UPDATE: GE to shift locomotive assembly to Texas

Plant in Erie, Pa., will remain open for prototyping locomotive parts and other projects
RELATED TOPICS: EAST | LOCOMOTIVES | LABOR RELATIONS | SUPPLIERS
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A GE Transportation sign in front of the main entrance to the company's Lawrence Park, Pa., locomotive plant on July 27. GE officials announced on Thursday that all locomotive production in Pennsylvania will be moved to Fort Worth, Texas, by the end of 2018.
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ERIE, Pa. — GE Transportation officials confirm that they will end locomotive kit and finished locomotive assembly at their Lawrence Park, Pa., plant by the end of 2018.

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.

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