Category Archives: General Electric

General Electric Rethinks Locomotive Assembly

AssemblyMag

A year ago, I wrote an article about General Electric Co.’s long history of producing locomotives. Since then, a lot sure has changed.

Once-proud GE is in a tailspin these days and is eager to sell or spin off some of its vast holdings. Many Wall Street analysts believe the GE Transportation unit will be the first to go.

The company also recently announced that it would cease production at its legendary manufacturing complex in Erie, PA. However, that move was not a complete shock. The factory’s demise has been rumored for several years—especially ever since GE Transportation opened a new state-of-the-art facility in Fort Worth, TX, in 2013.

And, to keep up with global demand, GE has invested in factories in Brazil and India. For instance, the company just unveiled a moving assembly line at its locomotive plant in Contagem, Brazil.

“Unlike traditional stationary production lines, the mixed-model line is designed for employees to assemble different locomotive configurations on the same line as the units slowly move down the track,” says Afonso Borges, industrial director at GE Transportation. “This new production system enables the plant to increase productivity and optimize the workforce, as well as reduce lead time and inventory.”

The assembly line moves between 1.15 to 2.20 meters per hour, depending on takt time. It cuts lead time by 20 percent, reduces inventory by $2 million and eliminates more than 10,000 square feet of space on the plant floor.

To address lean manufacturing initiatives, the new production system also provides real-time visibility to the various manufacturing stages. Borges says this “fosters a problem-solving culture among the employees to quickly resolve issues as they arise. This attribute makes the line ideal for digital monitoring.

“The mixed-model moving line was born connected,” adds Borges. “Several sensors have been installed to show the progress of all locomotive manufacturing steps, so delays, problems and other data are visible in real time through software developed to manage the line.

“The moving assembly line also means workers immediately flag any problems that arise,” explains Borges. “Issues are more visible now because they stop the line, so we are aware of them very fast. It helps us fix issues quickly, and it means we’re producing a higher-quality product because we know as soon as we have a problem.”

To see a video about the new moving assembly line, click here.

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General Electric’s slow demise

Fox Business

 Jack Welch hand-picks Jeff Immelt to be GE’s next CEO

In 2001, Jeff Immelt, who once ran GE’s Medical Systems business, beat out two of his colleagues for the coveted spot: Robert Nardelli, president and CEO of GE Power Systems, who went on to lead Home Depot (HD) and James McNerney, head of GE Aircraft Engines, who later led 3M (MMM) and then Boeing (BA). As FOX Business reported, Welch is on fire over the state of the company today, while Nardelli told FOX Business he is “heartbroken.”

Financial crisis slams GE, Buffett to the rescue

The financial crisis of 2008 rocked many CEOs, and Jeff Immelt was no exception. GE Capital, the finance arm of the industrial giant, then accounted for nearly 40% of company profits. As investors dumped banking stocks en masse that October, GE was caught in the fray. Immelt struck a deal with billionaire Warren Buffett’s Berkshire Hathaway (BRK.B), which invested $3 billion in the company, essentially extending it a lifeline. At the time, Buffett also offered his emotional support. “GE is the symbol of American business to the world. I have been a friend and admirer of GE and its leaders for decades. They have strong global brands and businesses with which I am quite familiar. I am confident that GE will continue to be successful in the years to come,” said Buffett in a statement.

CEO Immelt moves to diversify the conglomerate

During his 16-year tenure as CEO, Immelt diversified the industrial company. For example, GE whittled down its finance arm, GE Capital, to become a simpler enterprise. It also sold its appliance unit to Chinese manufacturer Haier for $5.6 billion. At the same time Immelt was pushing into areas such as the ‘Internet of Things’ and he also took a stake in oil giant Baker Hughes (BHI), as oil prices stagnated. His strategy irked longtime investors who feared GE was becoming too complicated. Even after Immelt’s resignation in June 2017, the strategy continues to dog the company. “We see no quick fix to GE’s problems as years of financial engineering, complex reporting and mis-aligned incentives are coming to bear,” wrote Goldman Sachs (GS) analyst Joe Ritchie in October 2017.

