Molly Ayala
In 2020, a viral Facebook meme sparked conversations around the alleged sale of General Electric to China for $5.4 billion. However, fact-checking revealed that the American multinational conglomerate company, General Electric Company (GE), did not sell its entirety to China. Instead, in 2016, GE sold its appliances division, GE Appliances, to Qingdao Haier Co., Ltd., a Chinese company based in Shanghai, for the aforementioned sum.
| Characteristics | Values |
|---|---|
| Date of the claim | Late 2020 and early 2021 |
| Source of the claim | A Facebook meme |
| Date of the acquisition | June 6, 2016 |
| Acquirer | Qingdao Haier Co., Ltd. (SHA: 600690; “Qingdao Haier”) |
| Acquirer's ownership | 41% owned by Haier Group (“Haier”) |
| Acquirer's nature of business | World's leading home appliance provider |
| Acquirer's global revenues in 2015 | US$30.3 billion |
| Acquirer's profits in 2015 | US$2.89 billion |
| Division acquired | GE Appliances |
| Division's nature of business | Home appliances |
| Division's products | Refrigerators, freezers, cooking products, dishwashers, washers, dryers, air conditioners, water filtration systems, and water heaters |
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What You'll Learn
- General Electric sold its appliance division to Haier in 2016
- A viral Facebook meme sparked rumours of the sale
- There is no evidence of a deal to sell General Electric to a Chinese company
- The sale price of GE Appliances was $5.4 billion
- GEA has grown its market share every quarter since being acquired by Haier
General Electric sold its appliance division to Haier in 2016
In 2021, a viral Facebook meme claimed that General Electric (GE)—an American multinational conglomerate company founded in 1892—was being sold to a Chinese company for $5.4 billion. The post, published by a user named Hal Downing, asked, "Americans, are you concerned yet???". However, this claim is false. While it is true that GE sold its appliance division to the Chinese company Haier in 2016, it did not sell the entire company.
GE announced on January 15, 2016, that it had agreed to sell its Appliances business to Qingdao Haier Co., Ltd. ("Haier") for $5.4 billion. The transaction was approved by the boards of directors of both companies and was expected to close in mid-2016. According to GE Chairman and CEO Jeff Immelt, the deal would benefit investors, customers, and employees, as Haier was committed to growing the business globally.
The sale of the Appliances division allowed GE to focus on its core industrial businesses, such as jet engines and power tribunes, instead of consumer products like washing machines. Haier, on the other hand, sought to expand its presence in international markets. The transaction included the 48.4% stake that GE Appliances owned in Mabe, a Mexican appliances company.
Following the sale, GE and Haier established a long-term strategic partnership to explore cooperation in areas such as industrial internet, healthcare, and advanced manufacturing. Both companies also agreed to work together to develop affordable consumer health initiatives in China.
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A viral Facebook meme sparked rumours of the sale
The meme implied that the sale of General Electric to China was cause for concern for Americans, suggesting underlying negative consequences. It tapped into conspiracy theories and political beliefs opposing the Democratic Party, claiming that the Democrats were "owned by China" and that Joe Biden's presidency would be calamitous for the United States due to his alleged connections with China.
However, fact-checking revealed that the Facebook meme was technically inaccurate. While it is true that there were connections between General Electric and China, it was not a sale of the entire company. In reality, the U.S. giant G.E. had sold off one of its subsidiaries, GE Appliances, in 2016. The China-based company Haier had purchased the General Electric Appliances division for $5.4 billion. This acquisition was announced in January 2016 and completed in the summer of the same year, before the 2016 U.S. presidential election.
The viral meme caused a significant increase in internet searches about whether General Electric was sold to China, with Google Trends indicating a peak on 5 January 2021. The post's timing, just before Biden's inauguration, fuelled conspiracy theories about his alleged ties with China. However, the sale of GE Appliances to Haier occurred long before Biden's presidential candidacy was even announced, refuting any connection between the sale and Biden's presidency.
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$33.95
There is no evidence of a deal to sell General Electric to a Chinese company
In 2020 and 2021, a viral Facebook meme claimed that General Electric was being sold to a Chinese company for $5.4 billion. The post, published by a Facebook user named Hal Downing, read: "General Electric is being sold to a Chinese company for 5.4 billion dollars. Americans, are you concerned yet?". However, there is no evidence to support this claim.
