue last year. Nonetheless, the impending sale of GE Lighting marks a bittersweet milestone in an industry long-dominated by the over century-old company, whose lineage traces back to Thomas Edison's groundbreaking innovations in the field of lighting.  Following, tED magazine invited a number of distributors nationwide to share their reactions to the news and the significance of the impending sale to the industry.

No Surprise
“With the drastic changes going on in the lighting industry, the announcement doesn't surprise me at all,” confirmed a western distributor.  “Of the 'Big Three,' GE was probably third and they were too reactionary and slow to keep up in a sector that's changed so quickly.”

“We weren't surprised to hear the news about GE Lighting,” agreed a southern distributor.  “Their Industrial Solutions division has been up for sale for the past few months and with Jeffrey Immelt stepping down as CEO a few days ago, there's clearly some major restructuring going on at GE and a lack of commitment on GE's part to further invest in the gear and lighting entities.”

“The news doesn't come as a tremendous surprise to us either,” concurred a midwestern distributor.  “The traditional lamp and ballast business has been dropping like a rock and there's not enough business in the U.S. to remain profitable.”  Considering the iconic position that GE has occupied in the lighting industry for generations, however, “their exit might be more of a shock from a culture and branding standpoint,” he said.

“Not Going Anywhere”
“The sale of GE Lighting didn't come as a surprise to us and I think that even if they find a buyer, there will be little, if any, impact on our business,” confirmed a central-based distributor. “At this point, all of our GE lamp business flows through Current, which I don't believe is impacted by this decision, and, to our benefit, GE continues to invest and innovate in the LED lamp market.”

Though the southern distributor conceded that the once-dominant GE Lighting had since dropped to a 'top five' player in a market populated by competitors from all over the world, he feels that “the people at GE Lighting are committed to the business and GE Lighting is not going away.  GE Lighting is important to us and we'll continue to work with them under new ownership.”

“As we've heard it, Current will continue to be in the LED and fixture business and distributors will still retain the right to source lamps from the new owner,” the midwestern distributor shared.

A Competitive Playing Field
All distributor interviewees agreed that the lighting market has become and will remain extremely competitive.  According to the western distributor, “there are many players, including many non-traditional players, in both manufacturing and distribution, and I think that there's some urgency on the part of manufacturers to grab share as quickly as possible to make sure R&D and retooling costs are justified.”

The midwestern distributor agreed.  With increasing market emphasis on digital lighting and controls in tandem with the growing Internet of Things, “there's a huge rush to get into the solutions business today and all players will have a solution of some sort,” he said.  “The next big battleground will be who can come up with the best solution first.”

The southern distributor noted that opportunities in solutions do indeed abound – beyond the ability of major players to fill them.  Based on reduced barriers to entry in the new lighting arena, “what will likely fill the gap will be non-patented, non-UL fixture lines,” the southern distributor said, noting that GE may lose market share in the short-term.

Words of Wisdom
Overall, none of our interviewees was overly worried about the fallout from GE Lighting's announcement.  “We're not concerned,” the midwestern distributor confirmed.  “They've retained their LED lamp business and that's what we're shifting to anyway.  The transition to LED is happening faster than people predicted it would 4-5 years ago and it will continue whether GE remains in the business or not.”

The western distributor concurred that GE Lighting's impending sale shouldn't create upheaval at his firm.  “Our channel/supplier strategy in the digital lighting market has been to partner with top-tier lines that have a proven history and track record with our business. The relationships we've cultivated with these suppliers over the years is invaluable in terms of customer support and problem resolution,” he said.  “On the distributor side, however, I think we all realize that getting some lighting specialists on board will be necessary to keep up with changes in controls and lighting technology; we have to keep a close eye on all of the emerging smaller players to see where the innovators are coming from.”  At the same time, he said, “there are other sources out there that can supply our fluorescent and HID lamps and ballasts, but we would prefer that someone buy GE so that we can avoid the need to load a whole new set of SKUs!”

A Fate Unknown
Until an ultimate buyer is confirmed and more details are announced, though, GE Lighting's legacy remains up in the air.  Among other major contributions to the industry, shared the central distributor, “we hope that GE's NELA Park facility remains intact because it serves as a valuable training resource and innovation center.”

For the southern distributor, the as-yet-unknown human toll of GE Lighting's announcement stands as the most concerning aspect of the situation.  “There will be life after GE Lighting, and this is just another stone in their road until they figure out where they're going to land,” he said.  “But we do worry about the future of the GE Lighting team—we've had long-term relationships with them and they're good people.”

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Bloom is a 25-year veteran of the lighting and electrical products industry. Reach her at susan.bloom.chester@gmail.com.