The Erie Times-News reports that the cuts will affect nearly 600 union jobs, but that the manufacturing facility will remain open for other projects, including prototyping and making spare parts for locomotives.
In a statement to media, GE officials pin the cuts to a downturn in freight traffic and a global market for their products.
“Given these market realities and the need for cost competitiveness across our global markets, GE Transportation announced its intent to transfer production of locomotives and kits for international customers to the GE Manufacturing Solutions facility in Fort Worth, Texas, from Erie, Pa. This move is necessary to drive efficiency, better compete in the increasingly competitive global rail market, and preserve U.S. jobs,” according to the statement.
The decision to move locomotive production south was especially hard news for the members of Local 506 of the United Electrical, Radio and Machine Workers of America. Union President Scott Slawson tells Trains News Wire that the employees were informed of the decision at the plant at 9 a.m.
“There is a lot of anger, frustration and fear,” Slawson says.
The news was especially frustrating because Slawson says the employees there have worked tirelessly to increase production. He says the decision to move locomotive production south is part of a national trend.
“This seems to be a trend in corporate America where big businesses keep chasing after lower wages and when they can’t squeeze anymore out of their employees they just pick up and leave town,” he says.
In a follow-up interview with Trains News Wire, Deia Campanelli, GE Transportation’s chief communications officer, says that while finished locomotive production ends, the company’s association with Lawrence Park will continue.
If GE’s proposal moves forward, “…it would transform the Erie campus to focus on design, development, engineering, and producing prototypes. We’ve made significant investments in the last five years to put it on that path, and if the transition if goes forward, there will be more investments along those lines,” Campanelli says. “The Erie facility will continue to prototype and produce for various components — alternators, grid-blowers, controls systems, and more. Even if this goes through, Erie will still be the largest location for GE Transportation. We’ve been there more than 100 years, and we plan to be there many more.”
According to the Erie Times-News, Pennsylvania labor union members have a 60-day window to bargain further with GE over the ultimate disposition of the jobs at Lawrence Park. The total number of displaced workers may ultimately be far fewer than the 575 the newspaper mentions. Until then, GE’s announcement remains a proposal, the company says.
The locomotive plant in Lawrence Park was originally part of a surrounding Pennsylvania township where GE built a manufacturing plant in 1910, according to the Lawrence Park Township website. By 1913, the industrial giant began building homes for workers in a model community. At a recent production peak in the early 2000s, more than 5,000 union and salaried employees worked at the facility.
Employment in Fort Worth will increase from about 600 workers to 800 if GE’s proposal goes through, Campanelli says.
Some of those added Fort Worth workers will likely be those employees who were laid off earlier this year. Campanelli says that about half of the employees that may be laid off from the Pennsylvania facility are retirement age or are retirement eligible. Most of the other employees will be eligible for “preferential treatment at jobs at other GE facilities, placement assistance, severance packets, and continued benefits.”
Campanelli also contrasted the Fort Worth plant with Lawrence Park, calling the Texas location a “highly flexible facility” and said that it will possible to expand or remodel the grounds to increase production or build locomotives for the international market, though the company doesn’t have any specific plans to do so at this point.
In Fort Worth, economic development officials met the news of possible layoffs in Erie with cautious optimism. Bill Thornton, president and CEO of the Fort Worth Chamber of Commerce says if the jobs transfer goes ahead, it will be “terrific news.”
“GE is one of the most admired companies in the world, and we would be proud to become the global home to their locomotive manufacturing facility. Their presence during the past six years has greatly enhanced our dynamic manufacturing and distribution sectors,” Thornton tells Trains News Wire. “GE’s proposed manufacturing relocation is a testament to the Texas business climate of low taxes and reasonable regulations, and a youthful and skilled workforce.”
Ray Grawbowski, president of the Lake Shore Railway Museum in North East, Pa., about 10 miles north of the GE plant, says his organization’s members were “shocked and saddened” to learn about GE’s pending locomotive production cuts. The museum has a long-standing focus on preserving General Electric locomotives and railroad equipment.
“Lake Shore Railway Historical Society will continue to preserve and develop its ‘Locomotives That Dad & Grandpa Built Collection’ at its museum in North East,” Grabowski tells Trains News Wire. “We will continue to honor ALL the women and men, both past and present, of this community through our collection.
“Our thoughts and prayers are focused now on all those who will be negatively impacted by this decision as well as on the whole Erie Community which will most certainly be impacted.”
