September 21, 2018
Business Latest News | Poll Questions | Wind Storm | Foliage Drives | Weekend Events

GE plans 12,000 job cuts in power unit; no job impacts in Bangor yet

Thibault Camus | AP
Thibault Camus | AP
General Electric said it will cut 12,000 jobs in its power division as alternative energy supplants demand for coal and other fossil fuels.
By Richard Clough, Bloomberg
Updated:

General Electric plans to cut 12,000 jobs in its division that manufactures power turbine components but did not announce any layoffs in its Bangor plant.

“We can confirm no job impacts are being announced today in Bangor,” GE spokeswoman Katie Jackson said.

The layoffs would affect only the GE Power business, a division including the Bangor facility that manufactures key components for power turbines. It would not affect facilities such as the one in Auburn, which makes consumer and industrial products.

Jackson would not comment on future announcements about job cuts at the Bangor plant, which employs around 450 people.

There were some layoffs in the power business’ Schenectady, New York, and Greenville, South Carolina, plants last week, a source with knowledge of the situation told the Bangor Daily News.

The Maine Department of Labor had not heard anything about layoffs at the Bangor plant.

“We would get a warn notice if there were going to be any significant loss of employment, and we usually get those within 60 days by the Worker Adjustment and Retraining Notification Act,” DOL spokeswoman Laura Hudson said.

The plant laid off 80 workers in the fall of 2015 as part of a shift of jobs to Europe.

The recent global layoffs come as GE’s new leaders move to slash costs and stabilize the beleaguered manufacturer.

The reductions, accounting for about 18 percent of GE Power’s workforce, will mostly affect professional and production workers outside the United States. GE is also chopping capital expenditures and research-and-development spending as it grapples with a sharp downturn in gas- and coal-power markets.

The moves add to a flurry of cost cuts by CEO John Flannery, who has already scaled back use of corporate jets and delayed work on a new Boston headquarters since taking the reins in August. GE, the world’s largest maker of gas turbines, said last month it would pare the quarterly dividend and sell some businesses.

Trimming the workforce will help GE achieve its goal of slicing $1 billion in structural costs next year in the power division. That plan is part of a larger effort to cut $3.5 billion in expenses across the company through 2018.

GE had about 300,000 employees across its operating units at the end of last year. Power was the company’s biggest division, with sales last year of $26.8 billion. The total would have been $36.8 billion after accounting for the effects of a reorganization this year in which GE added some energy businesses to the unit.

The manufacturer has been hit hard by flagging demand for electricity generated with natural gas, in part due to a shift toward power from renewable sources. In addition, “we have exacerbated the market situation with some really poor execution,” Flannery told investors last month.

The power unit expanded considerably with the $10 billion acquisition of Alstom’s energy business in 2015 — but the drawn-out deal has turned into a drag. Intended to broaden the product lineup with steam-turbine technology, the tie-up pushed GE Power’s workforce to 65,000 at a time when the market was slowing.

“Alstom has clearly performed below our expectations,” Flannery said last month, referring to the assets acquired from the French company.

As the size of the hurdles became clear this year, GE made changes to management in the power business and reorganized divisions. Russell Stokes was named head of GE Power in June, taking over from Steve Bolze, who left the company shortly after Flannery was named to succeed Jeffrey Immelt as GE’s next CEO.

BDN writer Lori Valigra contributed to this report.

Follow the Bangor Daily News on Facebook for the latest Maine news.


Have feedback? Want to know more? Send us ideas for follow-up stories.

You may also like