General Electric (NYSE: GE ) CEO Jeff Immelt keeps telling us that the megaconglomerate is looking to refine its business model. If you didn't believe him before, maybe he'll get your attention by selling off GE's century-old consumer appliance division.
That operation, started in 1907, is currently the leading supplier of appliances in new housing construction. But in the current real estate downturn, that's not good enough, and Whirlpool (NYSE: WHR ) takes the catbird seat if you include aftermarket sales, too. Combined, GE and Whirlpool accounted for 46% of all American kitchen appliance sales last year; a combination of the two would raise serious antitrust issues.
GE is looking for as much as $8 billion in an auction run by Goldman Sachs (NYSE: GS ) , which removes a lot of small fries from the pool of hopeful buyers. The Wall Street Journal reports that German and Chinese giants of heavy industry could step in and land an instant upgrade to their American ambitions. I'd add Dutch consumer heavy Philips (NYSE: PHG ) to the Journal's short list of candidates, and that's about it.
There really aren't any credible domestic bidders, aside from hedge funds and other pure investment firms, and I'd be surprised if the unit were sold off piecemeal. In short, we're looking at a real possibility of moving this American institution abroad.
Now, GE is sitting on a $15.3 billion cash hoard, so what difference will a few billion more make? I don't see this as a major growth move for GE, but it is a strong statement of the company's willingness to make drastic decisions as it navigates the swirls and eddies of business. That strong stance is worthy of Foolish respect all by itself.