Business

New LEDs power GE's growth

East Flat Rock plant manager Paul Morse, Lightning Solutions GM Jaime Irick and operations director Bob Petersen.

By Bill Moss, Published: June 3, 2012

EAST FLAT ROCK — It's rare to win in Las Vegas. General Electric did, and because it did the company's Lighting Solutions plant in East Flat Rock is in the midst of the most positive trajectory it has experienced since the 1970s.

More than a hundred people laid off during a restructuring in 2008 have been rehired and the new LED streetlight made here is expected to sell across the U.S. because of its brighter illumination, longer life and lower energy and maintenance costs.
In an exclusive interview last week with the Hendersonville Lightning, the East Flat Rock plant manager and senior managers from GE Lighting headquarters in Ohio talked about the strides the factory here has made and the positive outlook they project for the plant.
Plant manager Paul Morse has especially appreciated the turnaround. Morse presided over the layoffs of GE personnel, many of them longtime loyal workers, four years ago.
"All of those people are back," he said. "I had the headline of the Times-News put up in my office. I finally took down when everybody was back."
Morse and his team committed the plant to world competitiveness through sales, productivity and speed. Now the plant is adding workers. An official with a staffing company in Asheville said last week the plant expects to have factory openings in June.
The growth, company officials say, is all muscle. Gone is talk of layoffs and gloom. The buzz, both at the corporate level and on the factory floor where workers assemble the Evolve LED streetlights, is about the lighting business transformation and its bright future. (See sidebar on Page XXX.)
The company won a contract to replace 35,000 old-technology streetlights with new ones made here.
"Every two to three days we're shipping a truckload to Las Vegas," said Bob Petersen, director of operations for GE Lighting Solutions.
Jaime A. Irick, general manager of GE Lighting North America, likes to reach back to the incandescent light and Thomas Edison when he talks about the company and its electric lighting products.
"GE discovered the first visible LED light in 1962, and today we have one of the broadest product offerings in the world," said Irick, who during a breakfast interview at Orr's Family Restaurant ordered scrambled eggs and fried bologna like his grandmother used to make. "So our customers really look to Paul and his team to be trusted advisers as they navigate this lighting revolution. The reason we've won a lot of these big deals recently is customers value that expertise and they value the fact that GE's going to be able give them terrific insight into things like ROI, light quality, how they should make these decisions."

Ship times much quicker
The sales and technology worked in Las Vegas, where the company beat four others in a demonstration that showcased the Evolve light's value. The next job was making factory output faster.
"The main thing we really changed is the way we think about manufacturing production," Petersen said. "We're looking through the eyes of the customer and we've really started to apply lean manufacturing concepts." The plant had used 20 days from taking an order to loading a truck. "Now the average time from order to ship is six days and our on-time shipping is in excess of 95 percent," he said.
During their site visit last week, the senior managers checked on the progress of the production changes, talked with plant workers and listened to ideas.
"There hasn't been this much energy in the plant since the '70s (when highway construction created a boom in roadway lighting). People are really excited," Morse said. "When we get our senior leadership here, we're proud of the progress we've made. We ask for help where we need it to continue to make progress. It's a very positive experience for the whole team when they come to visit. We're winning. Winning's fun."

Industrial arm paces growth
Last month GE reported first quarter earnings that narrowly beat Wall Street projections. It still had challenges in its finance division and in some sectors tied to the troubled European economy. But the industrial business showed evidence of solid growth. While revenue for the company as a whole fell 8 percent from the year-ago quarter, to $35.2 billion, revenue in GE's industrial side grew by 14 percent.
"Everything we saw supports our expectation of double-digit earnings growth for both the industrial business and GE Capital," said Jeffrey R. Immelt, the CEO.
If the Fed gives GE's finance arm the green light to send a share of its earnings to the parent company, GE could "increase dividends to shareholders, buy back shares and perhaps make a few small, niche acquisitions," the New York Times said.
"I don't want to do a big deal," Immelt said. "We've got big backlogs of orders. Our emphasis is going to be on execution."
That execution takes place in East Flat Rock. The plant's renewed prosperity is getting it more attention from Cleveland, the lighting division's headquarters.
Maryrose Sylvester, a one-time plant manager here who is now CEO of GE Lighting, will visit the plant next week, her first senior leadership trip back to the factory she once led.
When GE says that public street lighting is a growth market, it's got impressive figures to back it up. Of some 50 million streetlights in America and less than 1 percent have been switched from mercury vapor and high-pressure sodium to LED.
Asked about the plant's latest outdoor lighting triumph, Morse said, "I'm a sports guy so I'm always happy when the Super Bowl and the World Series both are being played under GE lights. That happens several times over the course of a decade."
Irick, the team leader on the site visit last week, sounded more focused on utility departments and city engineers across America.
"We don't chase high profile," he said. "With the municipalities and the utilities, the departments of transportation, those are our core customers for street lighting. We spend all our time trying to serve them, show them how they can save money with the new lighting, showing them value in the new technology.
"The whole value proposition around LEDs is very long life with no maintenance. So when you're talking about greater than six times the light and half the energy, that's a compelling story for us to tell."
It's a comfort for the workers on the factory floor that the story behind the story is taking place in East Flat Rock.