Bumps in the road

Phil Marshall, president and CEO of GE Lighting & Industrial (Europe, Middle East & Africa) spoke to Lighting at the UK launch of GE’s Infusion LED module

Do you see the Infusion module as a game changer?

I think all manufacturers will tell you their products are the best, but I do think we’ve got something special and I think we’ve partnered with a great company in Lucent. I think GE’s a great company in terms of quality, it’s a great company in terms of heritage and it’s a great company in terms of innovation - but it’s not a great marketing company. I think the lighting business is one of the world’s best kept secrets, so I think one of our focus areas is not just around innovation, but also about the way we go to market.

It was suggested at one time that GE was going to sell off its lighting division. What happened to those plans?

There was a time, I think it was around 2006-07, that the company started evaluating multiple parts of GE, and lighting was one of those elements. The company decided in 2008 that the investments needed in lighting, and the potential changes in the market, would require investments that it wasn’t prepared to make. Clearly there was an appetite for a split - a separate legal entity - but the changes in the market stopped that.

By ‘changes’ do you mean the recession?

The recession stopped the sell-off process. But we all came out of the recession and saw the acceleration of the changes around LED technology and opened our eyes to the applications we couldn’t have seen four or five years ago.

GE’s company view of lighting also changed, so now we’re in a place three years later where there is no desire to sell the platform. The company has invested millions restructuring the platform, based on legislation, and the company has, and continues to, invest hundreds of millions of dollars in LED and OLED technology. We’re now a central part of GE.

You’re on the record as saying you don’t think it’s important to have a fittings side to the business. Do you still think that’s the case?

I’m not sure how the next five years will evolve. I’m not sure how you’ll define a light fitting in five years. I’m not sure how you’ll define a lamp. I mean our Infusion module, is it a lamp, is it a fitting? We look at it as a lamp, but you can look at it as a fitting.

The way the market is changing, we clearly need to find some way to play the markets that we haven’t played before, so we have to balance a little bit the partnerships we have and we have to look to do things a little differently to the way we have in the past. But we don’t want, for example, to go and acquire Siteco or go and acquire Zumtobel or go and acquire a big fittings manufacturer.

Were you left more exposed by the phase-out of incandescents than other members of the big four?

More so in terms of the relative size of our business in Europe, yes. I’m not sure it’s strictly true in a global discussion. But you know, a cheque’s a cheque. Restructuring a plant is restructuring a plant. I don’t think our cheque was any more than anybody else’s cheque. The next couple of years are going to be big cheques for innovation. That’s the thing about the lighting industry, if you want to be a global player, you’ve got to spend a lot of money.

Are the problems in the Middle East and Japan making things difficult for you?

I think the Middle East is a fantastic place to do business, so for us we are absolutely committed to the Middle East, probably more so than ever, because I think when you have periods of turmoil you get to see who your true friends and your partners are. I think if you look at what’s going on in Asia, particularly now with the Japan situation, all it has really done is emphasise the fact that the industry has become very dependent on that region for supply - it doesn’t change our commitment to the region. I think from 2011 you’re going to see a lot of supply chain pressure. I don’t see lead times getting shorter through the back end of 2011.

Because of materials shortages?

I think it’s a couple of things. Component shortages, you’ve seen component shortages. Every time Apple announces that it’s going to sell another $5 billion of products this quarter, there’s going to be a component shortage in other industries.

I think as we came out of 2009 and into 2010, many manufacturers didn’t put capacity in because they were nervous. Only in the latter part of 2010 did we see capacity going in, so we were always going to have shortages into 2011 and now the situation has been exacerbated by Japan, and by other industries such as automotive and electronics.

It just means you’ve got some bumps in the road that you’re going to have to work through, so it’s going to be tough from a supply side.

Phil Marshall was talking to Ben Cronin

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