GE Power Systems Announces Plans to Reduce Workforce
Due to Lower Equipment Demand
ATLANTA--(BUSINESS WIRE)--July 23, 2002--GE Power Systems (GEPS)
has announced plans to eliminate approximately 2,500 jobs over the
next nine months and expectations of further reductions in late 2003
in response to the reduction in the demand for power generation
equipment.
The announced employment reductions will occur primarily in the
turbine production facilities of its Energy Products business where
the volume of U.S. orders and shipments of gas turbines is forecast to
decline by 80 percent or more over the next two years. The reductions
are expected to occur through a combination of early retirements,
attrition and layoffs.
The past four years have seen unprecedented demand for gas
turbines, particularly in the U.S. Although orders and shipments of
turbines and generators will be lower, GE Power Systems anticipates
operating profit growth of more than 20 percent a year in its Oil &
Gas and Energy Services businesses.
Power Systems is moving aggressively to realign our cost
structure and reduce our resources primarily in our power generation
business. As we adjust to a changing U.S. marketplace, we will
continue to fulfill our customer commitments, said John Rice,
President and CEO, GE Power Systems.
We have always made it clear that, after several years of
exceptional growth, our turbine business would at some point return to
more normal order levels, and it is, Rice said. The rapidly changing
business environment has caused our customers to re-evaluate their
needs, and we are adjusting our cost and capacity accordingly. At the
same time, we are preparing for excellent opportunities for growth in
our Oil & Gas and Energy Service businesses. Energy Services, for
example, will benefit from the near-doubling of the installed base of
GE heavy-duty gas turbines over the past four years.
Specifically, the business intends to reduce its workforce with
primary impact of approximately 1,000 in Greenville, SC; 1,000 in
Schenectady, NY; with additional reductions across other Power Systems
locations. Some of these workforce reductions are expected to be
handled by eligible employees electing early retirement options.
As part of its restructuring, Power Systems also plans to move
generator-manufacturing operations from Pensacola, Florida to
Schenectady. Concurrently, GEPS will begin producing a new product
line - wind turbine blades - in Pensacola for GE Power Systems' wind
energy business (GE Wind Energy).
The wind power industry offers tremendous opportunities for
growth and continued technology development and is an example of how
Power Systems is committed to expanding its portfolio of products and
services to better meet the needs of the energy industry, said Rice.
While it monitors and assesses the impact of the global slowdown
in the power generation equipment business, GE Power Systems will
continue to work with customers to determine short- and long-term
needs. However, the business anticipates that further workforce
reductions in Energy Products will be necessary later in 2003 as
volume continues to slow.
Employees affected by layoffs will receive long-lead notices of
reduction in accordance with company practices, legal requirements,
and where applicable, negotiated agreements with unions. In addition
to layoff benefits, transition assistance, benefits counseling and
special placement programs will be made available to help employees
find new jobs and improve job skills.
GE Power Systems (www.gepower.com), which employs 36,500 people
worldwide, is one of the leading suppliers of power generation
technology, energy services and management systems with 2001 revenues
exceeding $20 billion. Based in Atlanta, Ga., GE Power Systems
provides equipment, service and management solutions across the power
generation, oil and gas, distributed power and energy rental
industries.
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CONTACT: GE Power Systems
Employee Communications & Public Affairs
Jan Smith, 518/385-3072