GE insider John Flannery named CEO

GE insider John Flannery, who led a turnaround at GE Healthcare, became the company’s 11th CEO following the resignation of Jeff Immelt in June 2017. He officially took the helm that August. Despite the familial changing of the guard, Flannery was inheriting a basket of issues, including whether or not the company’s generous dividend could be perserved. On the July earnings call, Immelt’s last, CFO Jeff Bornstein addressed the elephant in the room. “John and I are reviewing our capital allocation plan for the year. Dividend remains our priority,” he said. Investors were skeptical — and rightfully so — as the dividend got slashed that fall by 50%.

GE slashes dividend, crushes investor base

In efforts to conserve capital, GE cut its dividend in half last November, an upshot of a broad review of the company under new CEO John Flannery. At the company’s investor day, Flannery promised to “Simplify + concentrate on GE of the future” as outlined in the company presentation.

GE’s Dividend Done…

Still, investors signaled they won’t wait around. Once coined the stock for widows and orphans, firms such as Morgan Stanley (MS) began removing GE from investment portfolios. GE also came under fire for having the second-largest corporate board among S&P 500 components, as reported by FOX Business.

 

 

GE cuts Schenectady workforce again

Schenectady Gazette

General Electric continued a yearlong series of workforce reductions at its Schenectady-Rotterdam campus with a new round of job cuts announced Friday.

Three sources at GE put the number of affected workers at 130, significantly more than in recent previous cutbacks. The company would not say how many people will be affected but said both professional and production workers would be laid off. This is a change from reductions made last year. In each of the 2017 layoffs, the company stressed no production workers were losing their jobs.

GE issued the following statement Friday:

“As announced last month, based on the current challenges in the power industry and a significant decline in orders, we plan to reduce our global headcount, affecting both professional and production employees. As part of these actions, we are restructuring our production capacity in Schenectady. This action is difficult and does not reflect the performance, dedication and hard work of our employees. GE will be providing a comprehensive severance package to impacted employees, including transition support to new employment.”

Many of the production workers in Schenectady are represented by IUE-CWA Local 301. Its business agent, Rob Macherone, issued this statement Friday:

“We are extremely disappointed by GE’s recent announcement to lay off up to 130 of our hourly union members. This will be devastating to both the members and their families impacted, as well as the community. It is disheartening that, despite our members’ hard work and dedication, they have to pay such a steep price for GE’s mismanagement while the ones responsible, such as [former GE CEO Jeff] Immelt are rewarded with lucrative severance packages. Our main focus right now is on supporting our members affected and continuing our efforts to preserve middle-class jobs.”

The most recent previous round of publicly confirmed cuts in Schenectady came on Nov. 30. A source within the company put the number laid off during that round at 75, though GE would not confirm that figure.

The firm did say approximately 4,000 people worked on the sprawling campus at the foot of Erie Boulevard. Those employees are a mix of professional, managerial and production workers from a variety of General Electric businesses, but the majority of them work for GE Power, which has its headquarters there.

The company has been struggling for years to increase profitability and reverse a long slide in stock value. The tempo and urgency of GE’s efforts have increased in recent months, with the arrival of a new CEO, John Flannery.

Flannery in November singled out Power as one of the three core businesses that General Electric would stake its future on, along with Aviation and Healthcare. But he also singled out Power as having deep financial troubles and said it would need to cut $1 billion in costs. GE Power announced last month that it would reduce its workforce by 12,000 worldwide.

Some other local GE workforce reductions in 2017:

  • In September, a source within GE said 15 to 25 low-level management employees were laid off. The company would say only that a “small number” of jobs were eliminated.
  • In March, a “very small number” of jobs were cut, the company said, but again it would not specify the cuts.
  • The most clearly defined round of Schenectady job cuts came in January, when another GE business — Current Powered by GE — reported 35 layoffs to the state Department of Labor, as required by the state’s Worker Adjustment and Retraining Notification process. The other GE layoffs in Schenectady apparently did not meet the requirements of mandatory WARN reporting.

