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G.E., Which Traces Its Roots to Thomas Edison, Sells Its Lighting Business
The transaction represented a symbolic closing to G.E.’s opening chapters in the second Industrial Revolution.
More than 140 years after Thomas Edison and his assistants conducted their first successful experiments with a carbon-filament lamp in a vacuum, the company he helped to found — General Electric — has sold its lighting business.
Analysts said the sale, announced Wednesday, was not a surprise. G.E. had sought to offload its lighting division for several years, as it focused on more profitable areas such as renewable energy and health care technology.
But in the annals of American corporate culture, where G.E. and the light bulb have long been synonymous, the uncoupling struck some as a pivotal moment, as if Kellogg had jettisoned its cornflakes business or Ford had stopped making cars.
“From the standpoint of people who associate the light bulb as the symbol of modern invention and innovation, there’s a kind of sadness to the fact that G.E., which for many years was at the forefront of that industry, has moved away from it,” said Paul Israel, director and general editor of the Thomas A. Edison Papers at Rutgers University.
Major League Baseball played its first night game under G.E. floodlights in 1935. Nick Holonyak, an engineer, developed the first visible light-emitting diode, or LED, at a G.E. lab in 1962. And the company’s connection to the light bulb was captured in its ubiquitous television commercials, which promised, “We bring good things to life.”
Still, for years G.E. had been shifting away from that part of its business as it sought to focus on high technology, said Joseph L. Bower, a professor emeritus at Harvard Business School. In that sense, he said, the sale was symbolically significant but did not signal a major shift in the company’s strategy.
“Iconic is the right word because it is not a fundamental change to G.E.,” he said. “I suspect it could have been done a long time ago because, as G.E. looked at its portfolio, its consumer businesses like toasters and things like that weren’t good, profitable businesses.”
G.E. sold its lighting business to Savant Systems Inc., a home automation company based in Massachusetts. G.E. did not disclose the terms, but said the lighting division’s headquarters would remain in Cleveland and its more than 700 employees would transfer to Savant upon completion of the sale. The deal also included a licensing agreement to allow Savant to use the G.E. brand.
The transaction represented a closing to G.E.’s opening chapters in the second Industrial Revolution. The company traces its roots to Edison’s experiments in his laboratory in Menlo Park, N.J., which made him the first recipient of a United States patent for an incandescent lamp in 1880. It was one of 1,093 U.S. patents Edison received, more than any other inventor in American history.
In 1892, the company Edison had established to market his products, the Edison General Electric Company, merged with a competitor, the Thomson-Houston Electric Company, to form a new firm, the General Electric Company.
Edison would not remain part of the company for long. In 1893, he sold his stake in General Electric for a reported $1.5 million, or more than $430 million in today’s dollars, according to G.E.
Over the next century, the company would become a bellwether of the American economy, turning out jet engines, locomotives, gas turbines — and lots and lots of light bulbs.
For nearly 130 years, G.E. Lighting was at the forefront of every major lighting innovation, from the dawn of incandescent bulbs to the first energy-saving fluorescent bulb, introduced in 1974, according to the company.
But the business began to dwindle with the proliferation of LEDs, which need to be replaced less frequently because they are longer-lasting and more energy-efficient than traditional incandescent lights. Industry data showed that LEDs outsold all other types of bulbs for the first time in 2017.
G.E., which reported $95 billion in revenue last year, has not disclosed for several years what portion of its business comes from lighting. But Professor Bower said light bulbs were “not really significant for a very big, big company.”
H. Lawrence Culp Jr., G.E’s chairman and chief executive, called the sale “another important step in the transformation of G.E. into a more focused industrial company.”
“Together with Savant, G.E. Lighting will continue its legacy of innovation, while we at G.E. will continue to advance the infrastructure technologies that are core to our company and draw on the roots of our founder, Thomas Edison,” he said.
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