With political and corporate dignitaries on hand, General Electric on February 10 re-launched its famous Appliance Park facility as a fully operational U.S. manufacturing facility, rolling off the company's GeoSpring Hybrid Water Heater. The water heater is the first appliance to come off the line at Appliance Park since 1957, though the facility's outbuildings have continued to house much of GE's corporate staff.
Big Government Made it Happen
Less than four years after GE was publicly considering selling off its appliance division, a billion dollar-plus investment in designing new appliances from the ground up now finds that same division the subject of a Superbowl XLVI ad while politicians, union leaders and executives call them a case study for the future of U.S. industry.
According to the speakers at the event the energy efficient design of the water heater was the most important factor in building a case for state and federal governments to champion its production in the U.S. GE's Steve Downer, the GeoSpring's product general manager, said it's the "most energy-efficient water heater available today." Downer noted that the RAFT regulations that go into effect in 2015 were not a major consideration of the design process so much as simply making a water heater efficient enough to justify its own cost in a short time.
Kentucky Governor Steve Beshear, Lt. Governor Jerry Abramson, new mayor (Jan. 3, 2011) Greg Fischer, and U.S. Congressman John Yarmuth (Ky.-3), all Democrats, were all on hand to celebrate what they characterized as a victory for U.S. manufacturing in the green sector. "In this instance government decided we weren't going to be out-competed in energy efficient appliances," Congressman Yarmuth said in his turn at the podium. Yarmuth later told appliance DESIGN that GE estimated Asian manufacturing would be about 7 to 10 percent cheaper with that country's incentives and labor costs, and specifically credited Lt. Gov. Abramanson, then working as the mayor of Louisville, as the point-man for making up that difference in federal and state tax incentives for customers and the manufacturers.
The commonwealth and federal government provided about $17 million in incentives to design and build the new energy-efficient facility and other investments that the company will make at Appliance Park during the next several years. "We made a commitment early in my administration that energy-related development would be a high priority," said Gov. Beshear. "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. GE's new hybrid water heater is a perfect match for our energy commitment and our strong manufacturing core."
A Different Kind of Design Process
If the energy efficiency of the product and industrial design made the government support possible, the design itself, according to key members of the design team, was thanks to a major shift in the company's manufacturing and design process toward greater on-site collaboration and lean processes.
The outbuildings of the now churning factory include the IDO Center, where appliance DESIGN was provided an exclusive tour of the facilities provided to GE's design engineers. According to Marc Hottenroth, whose team of about 30 engineers configured the revitalized factory for lean production of the water heater, his staff worked very closely with the product design team through the entire process, with design engineers and plant engineers running between their facilities to be personally on hand for decisions. "The good thing about lean is you get lean," joked the (now fit) Hottenroth.
Both Hottenroth and Lou Lenzi, director of Industrial Design, stressed that the benefits of their collaborative efforts were well worth the workouts. "All the problem solving is in real time," said Lenzi. "There's no powerpoints and board rooms; everybody is down here or up there [at the IDO center]."
"The trick is to think like you're 12," said Hottenroth of the team's conceptual erector-set approach to reimagining their industrial processes. Each member came in with seven ideas and most of those were hashed out with low-fi models. "We went through a lot of foam and duct tape," said the design leader.
Among the more interesting designs along the manufacturing line was the boxing system. Rather than purchasing a large, ~$40,000 unit to lift boxes over the finished water heaters, the system's operators devised their own rig and built it from one trip to the local hardware store. The plant conversion itself benefited from an enormous amount of recyclable steel and concrete left over from the plant's last configuration in the 1950s.