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Press Release

GE Power Systems Announces Plans to Reduce WorkforceDue to Lower Equipment Demand

July 23, 2002

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.

--30--ks/at*

CONTACT: GE Power Systems

Employee Communications & Public Affairs

Jan Smith, 518/385-3072

[email protected]


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