Trains News Wire will update with further information as it becomes available.
See the Erie Times-News story online.
UPDATE: Statement from GE Transportation and information from Lawrence Park Township. July 27, 2017, 9:45 a.m. Central time.
UPDATE: Comments from Ray Grabowski; information from Bloomberg. July 27, 2017, 11:44 a.m. Central time.
UPDATE: Additional comments from GE Transportation; Fort Worth Chamber of Commerce; new headline.
CLARIFICATION: GE workers near Erie, Pa., will continue making prototypes, spare parts, and other components for locomotives while finished locomotive assembly and kits for international customers moves to Fort Worth, Texas. July 27, 2017, 3:08 p.m. Central time.
UPDATE: Comments from Scott Slawson of Local 506. July 27, 2017, 3:31 p.m. Central time. Updated bylines.
Don’t worry, Erie, the man you voted for president will ride in on his white horse wave his cheeto stained tiny hands and not only save the 600 union jobs , just as he did for all the Carrier employees in Indiana whose jobs he miraculously rescued , as well as the thousands of Coal Mining and Steel Mill jobs in Central Pennsylvania and west Virginia. SO don’t worry about losing your health care, unemployment benefits, food stamps, etc you guys will be on easy street thanks to your president, because we all know he is all gung ho for high paying union manufacturing jobs.
We’re witnessing the final stages of industrial unionization in America. The only union jobs remaining will be in the defense industry and in federal, state, and local venues supported by pliable taxpayers. States with closed shop laws such as many in the northeast will suffer economic chaos……witness Connecticut’s present situation. Robert McGuire”s comment below speaks volumes.
DANG!
OK, so who is to blame? Not only GE.
1. The Government. United We Stand, Divided We Fall. The classic motion picture with starred Jimmy Stewart, “Mr. Smith Goes to Washington” pretty well sums it up. Politicians have become so self-centered they have forgotten the hard working men and women who voted for them in the first place. They have permitted themselves to be bought by the billion dollar Wall Street crowd and lobbyist who are only interested in personal financial gain and have absolutely no feelings much less respect whatsoever for the working class citizens of the nation where they live. What is the annual salary of a politician? The current minimum wage in the wealthest nation this planet has ever seen is a disgrace to the human race!
The solution: Send these dirty no good low life degenerate scumbags to Gitmo for extended Waterboarding treatment. Since they were born with water on the brain to begin with might as well complete the job and get’em wet all over!
2. Labor Unions: Union leaders became lazy in the 60s and began to demand unrealistic wage increases and gave the working class a snow job making them look as if they were working hard in the interest of the members but in reality were hardly working at all, while maintaining a self-centered attitude at the same time, stuffing their pockets with plenty of cold cash thanks to the loyal dues paying members.
The OTHER side of the coin: “OK boys, I got you that nickel wage increase so be sure and vote for me come next election” while thinking all the time….gads, what a bunch of suckers! The result was the begining of job reductions and corporations who made the decision to relocate their operations to the right-to-work states in the South that didn’t have a law requring workers to belong to a union. Not to forget that these states levied lower taxes which in turn inceased their profit margin at the same time.
It was a win-win situation for the manufacturers except for the states up north who couldn’t compete with the favorable weather conditions in the South and as a result helped increase the area which became known as the Rust Belt.
Item: The dawn of the 60s also saw the railroads having to compete with the motor carriers. The Interstate highway system was increasing weekly which made it easier for truckers to deliver or pick up goods and provide dock to door service or vice versa. There was no way the railroads could compete as long as they were forced to maintain rules and regulations left over from the steam era.
A dramatic move to modernize operations to eliminate maintenence facilities and the firemen off of diesels was rejected by the labor unions representing employees on the Florida East Coast Railway in Florida. This became known as Featherbedding and led to a nasty strike on the FEC. When trains and tracks were dynamited the FBI was called in to restore peace. In the end, the FEC won, and the trend to eliminate outdated jobs, rules and regulations spread to other railroads.
3. ICC: Though there were several isolated railroad mergers before the 60s they mostly involved the elimination of subsidiaries. The primary example being what many experts consider to be the beginning of the modern merger movement is the 1957 “merger” between L&N and NC&StL.
