Slowdown Forces GE Transportation to Lay Off Dozens

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GE Transportation confirmed another round of broad-based layoffs, which will occur over the next 30 days in Erie and Grove City, Pennsylvania.

While the company did not provide the exact number of people who will lose their jobs, the layoffs are expected to affect dozens of salaried employees. Before this round of layoffs, it was estimated that GE Transportation had about 1,400 salaried employees in Erie and a slightly larger number of hourly workers in the city, totalling about 2,900 local employees.

The terminations come just 18 months after the company (which is owned by General Electric Company) announced that it gave pink slips to 1,500 workers at the locomotive manufacturing plant in Erie.

No hourly or unionized employees were included in this round of cuts, but the reasons for these cuts are the same as the ones that saw the company gut almost half of the Erie plant’s unionized workforce in early 2015. Unlike layoffs on the union side, there is no recall list for non-unionized workers if business picks up later. Therefore, these new terminations are considered permanent.

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The train manufacturing business has been slow these days. A few years ago, the plant in Erie was building nearly 20 locomotives. Today, that number has dwindled to about two per week. And there is no guarantee that even this glacial pace will continue.

GE Transportation spokesperson Cathy Heiman said that the company does not reveal its anticipated production numbers. Heiman said, however, that a report which stated that the Erie plant would build 25 or 30 locomotives in the second half of the year was understating the actual numbers.

Commenting on the recent layoffs, the company said in a prepared statement, “This is a challenging cycle for the freight rail and mining markets.” North American freight rail volume dropped 4.5 percent in 2016, and 4,000 locomotives in North America are currently sitting inactive. The statement further said: “As a result, we’re taking employee actions to simplify our structure in line with volume expectations.”

Despite the slowdown and layoffs, GE Transportation remains profitable. The company earned $156.0 million in the first quarter of 2017. During that quarter, the company announced the sale of 22 new locomotives. This was noteworthy, as it was the company’s first locomotive order for a North American client since 2014.

Chances are good that there will be other job cuts at the company. Parent company General Electric announced plans in January to slash $1.0 billion in expenses from its industrial business over the next two years. That figure was revised in March to $2.0 billion.

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