The first GE GeoSpring hybrid electric water heater rolled off the assembly line in Louisville, Kentucky today, and it seemed like half the city was there to watch it happen.
Steve Beshear, the state’s governor, John Yarmuth, the district’s congressional representative, as well as Louisville’s mayor, a gaggle of local press, and dozens of GE engineers and union workers milled about Appliance Park, cautiously celebrating the sharp-looking, high-tech water heater and, perhaps even more, the jobs now needed to build it. After all, when a recession-struck region gets a brand new manufacturing operation—especially one producing an innovative, forward-looking product—the spotlight burns bright.In fact, one of the brightest-burning spotlights in the nation shone on this factory: A Super Bowl ad portraying a revitalized Appliance Park was watched by over 100 million people.
As such, this was a notable occasion for two reasons: First, it marked the beginning of production of the most energy efficient water heater on the market. Second, it’s the first new product that has rolled off the assembly line at GE Appliances in 50 years.
The event perhaps marks the end—or at least an aberration—in a companywide trend of outsourcing manufacturing to Asia or Mexico. At its peak, the GE Appliances Center employed well over 20,000 workers. Today, that number has shrunk closer to 4,000. This new manufacturing operation has already yielded nearly 500 jobs in Louisville, and is expected to support hundreds more by 2014. And those jobs are much-needed: According to a GE rep, the company received 6,000 applications within an hour of posting the opening.
And the nature of the product at the center of the turnaround is telling: The GeoSpring is a higher-end hybrid water heater that, if GE’s stats are correct, pays for itself in energy savings in just 3 years. The water heater will retail for $1,199-1,299, but will reportedly save the consumer $325 a year on their electricity bills. Here's how it works.
According to the U.S. Department of Energy, the water heater is one of the most energy intensive appliances in the household, just behind the HVAC, and the average unit costs $520 a year to operate—and the GeoSpring is 62% more efficient than that. Efficiency can further be increased by adjusting its settings on a computer interface—particularly, there’s a vacation mode that can be activated to drastically lower the heat level. This is exactly the kind of energy efficient product that America should take the lead in manufacturing, which, coincidentally, was a topic I'd just discussed on MSNBC's the Dylan Ratigan Show—unleashing American innovation by steering investment towards the cleantech and energy efficiency sectors.
After a brief tour of the operation, attendees gathered in a huge open corner of the factory—which itself has been renovated and put back to use after laying idle for decades—for a succession of speeches from the GE Appliances CEO, the Kentucky governor, and other dignitaries. Even in this deeply red state, each of the officials expressed a dedication to creating “green-oriented jobs”, to use the governor’s coinage, and to making the state a leader in energy efficient technologies.
"We developed an aggressive plan to not only research and develop new kinds of energy production, but to attract businesses and projects that are similarly committed to cleaner, greener energy applications," Beshear said.
Indeed, if it performs as GE claims it does, the GeoSpring is precisely the kind of appliance that can help Americans take major strides in improving energy efficiency. There's reason to believe the product will be popular—previous models have sold well, and outlooks are promising, GE reps say: market share of efficient water heaters is slowly expanding.
However, the jubilation of the day was far from unbridled: Applause was loud, but scattered. Optimism was rampant, but was dampened by an air of caution. Even as IUE-CWA Local 761 President Jerry Carney exhorted his workers to stand up and thank the politicians and the GE chiefs, the union workers were visibly hesitant. After decades of layoffs, further job losses throughout the recession, and persistently gloomy talk about the future of U.S. manufacturing, an ambivalent response seemed exceptionally justified.
Sure, there are a few hundred more jobs; and that’s great news. But why now? And will they last? Why was GE building energy efficient water heaters in Kentucky all of a sudden, after chipping away its labor force for 50 years?
The answer isn’t straightforward; it has to do with successfully renegotiated labor contracts, expensive international shipping rates, incoming federal efficiency standards, and a chunk of stimulus funds. I’ll do my best to untangle that web in the second part of my dispatch—look for that soon.
Note: GE covered the travel expenses to Louisville, Kentucky.