The merger movement continued and now in Century 21 there are fewer Class One carriers which as a result have eliminated the number of locomotives as well as equipment, e.i. cabooses, which in turn have dramatically reduced the orders that the builders receive fom the railroads. This in turn automatically has reduced the builders work force as well.
Item: Regional and shortline railroads purchase reconditioned pre-owned locomotives and equipment for the most part and as a result has seen a continued growth in recent years of this market in the industry. No doubt there’s a good chance that there wlll be new job openings in many of these shops for displaced or laid off qualified GE employees. True, though wages will be lower than what they were at GE, they’ll still be higher than drawing minimum wage. Most of the shops offer benefit packages for their employees as well so all won’t be lost.
4. Globalization: Corporations have moved millions of jobs out of the US in recent decades. Both states and labor unions are partly to blame as is the govenment by permitting many manufactured goods to be made outside of the USA and brought back into the country with no import tax or duty whatsoever. NAFTA has dramatically hurt the American worker below the belt while “elected” publc servants in DC have stood by and undertaken absolutely nothing to defend the men and women who voted for them. Not to mention the billion dollar salaries and million dollar bonuses that the CEOs collect when they reduce the work force at home in good old USA!
What, Me Worry? Hell no, why should so much as one of them worry? Each one functions in non-functioning jobs, own big fancy homes, drive big expensive vehicles, and make billions and billions of $$$ (money stolen from the taxpayers) each month and have turned their American dream into reality while millions of hard working men and women continue to struggle on a daily basis. Many are forced to work two or more jobs for unrealistic minimum wages in Century 21, and sad but true, thoudands have lost their homes thanks to crooked bankers and real estate sharks. If that’s no enough, they still can’t make ends meet. Disgustingly, not one shyster banker, real estate shark, or politician has been scentenced to prison for their damn dirty unhuman deeds to this day!
God Bless America? Hell no, God Bless Goldman Sachs….don’t forget, they run DC too!
Have a Mighty Nice Day y’all!
Texas is a hard core Right to Work and At Will employment state. You get fired for any reason or no reason at all. In GE’s other statement about the moves it states “The average wage at PA is $30 an hour but the starting wage in Texas is $17 an hour. So they did a comparison that is not a comparison. The big thing for Texas is companies do not get taxed on inventory. As for living there all the taxes they have will eat you up. My company moved to Irving Texas years ago and two years before the move several of us checked it out completely. They have all sorts of hidden taxes that no one talks about. You can live a 6 pack away and get something cheap or live nearby and pay a lot more.
Peter Stevenson Texas is in the us. Moreover the cost of living in Erie is low. No doubt this is about wages and work rules
I read the business press regularly. The economic situation in the U.S. isn’t to bad but there is one drag and that is that wages are not going up. The transfer of manufacturing capacity from Erie to Texas, where employees will make less money, is a good example.
Paying employees less is bad for everybody.
Michael Jordan, we in the south (many of us anyway) don’t see it quite that way. I for one recognize there’s a balance between the ability (or willingness of) even the biggest companies to survive and hire people, and how much the employees get paid. Push either too far and there won’t be any jobs at all. Things can always still be done the old-fasioned way, the way that requires more employees, but they’ll likely get paid less, especially all other things being equal. There’s only so much of that the big corporations will put up with, this GE move being a case in point. The other option is to start your own business that does things the way you feel appropriate in regard to treating employees well. Unfortunately, the increasing volume of regulation that supposedly helps the employee makes that difficult. If there’s another alternative, I’d love to hear it.
If locomotive production eventually leaves the US, we will have moved ever closer to becoming an import-only country. The market for skilled positions in America will continue to dry up and move elsewhere. President Trump talks a good game when it comes to bringing jobs back to our shores, but reality says otherwise. The best bet for a good paying job in the future is to become a non-union tech in robotics.
From a business standpoint, it probable makes good sense. But from a social standpoint, its a sad state of affairs. True, the cost of living in much cheaper in the south, but good union jobs in the north prop up the pay in the right-to-work states. But when those are gone, pay in the other places will slide. Eventually, there is not going to be much of a middle class. These big companies are going to keep beating down the work force and the fact that southern people don’t seem to want to organize to get themselves a fair representation is only going to exacerbate the problem. I suspect most money saved on this deal will go to executive bonus
Almost everyone knew the Ft Worth plant would spell the end of loco production in Erie. To much difference in cost for it to remain in Erie.
