More than 140 years after Thomas Edison and his assistants carried out their first successful experiments with a carbon filament lamp in a vacuum, the company he co-founded – General Electric – sold his lighting business.
Analysts said Wednesday’s sale was not a surprise. G.E. had been trying to outsource its lighting division for several years as it focused on more profitable areas such as renewable energy and health technology.
“From the point of view of people who call the lightbulb a symbol of modern inventions and innovations, the fact that GE, which has been at the forefront of this industry for many years, is saddened.” said Paul Israel, director and general editor of Thomas A. Edison Papers at Rutgers University.
Major League Baseball played his first night game under G.E. Floodlight in 1935. Nick Holonyak, an engineer, developed the first visible light-emitting diode (LED) on a G.E. Laboratory in 1962. And the company’s connection to the light bulb was captured in its ubiquitous television commercials that promised, “We’re bringing good things to life.”
Nevertheless, G.E. Joseph L. Bower, emeritus professor at Harvard Business School, said he turned away from this part of his business to focus on high technology. In this sense, the sale is symbolically significant, but does not signal a significant change in the corporate strategy.
“Iconic is the right word because it is not a fundamental change for G.E.,” he said. “I suspect it could have happened a long time ago because G.E. looked at his portfolio, his consumer goods businesses like toasters and things like that were not good, profitable businesses. “
G.E. sold its lighting business to Savant Systems Inc., a Massachusetts-based home automation company. G.E. did not announce the terms, but said the lighting department’s headquarters would remain in Cleveland and the more than 700 employees would switch to Savant after the sale was completed. The deal also included a license agreement that enables Savant to acquire the G.E. Brand.
The transaction was a completion of the opening chapters of G.E. in the second industrial revolution. The company stems from Edison’s experiments in his laboratory in Menlo Park, New Jersey, which made him the first recipient of a U.S. patent for a light bulb in 1880. It was one of 1,093 U.S. patents Edison received, more than any other inventor in American history.
In 1892, Edison founded the Edison General Electric Company to market its products. It merged with a competitor, the Thomson-Houston Electric Company, to form a new company, the General Electric Company.
Edison would not be part of the company for long. In 1893, he sold his stake in General Electric for $ 1.5 million or more than $ 430 million. according to G.E.
Over the next century, the company would become a bell tower for the American economy, producing jet engines, locomotives, gas turbines – and many, many light bulbs.
G.E. Lighting was at the forefront of all major lighting innovations, from the beginning of incandescent lamps to the first energy-saving fluorescent lamp that was introduced in 1974.
However, the business started to dwindle with the spread of LEDs, which need to be replaced less often because they last longer and are more energy efficient than traditional incandescent lamps. Industry data showed that LEDs outperformed all other lamp types for the first time in 2017.
G.E., which had sales of $ 95 billion last year, has not announced in several years what part of its business is related to lighting. However, Professor Bower said that light bulbs “are not really important for a very large company”.
H. Lawrence Culp Jr., Chairman and CEO of G.E. 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 innovation legacy, while at G.E. We will continue to develop the infrastructure technologies that are central to our company and fall back on the roots of our founder Thomas Edison, ”he said.