In 2016, Haier acquired General Electric's (GE Appliances) appliance unit, a brand with over a century of history in American homes, for $5.6 billion. The deal came after a failed attempt to sell it to Electrolux in 2014 due to antitrust concerns, at a time when GE was prioritizing businesses such as finance and aerospace.
Haier's transformation dates back to the 1980s under the leadership of Zhang Ruimin, who linked compensation to performance and established a culture of quality. A symbolic event was the destruction of 76 defective refrigerators, with the message of zero tolerance for failure. Beginning in 2005, the company divided more than 60,000 employees into more than 1,000 micro-enterprises (the Rendanheyi model), with autonomy and direct responsibility to customers.
This bold move by Zhang Ruimin to create internal micro-enterprises sought to combat bureaucracy and connect each worker directly to the market. Under the Rendanheyi model, all employees were required to act as entrepreneurs, which accelerated innovation and gave rise to projects such as e-ordering platforms or new lines of household appliances.
Zhang Ruimin pointed out that the Rendanheyi model would be accepted because it is based on respecting the individual: putting people first and offering them the opportunity to undertake unleashes their potential and fosters sustainable innovation within the organization.
GE Appliances, heir to innovations such as the 1927 "Monitor Top" refrigerator, had lost strategic priority within the conglomerate since the 1980s. For Haier, the acquisition offered a well-established brand and a consolidated distribution network in the United States, a market in which, despite entering in 1999, it maintained a low market share.
After the closure, GE Appliances maintained its autonomy and began adopting internal micro-businesses. The laundry unit, for example, went from losses to profits in one year. At the same time, Haier boosted its commitment to IoT in connected appliances and open innovation through FirstBuild, which led to the emergence of the Kitchen Hub, which won an innovative product award at CES 2018.
The subsequent challenge was to transform GE Appliances into a truly global brand—traditionally focused on the United States—by strengthening its direct relationship with users and competing in the connected home ecosystem against technology players like Apple, Google, and Amazon, while maintaining a focus on quality and proximity to the market.