Light Bulbs at The Home Depot

Arthur and Bernie are the founders of The Home Depot. In the book  World Changers, they talk about Jack Welch and General Electric, their supplier for lightbulbs:

Arthur: One guy who never learned was Jack Welch [of General Electric].

Bernie: He never did. In fact, we threw his light bulbs out of the store for that reason. I had a place in Florida and when you went down there in October and November, you sell a lot of bulbs due to the switch to daylight savings time. And GE was making our bulbs then. I went into the stores in Florida and found out we didn’t have a single sixty-watt bulb in stock. I remember calling Jack up and saying, “Jack, this is insanity. We don’t have bulbs.” “We’ll have to check into it,” he said.

It was total bullshit. He sent the head of GE lighting down to see us and he said, “There won’t be a problem next year. We’ll definitely take care of you. You just have to give us the orders ahead of time.”

We did that and when October and November came it was the same goddamn thing. There were no bulbs in the stores.

And I found out the reason for it is because their year-end bonus was based on how much inventory they had at the end of the year. The following year, I flew to the Netherlands, met with the Philips people, and I came back and told Jack, “No more problems. We’re throwing you out.”

And we threw GE out. Philips built factories to supply us with bulbs in the United States.

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