Heating Up Hotpoint

The boss of Chicago's fast-growing Hotpoint, Inc. likes nothing better than to grab a sale away from giant General Electric Co. What gives James J. Nance the kick is the fact that G.E. owns Hotpoint lock, stock and dishwasher. But nobody would ever know this to watch Hotpoint's Jim Nance. He is responsible to G.E., but he operates Hotpoint as if he bossed an independent company. He has his own board of directors, runs his own sales and engineering staff, maps his own strategy.

G.E. likes the rivalry; it gives buyers a greater "choice" of products, permits Hotpoint to reach dealers who would be excluded by G.E.'s existing franchises. Hotpoint's competition also keeps G.E.'s own salesmen and production staff on their toes. The competition is even stiffer than G.E. bargained for. In Nance's four years as president, he has pushed Hotpoint from a relatively minor place to a spot among the big electric appliance manufacturers, boosted its yearly sales from $20 million to an estimated $200 million.

Nance has spent $40 million building or buying five new plants. Hotpoint, which once had to get some of its products from G.E. factories, now makes most of its own washers, dryers, dishwashers, garbage-disposal units, ranges and heaters. Only Hot-point's refrigerators and food freezers are still made by G.E., and last week Nance took steps to change that. He announced he has bought a 400-acre site near Chicago to build a $20 million refrigerator plant as soon as building restrictions permit.

Wartime Recruit. Jim Nance, 50, a relative newcomer to the G.E. hierarchy, was picked by ex-President Charlie Wilson, who was impressed by Nance's work as a member of WPB's advisory board for industry. He was already a veteran in the electrical industry, had managed Frigidaire's commercial refrigeration department, bossed Zenith Radio's wartime production. Charlie Wilson liked his zip, enthusiasm and selling touch. He sent him to Chicago in 1946 as executive vice president of a G.E. subsidiary then called Edison General Appliance Co. The company's chief value was its brand name, Hotpoint, first nationally advertised appliance in the U.S. As president, Nance took full advantage of the brand immediately by changing the company's name to Hotpoint.

His first big expansion, with $1 5 million borrowed from G.E., was to build an electric-range plant in Cicero, Ill. to turn out 600,000 ranges a year. He spent another $11 million buying and retooling a surplus war plant in Milwaukee to turn out hot-water heaters, but with the Korean war, used it to land Hotpoint's first big defense order for turbo superchargers. With a Government tax write-off, Hotpoint expanded the plant, now makes both turbo superchargers and hot-water heaters. Nance had also begun a new $20 million plant to make refrigerators when a Navy contract diverted it to making Pratt & Whitney jet-engine components.

Electric Living. Hotpoint's expansion has freed it from dependence on G.E. for basic components for many of its products, allowed it to bring out its own designs. Despite talk of overproduction, Nance thinks the market for appliances has hardly been scratched. The refrigerator, he points out, has already reached 90% of its potential market, but the electric range has reached only 21%. "The automatic washing machine had the greatest postwar growth of all appliances but has saturated only 13% of the market. The electrical dishwasher has reached only a little more than 1,000,000 homes so far. The era of electrical living is now mechanizing the home just as it did the factory and the farms, and it is only beginning."

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