The figure of $5.4 billion refers to the sale of GE's appliances division, GE Appliances, to the China-based company Qingdao Haier in 2016. This sale occurred before the 2016 U.S. presidential election and long before Biden announced his candidacy in 2020, undermining the suggestion that Biden's presidency would lead to aggressive Chinese involvement in the American economy.
General Electric has been a publicly-traded company since it was incorporated in 1896 and is now traded on the New York Stock Exchange. The top 10 owners of General Electric include stockholders such as T. Rowe Price Associates, Inc., The Vanguard Group, Inc., BlackRock Fund Advisors, and others. There is no indication that General Electric is being sold to a Chinese company, and the viral Facebook post appears to be part of a broader conspiracy theory involving alleged connections between Democrats, Biden, and China.
While it is true that General Electric sold its appliances division to a Chinese company, this does not represent a sale of the entire entity. Therefore, the claim that General Electric is being sold to China is false and based on a misinterpretation or deliberate misrepresentation of the facts.
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The sale price of GE Appliances was $5.4 billion
In 2020 and 2021, a viral Facebook meme claimed that a Chinese company was set to purchase General Electric (GE) for $5.4 billion. However, this was not true. The American multinational conglomerate company did sell its appliances division, GE Appliances, to the China-based company Haier in 2016 for $5.4 billion. This sale was not for the entire entity of GE, but rather one of its subsidiaries.
GE's sale of its appliances division was part of its push to prune its non-core assets and transform itself into a digital industrial company. The transaction was valued at 10 times the last 12 months of earnings before interest, taxes, depreciation, and amortization (EBITDA). Whirlpool Corp, a competitor in the U.S. white goods market, was valued at 7.7 times.
The sale of GE Appliances to Haier was also motivated by Haier's desire to expand its presence in the United States market. This acquisition provided Haier with ownership of a century-old business that manufactures refrigerators, freezers, clothes washers, and dryers under various brands.
Prior to the sale to Haier, GE had attempted to sell its appliances division to Electrolux for $3.3 billion in 2015 and $5.4 billion in 2016. However, both deals faced opposition from U.S. antitrust regulators, with the latter resulting in an antitrust filing against Electrolux.
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GEA has grown its market share every quarter since being acquired by Haier
In 2016, General Electric sold its appliance business to the Chinese company Haier for $5.4 billion. This was a significant acquisition for Haier, as GE Appliances is a well-known brand in the US, with a century-old history.
Following the acquisition, Haier has successfully grown its market share every quarter, even during the COVID-19 pandemic. This success can be attributed to Haier's ability to adapt and implement elements of its unique management model while still respecting the local culture and the existing structure at GEA.
For example, Haier's model of Micro-Enterprises (MEs) was adapted to fit the larger size of GEA's MEs, which have thousands of employees. These MEs function with a high degree of autonomy, managing their own Profit & Loss, and the VPs decide on resource allocation. This approach empowers employees by giving them a sense of ownership and enabling them to make decisions that drive the business forward.
The acquisition of GEA by Haier is not just about the transfer of ownership but also about the infusion of new ideas and a spirit of "win-win" cooperation. Haier's CEO, Mr Zhang Ruimin, has a vision for Haier to become a platform for innovation, inviting partners like GE to join and pursue growth projects together. This strategic partnership aims to enhance manufacturing efficiency, explore joint initiatives in industrial internet, healthcare, and advanced manufacturing, and develop affordable consumer health initiatives in China.
In conclusion, the growth of GEA's market share every quarter since being acquired by Haier demonstrates the success of Haier's management model and its ability to adapt and empower its employees. The acquisition has also opened up opportunities for Haier to expand globally and pursue new avenues of growth and innovation.
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Frequently asked questions
No. In 2016, General Electric sold its appliances division, GE Appliances, to the China-based company Qingdao Haier for $5.4 billion. However, this was not a sale of the entire entity. General Electric is publicly traded on the New York Stock Exchange.
GE Appliances is headquartered in Louisville, Kentucky, and makes products such as refrigerators, freezers, cooking products, dishwashers, washers, dryers, air conditioners, water filtration systems, and water heaters.
Qingdao Haier is a Shanghai stock exchange-listed company that is 41% owned by the Haier Group.
The Haier Group is the world's leading home appliance provider, with global revenues of US$30.3 billion and profits of US$2.89 billion in 2015.
The sale was likely motivated by General Electric's desire to adapt to changing times and customer preferences.
