General Electric (GE), long considered the most-prominent business in Schenectady, New York, on August 7 announced another 225 job cuts at its main campus in the city. The announcement comes as GE continues to restructure its operations amid a downturn in global demand for the company’s turbines.
GE cut about 110 jobs at the Schenectady facility last year. GE Power historically has been based in Schenectady, near the state’s capital of Albany, though GE now calls Atlanta, Georgia, home to GE Power since Russell Stokes, current head of the Power business unit, is based there.
GE in a statement Tuesday said the layoffs impact about 200 hourly production employees, about 5% of its workforce at the site. It also said some 25 vacant positions will not be filled. The company cited a continued drop in sales of power equipment.
There have been about 4,000 GE workers in Schenectady in recent years. Many of the jobs have been in engineering, marketing and procurement with GE Power. Some workers have been involved with GE’s efforts toward renewable energy.
The plant employed more than 40,000 workers during World War II.
“Based on the ongoing challenges facing the power industry and a 45 percent decline in volume at our Schenectady facilities, GE announced a job reduction impacting a number of manufacturing and assembly employees today,” the company said in a news release. “This action is difficult and does not reflect the performance, dedication and hard work of our employees. All impacted employees will be provided with a comprehensive severance package, including transition support to new employment.”
Union workers at the plant are represented by IUE-CWA Local 301. Job cuts had been rumored for weeks, according to union officials, who said under agency rules workers hired most recently are most likely to be laid off.
“The recent decision by GE Power to lay off our members is extremely disheartening and disappointing,” Rob Macherone, a union business agent, said in a statement. “This company was built on our members’ backs, and they continue to pay a price for things outside their control. Our focus right now is ensuring those affected by these cuts receive all of their contractual benefits, and going forward, we will continue to fight for job security for our members.”
City Will Look at Helping Affected Workers
Schenectady Mayor Gary McCarthy told The Daily Gazette newspaper: “It’s always unfortunate, and it’s really hard on the individuals who are affected.” He said the city would look at ways to help the affected workers.
Gary Hughes, majority leader of the county’s government, told the newspaper the county would work with GE to help workers find new employment. “We’re way better off economically as a community to deal with this than we were a few years ago,” Hughes, who also chairs the county’s Economic Development Committee, said. “GE hires well and trains well, so you leave there with a set of skills that other employers want.”
Inventor Thomas Edison founded what would become GE in Schenectady in 1889, when he established manufacturing operations in the city.
The company, in announcing 12,000 job cuts last December, or about 4% of its global workforce of 295,000, said it needed to cut $1 billion in costs to stay competitive with other turbine manufacturers such as Siemens and Mitsubishi Hitachi Power Systems, which also have cut jobs in recent years.
About half of GE’s announced cuts were expected to be made in the company’s European operations, including 1,400 in Switzerland and 1,100 in the UK. GE in June said it would cut 1,200 jobs in its power business in Switzerland, where the company had about 4,200 workers.
Hughes said “it was inevitable there would be some impact on the Schenectady plant” after the company announced its global cuts in December. “This is directly connected to the amount of work coming into the plant,” he said.
More Jobs Cut at Plant in 2017
GE let go of 75 workers at the Schenectady plant last November and cut 35 jobs there in January 2017. GE still employs about 1,500 workers, including engineers and scientists, at its Global Research headquarters in Niskayuna, New York.
An engineer at the Global Research facility was arrested earlier this month and charged with stealing trade secrets involving the company’s turbines. A federal affidavit showed the engineer admitted the thefts, which authorities said had occurred since 2014.
GE in June announced it would cut more than 260 jobs at a facility in Salem, Virginia, next year when it ends manufacturing at the site.
CEO John Flannery, who took over the company from long-time CEO Jeffery Immelt in August of last year, in November 2017 outlined plans to reduce manufacturing in GE’s power business due to falling demand for new equipment. He said division cuts would include $3.5 billion in “structural costs,” including $1 billion in the power unit.
The company in June was removed from the Dow Jones Industrial Average due to its poor financial and stock performance. Flannery in late June said the company was finished with its restructuring, which has involved selling several business units.
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—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).