As part of a US $3 billion investment, General Electric Appliances is preparing to transfer production of select home appliances out of China and Mexico.
Last week, GE Appliances announced it would be shifting production of refrigerators, gas ranges and water heaters as part of a plan to expand its U.S. operations in the states of Kentucky, Georgia, Alabama, Tennessee and South Carolina.
ABC News reported that the majority of the company’s production is already located in the U.S. The shift — which will occur over the next five years — allows the company to transfer more work to its domestic plants in keeping with its long-term strategy to “manufacture close to its customers.”
“With lean manufacturing, upskilling our workforce and automation, the math works for manufacturing in the United States,” CEO Kevin Nolan said, adding that the investment is the second-largest in GE Appliance’s history.
Not to be confused with GE Appliances, General Electric will maintain a strategic presence in Mexico. GE has operated in Mexico since 1896 and employs more than 11,000 people directly and approximately 50,000 indirectly (through a network of suppliers and contractors), according to the industry magazine Lider Empresarial.
It has 17 manufacturing plants in Mexico (in the fields of energy, aviation and automotive) as well as one of the world’s largest advanced engineering centers — GE Aerospace Querétaro.
Nolan said GE Appliance’s decision is a reflection of evolving trade dynamics, labor cost considerations and geopolitical factors, including tariffs on foreign goods imposed by U.S. President Donald Trump whose goal is to lure factories back to the U.S.
In a statement, the company said that it will “relocate production of gas ranges from Mexico to a plant in Georgia, while six refrigerator models now made in China will be manufactured at its Alabama plant.”
GE Appliances — which is not a subsidiary of GE — said the investment will be used to modernize its U.S. plants and will create more than 1,000 jobs.
Jonathan Ruiz Torre, a columnist for the newspaper El Financiero, wrote Monday that General Electric had been unhappy with the performance of its appliance operations in Mexico for decades due to low profit margins.
Ruiz Torre said GE sought to dissolve its joint venture with Mabe, a Mexican appliance manufacturer, offering to sell its share of the operation to Mabe. Instead, the Chinese firm Haier Smart Home Co bought out GE Appliances and has been selling products in Mexico under the GE Profile brand.
In June, GE Appliances announced it would invest US $490 million to shift production of washing machines to the U.S. from China, saying it was seeking to “rebalance its factory footprint in the face of extreme trade tensions between the world’s two largest economies.”
GE Appliances said that once its plan is fully implemented, it will have invested a total of US $6.5 billion in U.S. manufacturing and distribution infrastructure since its acquisition by Haier in 2016.
With reports from El Financiero, Mexico Now, ABC News and El CEO