No WARN notice has been posted yet for the cuts announced Friday.

Danfoss preparing for startup of power modules in NY

Utica, NY – Danfoss Silicon Power today welcomed the first employees to its Utica, New York facility — marking progress toward full operation of its silicon-carbide (SiC) power module production.

In March 2017, the company announced that it would establish production of SiC power modules in Utica.

Danfoss Power Electronics packaging facility at QUAD-C will advance New York’s leadership in next-generation semiconductor research, development, and commercial fabrication to meet the global demand for smaller, faster, and more efficient devices. This will expand the scope of the Nano Utica initiative from computer chip commercialization into power electronics applications for industrial products such as wind turbines, utility-scale solar inverters, data centers and electric cars. GE’s advancements in silicon carbide (SiC) technology play an important enabling role.

The company recently took over the Quad-C facility at the State University of New York (SUNY)’s Utica campus as part of a transatlantic collaboration with General Electric through New York Power Electronics Manufacturing Consortium (NY-PEMC). The private-public consortium and other similar programs were established in 2014 by the state of New York with a total investment of more than $20 billion USD for the creation of high-tech jobs.

General Electric to lay off 80 workers from Norwalk office

WTNH

More General Electric jobs are leaving Connecticut. The company says it is cutting 80 jobs from its Norwalk office, which will affect workers in its digital unit.

The layoffs are expected to begin January 30.

In 2016, General Electric moved hundreds of jobs to Norwalk from its former headquarters in Fairfield. GE moved its headquarters to Boston later in the year, and broke ground there on May 8.

It had called Fairfield home for 40 years.

Before the move was announced, Connecticut officials offered to purchase GE’s sprawling Fairfield campus so the company could move to a more urban area in state, possibly to Stamford, according to records.

Department of Economic and Community Development Commissioner Catherine Smith said she didn’t think the company took Connecticut’s offer seriously.

 

A Big Year For General Electric Shareowners: GE Store, New Focus, Great Ideas

PenneyVanderbilt

The LEAP engine, which took its maiden flight last fall, has 3D printed parts and components made from next-generation materials called ceramic composites.

GE’s industrial shift also brings benefits like the GE Store. “It means that every business in GE can share and access the same technology, markets, structure and intellect,” Immelt writes. “The value of the GE Store is captured by faster growth and higher margins; it makes the totality of GE more competitive than the parts.”

The GE Store allows the company to take FAA-certified alternators from its jet engines and use them to build better oil pumps. It can also use medical imaging technology to inspect subsea pipelines. “No other company has the ability to transfer intellect and technology as GE can through the Store,” Immelt writes.

GEPowersTheWorld

A group of analysts who recently visited GE’s research headquarters in Schenectady, N.Y., seem to get the point…

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GE, Caisse de Depot to buy Gas Pipeline From Morgan Stanley

General Electric Co. and Canada’s second-largest pension fund agreed to buy a 9,300-kilometer (5,800-mile) U.S. natural gas pipeline system from Morgan Stanley for an undisclosed price.GE Financial Services and Caisse de Depot et placement du Quebec will buy 111-year-old Southern Star Central, which operates the pipeline system that stretches across eight U.S. states and mainly serves Kansas and Missouri, the pension fund said in a statement Friday.

GEMeatball

Gas production in the U.S., especially in the middle of the continent, has surged as advanced extraction technologies allow producers to access hydrocarbons trapped in shale rock formations.

caissedepotmontreal

“For la Caisse, this is a high-quality asset that is strategically well-located,” Macky Tall, senior vice president of infrastructure at the Montreal-based pension fund, said in the statement.

With help from Penney Vanderbilt