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article imageWhy big business is getting cold feet with big appliances

By Kev Hedges     Sep 24, 2014 in Business
Big business seems to be getting cold feet with refrigerators and other large domestic appliances. Nobody, it would seem, is that keen to sell us fridges, cookers and other white goods any longer.
German manufacturer and household name in appliances, Siemens, is offloading its 50 percent stake in the white goods business with Bosch. On Thursday, another engineering giant, General Electric, sold off its appliance business to Electrolux for $3.3 billion.
Fridge designers will still tell you that to get that appliance to be a market leader is hard enough, but selling white goods is still very big business, so what is behind Siemens and General Electric's decision to have a spring clean?
It would seem GE and Siemens are more interested in ditching the appliances in favour of building MRI machinery, aviation engines, power plant machines and locomotives for the rail industry. Moreover, getting into these big-boy businesses is extremely hard and competitive. But the rewards are high; governments and multinationals tend to award contracts which are layered for several years and there are big rewards for these engineering companies. However, you and me who may just want to buy some hair-straighteners, a blow dryer or a microwave oven are a far more fickle species when it comes to doing business.
The recent world financial credit crunch meant students and graduates are slow to move away from the bank of Mom and Dad and get their own home, washing machine, fridge and freezer. Appliance sales do rely on the state of the economy.
The 2007 housing crisis in the US really did not help and sales of appliances have dipped about 24 percent as a result. Real estate property prices have now recovered to the values we saw back in 2007 at least, but the sales of appliances are still a long way from recovery.
More about Siemens, Fridges, refrigerators, General electric, Electrolux
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