AMAZON SMILE, SCHOLARSHIP AMERICA, and GREATERGOOD.COM
This is the great globalization LIE coming home to roost. When NAFTA was being debated, we were told that our low-cost trinket manufacturing would pretty much go to foreign countries, but we were to make up for that by having ‘sophisticated’ jobs here building the more complex products for the rest of the world. NAFTA was supposed to bring us MORE jobs building these marvelous machines that came from 50+ years of American ingenuity and engineering perfection. But the HUGE LIE was that was never planned to be a long term thing. Soon, we converted the loco assembly process into a kit, and then built GE locomotive factories in Brazil and India to assemble such ‘kits’. Now, people who were not involved in the development through 50+ years of trial and error are now assembling these ‘kits’ for foreign GE customers. The factories in these other countries were given access to our intellectual property to copycat and eventually steal. We here in this country who made the ‘sweat equity’ investment got railroaded but good.
GE used to be an American company. It is no more. This country has fallen a long way from the WWII era when automotive manufacturers changed over to tank production, and water heater manufacturers changed over to building bomb casings, and when textile manufacturers switched over to making military parachutes all to support THEIR COUNTRY in the war effort. Today, companies like GE have no country, they have no loyalty to places or nations. They call that an improvement (yea, right)
GE is a global corporation building locomotives for many different countries railways. They can manufacture locomotives anywhere in the world. Wouldn’t surprise me if in the not so distant future they shift all locomotive production out of the US.
A number of years ago I was able to tour GE – Erie. Even if GE paid the people in Fort Worth the same wages and benefits, it would still be cheaper to operate than the Erie plant. Parts of the Erie plant date to the early 1900s and is spread out in a number of buildings and multiple floors. Lots of moving of components between buildings during the manufacturing process. I was there in the summer and I can imagine the cost of snow removal to keep things going during the winter would be a factor as well.
I suspect that another factor is that we will never see the volume of locomotive production as we saw in the past. Now we have two big AC locomotives pulling trains that used to require four DC units. Also the cost to make locomotives meet the EPA Tier 4 standards is making some roads look into rebuilding older units instead of buying as many new locomotives in the past.
Charlie Powell
Its also the downturn in railroad business. The railroads are saturated with locomotives, with thousands in storage. If you already have that many, there’s no need to buy more.
As far as non-union states, there is no such thing. Workers at facilities can vote for union representation at any time. If the employer offers decent wages, benefits, and hours, then the employees stay happy and are less likely to ask for a union.
From the corporate viewpoint moving makes sense. Taxes and labor costs are a huge factor.
anything to avoid paying decent benefits and wages. the move to Texas was because they are a NON UNION state.
Ahhhhhhhhh poor ge.This poor company sounds like they are trying to be chicken little.No guys the sky is not falling to the contrary.Hard to feel sorry for this company when Caterpillar is still #2 in locomotive sales behind them still.Do not see NS,CSX,BNSF,CP.CN.KCS.UP running to Electro Motor Diesel to order hundreds of locomotives the way these 7 class ones do with General Electric.So its hard to feel sorry in General Electric in anything
I am not sure about locomotive manufacturing, but automation has meant that fewer workers are needed to make things. The next big revolution in the economy and society will be artificial intelligence.
There are probably many reasons for this move but the biggest are the union and government. The milder weather in Texas is part of it and the old facilities in Erie are another factor but instead of building the new plant in Fort Worth they could have moved farther out of the city and built a modern manufacturing facility all on one floor to streamline the process. The better business climate in Texas and the lack of union oriented workers are the biggest reasons I suspect. It’s not so much the benefits and wages but the onerous work rules that drive these companies out. I worked at a paper mill in Maine and witnessed these ridiculous work rules. Now the mill is out of business (and torn down) and 4,000 workers are out of good paying jobs because of union greed. Lynn, Massachusetts lost out on a big manufacturing plant a few years ago because the union came in and started dictating how things were going to be so the company said “screw you” and built the plant somewhere down south. This will continue until the unions smarten up and realize they have to partner with the companies so that everybody wins.
Somebody must have forgotten to as the “Donald” if it was OK to shut that plant down.
As a Pennsylvania resident, it saddens me the state losing more jobs, good paying jobs the state needs. Governor Wolf are you watching?
Just another part of a nationwide trend…..Manufacturing is moving to the south thanks to lower taxes.
Just a matter of time before GE sends locomotive production to China or Mexico.
The United States is truly a dying country as well as a lost cause.