General Electric Co may sell or seek a partner for the unit that makes refrigerators and washers, ending more than a century in an industry that helped make GE a household name, people familiar with the situation said.

GE, the biggest maker of appliances for new US homes, hired Goldman Sachs Group Inc to explore options that include a spinoff or auction, according to one of the people, who declined to be identified by name. A sale may bring as much as $8 billion, the Wall Street Journal reported.

Chief Executive Jeffrey Immelt, who took over from Jack Welch in 2001 and surprised investors with a decline in profit last quarter, has been paring consumer businesses to cope with a slower US economy. The units he's selling don't expand fast enough to help GE reach its goal of 10 percent annual profit growth. Appliances, which like light bulbs are the GE products most familiar to consumers, were just 4.1 percent of 2007 sales.

'Aggressive approach'

"We would positively perceive a more aggressive approach to selling off slow-growth businesses," Robert Schenosky, a New York-based analyst with Jefferies & Co who rates the shares "hold" and doesn't own any, said in an interview.

Prices for some appliances haven't increased in more than half a century. In 1953, an 11-cubic-foot refrigerator was advertised for more than $500. Today, an 18.2-cubic-foot GE model lists for as little as $519 on the NexTag.com shopping site.

Gary Sheffer, a company spokesman, declined to comment on a possible sale. Fairfield, Connecticut-based GE rose to $32.67 at 8:04 pm on Wednesday (local time) in New York, after closing at $32.51 in regular New York Stock Exchange composite trading.

US home foreclosure filings climbed 65 percent in April amid a subprime mortgage crisis. Home prices fell the most in 29 years last quarter, making it tougher for homeowners to refinance loans or borrow more money to buy goods such as refrigerators.

Louisville, Kentucky-based GE Appliances provided about $7.2 billion of GE's $172.7 billion in sales last year and accounted for about 13,000 of 327,000 employees.

"This isn't a piece of business at this point that has got much more incremental opportunity for GE," said Nicholas Heymann, an analyst at Sterne, Agee & Leach Inc in New York, who has a "hold" rating on the stock.

Since unveiling his basic plan to shift out of economically sensitive sectors in December 2002, Immelt has divested more than $75 billion in GE businesses, including the plastics and insurance units, while making more than $50 billion in purchases in faster-growing areas such as water treatment and aviation. Investors and analysts have been asking ever since whether he planned to shed appliances and the light-bulb unit.

In December 2007, Immelt put the US private-label credit card division on the block and is also selling the consumer finance unit in Japan, called Lake.

GE's shares fell 13 percent, the most in two decades, on April 11 after Immelt reported a 12 percent decline in first-quarter earnings and said annual profit would trail his $2.42-a-share target.

Agencies

(China Daily 05/16/2008 page16)