GE HAS A LEAN, MEAN WASHING MACHINE
It is GE's first fundamentally new washing machine in 42 years, and it's a beaut. The Maxus, $100 million in the making, boasts a larger tub, 40% fewer parts, and a suspension that cuts down on noise and vibration, keeping loads balanced. This is the sort of stuff that turns pros' heads: "If someone comes in and just wants a washer, all 20 of my salesmen will walk them over to the GE," says Chuck Oswald, president of Appliance Center in Maumee, Ohio.
The Maxus line, which sells for $400 to $700, is General Electric Co.'s attempt to escape laundry-room mediocrity. For years, its washers have been stuck a distant second or third behind those from Whirlpool Corp. (chart). GE ran 40 market-research studies and collected recommendations from 200 service technicians to figure out what it was doing wrong. This year, it will spend an estimated $10 million on clever feature-oriented advertising and marketing for its new washer and a redesigned dryer--the biggest launch ever for GE Appliances.
DEEP POCKETS. The splash is paying off, with orders from retailers far exceeding GE's expectations. "For the first time in a long time, GE doesn't have to take a backseat to anybody in the laundry business," says J. Con Maloney, chairman of Cowboy Maloney's Electric City, an 11-store chain based in Jackson, Miss. Deep-pocketed GE, the leader in refrigerators, dishwashers, and electric ranges, may finally be set to pick up market share in washers.
But there's a problem: GE can't get enough machines out the factory door. Maxus floor samples were delayed by a month, and GE acknowledges that it fell three weeks behind its production schedule last summer. The biggest delays came from component suppliers, though GE had to shut down its own lines to fix a noise problem.
Tom Tiller, GE Appliances' manufacturing and purchasing chief, says most of its production problems were simply ramp-up issues. Now, GE is making more of the new models than it did of the old. "The baby is out," he says. "We're still in a little bit of pain from the birthing process, but we're getting there." Even so, say parts suppliers, GE's two Louisville assembly lines are producing just 30,000 washers a week, below the 32,500 it had expected by now. Retailers figure it will be January before GE catches up to demand. "It's a problem," says Jim Copitzky, general manager of the Home Appliances Div. of Sears, Roebuck & Co.
ENVIRONMENT. GE is honoring its supply agreements with Sears, and Copitzky and other buyers expect the shortage to ease. In fact, a third production line will open in the first half of next year, says Norman T. Mitchell, who heads the union local at Louisville. In the meantime, though, GE risks losing its brief marketing advantage. While rivals sniff that Maxus is simply catching up to what they already sell, they're pushing ahead with their own new products. Whirlpool is working on a secret technology it claims will provide much higher energy efficiency, among other things. Maytag Corp. and Frigidaire Co., too, are working on more efficient washers.
One crucial factor has turned in GE's favor. Last spring, it appeared that stringent new environmental standards, based on a more efficient technology widely used in Europe, might be implemented in the U.S. by 2000. Such regulations, which Whirlpool had favored because of its investment in the technology, could have made the Maxus obsolete. But GE, with others, convinced Congress to propose a one-year moratorium on such standards.
Now, GE's marketers must pick up where the lobbyists left off. To double its share of the laundry business, as outsiders suggest it hopes to do, GE must break into Whirlpool's monopoly as supplier of Sears' Kenmore brand washers, which account for close to 30% of the market. So far, Copitzky says, GE hasn't made a substantive proposal.
But most important, GE has to overcome its supply problems. Retailers may love the new machine, but they can't sell what they don't have. Give consumers a few more Maxuses, and they may be swayed, too.By Zachary Schiller in Cleveland