The Closing Bell: GE Appliances announces Chinese buyer, iconic downtown businesses reject sale rumors, locally made Fords good for business, and more
Welcome to The Closing Bell. This is your last stop for biz scoops and big news before the weekend — a roundup of stories that can’t wait till Monday.
Chinese company to acquire GE Appliances
Very early this morning, General Electric announced via press release that China’s Haier Group will acquire its appliance division based in Louisville for $5.4 billion in an all-cash transaction. Last year, Electrolux was on the brink of buying the division for what now seems to be a measly $3.3 billion, but that deal fell through amidst an antitrust trial brought by the feds.
According to a news release, GE Appliances’ current management team will remain in place to lead the company. The deal is expected to close in mid-2016.
We’ll have much more on this story as it unfolds and what it means for GE’s 6,000-person workforce later today. But first…
Al J. Schneider Co.: Galt House, Crowne Plaza not being sold
Recently, we heard from two reliable sources that Louisville-based Al J. Schneider Co. planned to offload the Galt House Hotel and possibly its Crowne Plaza Louisville Airport properties.
That was enough to prompt us to call up the Al J. Schneider Co. and ask flat out: Are you or are you not preparing to sell? The company answered with a definitive no.
“Right now, there’s no plans. We are not actively seeking out buyers,” said Amanda Lambert, the company’s marketing communications manager. “There is always people who are interested, and for the right price, every business is for sale, but right now, it is not anything on our radar.”
Lambert said Al J. Schneider Co. is currently replacing the carpet on every floor of the Galt House’s Rivue tower from the top down. Work is expected to wrap up in the next couple of weeks.
Last year, the company also renovated the Galt House conservatory, which connects its two towers, by replacing the furniture and carpet and adding flat screen TVs, she said. The Crowne Plaza added a fitness center to its hotel, a project that was finished at the end of last year.
Like other hotels in downtown Louisville, Lambert said the Galt House is trying to keep its look and offerings fresh to compete with the new hotel stock coming online — competition the hotel welcomes.
Vincenzo hopes to retire soon, but says he’s not currently looking to sell restaurant
Speaking of selling rumors, Insider Louisville also has heard some talk that the Gabriele brothers were looking to sell landmark Louisville restaurant Vincenzo’s.
They’ve run Vincenzo’s for about 30 years, and the restaurant has become as revered as Vincenzo Gabriele’s former workplace Casa Grisanti.
“I would like to (retire) in the very near future,” said Gabriele, but with 20 years left on the lease, he and his younger brother Agostino Gabriele, who’s 66, aren’t currently looking to get out of the restaurant business.
Still, like any good businessperson, Gabriele said: “I will only sell if the price is right.”
When that time comes, Gabriele noted that he and Agostino have built a quality team of employees that could take over. General manager Jonathan Tarullo is Vincenzo’s right-hand man, and Agostino’s is chef Jay Bellucci.
“These people have enabled us to be here today,” Vincenzo Gabriele said. “Vincenzo’s is a place where we believe in teamwork. It’s a big ship. The employees are the most important thing.”
Vincenzo’s is able to hold on to employees because it offers a specialized training class and shares its profits with workers, he said.
The brothers continue to work to “give our guests another reason to come back,” Gabriele said. Last spring, they gave the restaurant a facelift that included new paint, new lighting and some menu changes.
Ford predicts outstanding year, in part due to Louisville-made vehicles
While markets have not been kind to automakers, Ford Motor Co. expects another “outstanding year” in part because of the strength of products made in Louisville.
Both local plants – Louisville Assembly Plant and Kentucky Truck Plant – will see launches of new vehicles. In addition, Ford, like other auto makers, is making significant investments in car tech, including autonomous vehicles and alternative propulsion systems.
At Louisville Assembly Plant, Ford this year will launch the 2017 Escape, which will come with two new engine options and a redesigned interior.
