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Sale of GE's Appliance Park Leads to Unknowns for Workers and Louisville

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As the dust settles on Electrolux's purchase of General Electric's appliance business, Louisville Mayor Greg Fischer is encouraging the 6,000 employees at GE’s local Appliance Park to work hard and “show off.”“The best thing people in Louisville can do right now is put their heads down and work really hard, increase their productivity and quality rates if that is possible,” Fischer said Monday at an impromptu meeting with media outside of Metro Hall.GE officials announcedearlier in the day that Swedish company Electrolux is buying GE's Louisville-based appliance business for $3.3 billion, a deal that had been rumored for months.The deal encompasses the entire GE Appliances business, which includes some 12,000 employees.  About half of those employees work at a 900-acre manufacturing space in south Jefferson County.  When major mergers and acquisitions like this happen, Fischer said, it is normal for people to feel "a little anxious.""It is also a time that people need to be focused on what they are doing and making sure they are increasing quality and productivity and usually, if they do that, a good future takes care of itself," he said.Steve Gohmann, an economics professor at the University of Louisville, said it is difficult to predict what a major company like Electrolux plans to do with manufacturing departments following a major merger, but layoffs could be a part of the settling in process.“Oftentimes, when firms purchase another firm they get rid of redundant employees, such as upper level management or maybe accounting,” Gohmann said. As for other employees, such as those working on the production floor, their future depends on the strategy Electrolux has for moving forward, Gohmann said.“Do they want to still produce here or not, that depends on their strategy,” he said.  “Do they just want the GE name, or do they want the GE name and the appliances they make here at Appliance Park.”Fischer said he was unsure what Electrolux plans to do with Louisville’s Appliance Park.  He said he had been in contact with the company.“Last night I discussed the deal with some Electrolux executives,” Fischer said.  “And let them know that we want to put our best foot forward as a community and a state to grow their presence here.”If Electrolux decides to move away from Louisville, the large scale layoffs that will follow will be devastating to Louisville’s economy, Gohmann said.He added that the city’s current economic structure would make replacing thousands of jobs with moderate to high pay very troublesome.“In the Louisville community, with the city tax of 3 percent and the potential of raising the minimum wage, these are all things that make it difficult for employers to come into Louisville,” he said.  “It might make it more difficult for more jobs to open up.”Fischer said the move to acquire GE’s appliance wing, which accounted for $5.7 billion of the company’s total revenue last year, comes at a time when Electrolux is looking to boost its North American footprint.“Electrolux is not buying GE to tear them apart,” Fischer said. With the addition of GE appliances, Electrolux will challenge Whirlpool as the major appliance manufacturer in the United States.  Whirlpool had revenue of just more than $18 billion in 2013.  Electrolux posted revenue in 2013 of just more than $15 billion.General Electric, since 2004, has awarded nearly $35 million to Jefferson County Public Schools for math and science programs and volunteered more than 5,000 hours of employee time.Correction: Steve Gohmann's name was misspelled in an earlier version of this story.

Jacob Ryan joined LPM in 2014. Ryan is originally from Eddyville, Kentucky. Email Jacob at jryan@lpm.org.