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GE to cut 1,500 at locomotive plant in Erie

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By Rick Stouffer
Wednesday, Feb. 11, 2009

General Electric Co. said Tuesday that it will cut the 5,600-person work force at its Erie locomotive-manufacturing complex by nearly 28 percent -- blaming the reduction on the recession, cost pressures and a 40 percent lower production volume.

About 350 of the 1,550 employees will be let go in mid-April and are considered permanents layoffs, the company said. The remaining 1,200 layoffs will occur in May and are temporary, lack-of-work layoffs that should eventually end. The company hired 2,000 employees in the past five years.

Reductions will be made through a combination of early retirements, attrition, restructuring and layoffs, according to a statement.

"The overall economic downturn is substantial, and we at GE Transportation are not immune to the global recession," said Lorenzo Simonelli, GE Transportation president and CEO, in a statement. "In order to stay competitive and ensure our future success, we must bring our cost structure in line with our current fulfillment needs and the softening global market."

GE Transportation had warned for weeks that cutbacks at its massive Lawrence Park complex could be coming, saying yesterday the permanent layoffs will affect 150 salaried and 200 hourly workers.

Work-force reductions, slated to take place over the remainder of the year, will affect workers at all GE Transportation locations, including its Grove City engine works in Mercer County. The complex makes engines for locomotives, stationary-power installations and the marine industry.

The company in late January said locomotive production this year would fall to about 485, compared with 861 locomotives built in 2008, and 907 built in 2007.

The work-force reduction is taking place, even though GE Transportation has a 1,500-locomotive backlog. More than 50 percent of those orders, however, are slated for 2010 and 2011 delivery, with many orders pushed back in time due to the worldwide recession, the company said.

General Electric has been a fixture in Erie for more than a century. The massive GE complex covers 350 acres and includes 14 buildings and 3 million square feet of manufacturing space.

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