“SUV sales are strong both for Ford and the industry,” Ford spokesman Judd Templin told IL. “We sell Escapes as fast as the plant can make them.”
The company sold more than 306,000 Escapes in the U.S. last year. Sales jumped 9.2 percent in December.
The new Escape will feature two new EcoBoost engines and technology that shuts off the engine when it stops at a light, for example, to save fuel. Templin said Ford realizes vehicles have to be offered with various engines to fit motorists’ different lifestyles.
“What works for the lifestyle of a driver living in downtown Louisville will be different than a driver in La Grange,” he said.
At Kentucky Truck Plant, Ford will launch the new 2017 Super Duty, the first with a “military-grade” aluminum-alloy body. The Super Duty also comes with alternative propulsion systems. Drivers who choose the gaseous fuel prep option can run the truck on compressed natural gas, which reduces carbon dioxide emissions by about 20 percent.
The company also announced this month that it was tripling its fleet of Fusion Hybrid autonomous, or self-driving, research vehicles. Ford said it will have more autonomous vehicles than any other automaker, and that this week it became the first in the industry to test autonomous vehicles on snow, calling it “a major step toward fully autonomous driving.”
Ford expects this year’s pre-tax profit to be equal to or higher than last year. And the German business newspaper Handelsblatt said Tuesday that Ford in 2015 had its best results in Europe in four years and gained market share for the second consecutive year. —Boris Ladwig
Buffalo Trace Distillery logs another record year for visitors
Even though you’ll find nary a mention of Buffalo Trace Distillery in the Kentucky Bourbon Trail passports (because they are not members of the Kentucky Distillers’ Association), the 243-year-old historic distillery logged an impressive number of visitors in 2015: 145,849. That’s 18 percent over the previous year, and since the end of 2009, they’ve seen a 190 percent growth in visitation.
Buffalo Trace, which produces several brands from Pappy and Weller to Eagle Rare and Blantan’s, completed a Visitor’s Center expansion last spring, which helped accommodate more tours.
“Between the expansion, the opening of our Old Taylor House, the completion of our new technologically advanced 83,000-square-foot distribution center, and the additional 282 acres of land we purchased to start our own farm-to-table bourbon, we’ve had very a eventful year at Buffalo Trace Distillery,” said Meredith Moody, marketing services director.
Yum! reports China same-store sales, hires C-suite executives in India
Louisville-based restaurant company Yum! Brands Inc. continues to release information about its sales in China to calm fears about its operations there and recently revamped the organization of its India operations to help sales growth in the country.
Same-store sales in China were up an estimated 2 percent during the fourth quarter of 2015, compared to a year ago, according to a filing with the U.S. Securities and Exchange Commission.
Looking just at December 2015, same-store sales were up 1 percent compared to December 2014. KFC China’s same-store sales increased 5 percent, while same-store sales at Pizza Hut Casual Dining dove 11 percent in December.
Yum does not typically release monthly sales information but has done so in the last part of 2015, a practice it will now discontinue in 2016, according the SEC filing. It is unclear why but likely has to do with the fact that the spin-off of Yum China will take place toward the end of this year.
Yum will release its full fourth quarter and year-end earnings report on Feb. 3.
In India, the company has split its operations into three divisions. Previously, it operated its subsidiaries Taco Bell, Pizza Hut and KFC under the single umbrella of Yum India.
However, according to a story in the Economic Times, Yum India’s head Niren Chaudhary has moved to Dallas to oversee KFC operations in Asia, Canada, Latin America and the Caribbean, and Yum leadership has appointed three people to head up the three subsidiaries’ India business.
“In developing markets, Yum continues to face a huge challenge, and India numbers still don’t look robust,” Gaurav Marya, promoter of franchising and licensing firm Franchise India, told the Economic Times. “Splitting and narrowing focus on independent businesses is aimed at regaining growth momentum.”
Failed GE acquisition fallout? Electrolux CEO steps down
Late last night, IL told you that China’s Haier Group could be on the brink of buying General Electric’s Louisville-based appliance division for more than $4 billion, as reported by the Wall Street Journal. Within a few hours of that report, the companies sent out a joint press release announcing a $5.4 billion deal, as mentioned above.
The companies expect that deal to close in the middle of this year. In the meantime, let’s take a quick look back at a buyer that never came to be…
About a month after AB Electrolux failed to acquire GE Appliances, the CEO of Electrolux announced he is stepping down. The company announced this week that Keith McLoughlin has decided to retire. He will be succeeded by Jonas Samuelson as of Feb. 1.
During McLoughlin’s tenure, the Swedish appliance maker had tried to significantly expand its U.S. presence by acquiring GE Appliances for $3.3 billion. Though both companies had agreed to the acquisition, it ran afoul of antitrust regulators.
The U.S. Department of Justice sued to block the deal, saying it would create a duopoly between Whirlpool and Electrolux and would increase prices for consumers. GE bailed on the deal five weeks into the trial, and Electrolux had to pay GE $175 million because the acquisition fell through.
GE continued looking for a buyer for the appliance division, which employs about 6,000 in Louisville. A source told IL Tuesday that representatives of buyers were touring local GE plants and that a completion of the sale could happen in “a matter of weeks.”
Looks like it’s happening even sooner.
Ronnie Leten, chairman of the Electrolux board, said McLoughlin had “made significant contributions” to the company. “His personal integrity, commitment and loyalty to this company have been well appreciated,” Leten said in a news release.
Bristol Bar & Grille highlighting new farmer each month
The Bristol Bar & Grille works with a number of different regional farmers and producers to source food for its menu. The Bristol in the Highlands even has a beehive on its roof.
As a continuation of its commitment to source many products from Kentucky and Southern Indiana, the Louisville restaurant company is starting a farmer of the month program at its five locations.
The chefs at each Bristol will create a monthly featured dish that incorporates the ingredient or ingredients supplied by the farmer of the month, a person or group who provides food that Bristol chefs cook with.
The new program starts in February with Jim Mansfield, owner of sheep and lamb farm Four Hills Farm, which Insider Louisville profiled as part of a story about how the Bristol sources its food.
Hot 2 Trot horseradish will take the March slot, followed by LouisMill organic flour and grits and Capriole cheese in April and May, respectively. Stone Cross Farm beef, pork and lamb is on the menu for June, and Hillerich Family Farm produce will round out the list thus far. —Caitlin Bowling
Thinking ahead with Leadership Louisville
Applications are now open through Feb. 19 for the two seven-month Ignite Louisville classes beginning in 2016. The classes, presented by Leadership Louisville, will run from April through October and the second will run from October through April 2017.
Ignite Louisville is a talent development program for next generation leaders, preparing to lead organizations and our community into the future. The program has graduated over 665 rising leaders since 2004.
Ignite Louisville teams participate in the Yum! IGNITES Louisville Challenge and take on a project proposed by a local nonprofit. This benefits the teams with hands-on leadership learning and the nonprofits with professional pro bono work.
For an application and complete program details, visit the website. —Melissa Chipman
Working like a dog
Heidi Potter of the women’s style blog Style Blueprint had the tough task of documenting Louisville’s shop dogs for the blog. The adorable photo essay is worth a look. Certainly one of the worst parts of Insider’s move to our downtown offices from our NuLu headquarters is we no longer have easy access to regular puppy facetime with Major at Revelry just down the block, who is the first pup featured.
Of course, we have our own “shop dog” here at Insider Lou. Culture Editor Sara Havens is owned by her adorable mutt Detective Bo Brady who spends part of almost every day wandering the halls, snoozing on his bed, barking at the UPS guy and schmoozing the staff for food. Brady will eat just about anything except Wasabi Soy Triscuits. Go figure. A day without Brady in house is a sad day indeed.
Do you have a “shop dog”? Send us a picture! [email protected]
See our previous coverage of office pets here. —Melissa Chipman