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GE axes 1,500 in Erie
Wow…better get that dead horse out so I can continue beating it.
Any layoffs in Alliance, TX? They are producing locomotives for almost 20% cheaper labor costs, due to the different pay structure between the 2 facilities.
Philip, the Erie workers should be outraged at Mr. Slawson since they are making 240 % more than the average worker in Erie. Now their union contracts are becoming albatrosses.
Mr. Bates: So you are saying workers should be outraged at the union for negotiating a certain pay scale with the company (meaning the company agreed to it at the time), when the company then chooses to move the work to a lower pay area (aka Texas)? Are you suggesting that if the workers in Erie hadn’t tried to negotiate the best pay they could, but been thankful for whatever the Company Boss handed them, the work wouldn’t go away?
BTW, I wouldn’t shout too many “hurrah’s” down in Texas. China is even lower cost and they are itching to get into the US rail market. The rush to the bottom goes on…
One of the Chinese firms has landed an MBTA order for rapid transit cars-and will be constructing an assembly plant in Springfield, MA.
As for Chinese locos, export orders for New Zealand and Pakistan haven’t fared very well in service. Pakistan now has a order in with GE. To be built in Erie ???
All I know is it will be very hard to find a job anywhere that pays that much in this economy. You tend to get use to living on a steady paycheck and bam! The bottom falls out. This will hurt a lot of folks on down the line. Hey pres, since you have back slid on just about everything else you have promised, what are you going to do to stop this snowball effect?
And of course the back story is that GE employs several hundred people whose sole job description is to work to avoid USA taxes, every year.
Good on Mr Jonasson for his comments. If the Erie workers agreed to a 24% cut in pay, GE would pay the workers in Texas even less. It’s called “the race to the bottom”.
One factor that has been overlooked is the reluctance of the class I railroads to purchase Tier IV equipped locomotives. NS is buying mothballed SD70’s and bringing them back to life, along with older model SD’s. CSX is refurbishing some of their own locos as well. Other railroads have “stocked up” on Tier III locos. This is no coincidence. Engines that are Tier IV compliant burn more fuel and most if not all require DEF fluid to meet emissions, not to mention the expense of replacing one of these newer engines. I work for a local farm equipment company and a replacement engine for a 10 year old combine runs around $15-$20k. Now, a IT4 or Tier IV engine replacement can be anywhere between $40-$60k, and these are a tenth of the horsepower (or less) of a locomotive. Railroads are going to hold off as long as they can from purchasing new locomotives. Longer the time period, more the technology will improve with these new engines, and bugs get worked out.
Hateful. The veteran workers in Erie helped transform GE from an also-ran to EMD to leader. Now greedy GE moves to Texas, a right-to-work-for-less state. Thanks to all the men and women who helped make GE great. NOT. More cash for the bean counters and the over-priced MBAs who care nothing about the rails.
GE’s business is not weak nor is the overall economy slack; " . . .a depressing few months" is their excuse. Rather, GE had other places now to build its motive power offerings and is going to send all orders to those places. Too, it may hope to sell its Erie real estate for some sort of cash bargain post-toxics remediation.
“To hell with Erie” is the corporate attitude this mega-corporation is saying to a community and the nation. I think GE builds great locomotives, but its corporate attitude sucks.
Everyone is accusing either the “greedy management” or the “greedy union,” but nobody seems to have bothered to read that orders are actually down. The big roads have thousands of locomotives in storage due to huge drops in oil and coal shipments by rail. Nobody is spending $$ on shiny new, very expensive locomotives in North America at this time. A huge layoff like this is devastating to the community where it occurs regardless.
Mr. Horner, You have made some very salient comments. For example-NS in the past 12 months have traded/bought all of CSX’s SD80MACs (and they sent 100+ SD40-2’s to CSX in return) plus they bought all of BNSF’s old Sante Fe SD75’s, so NS is set under Tier 3 for years to come with both those 5k and 4.3k HP locomotives, resp. I imagine CSX will use the 100+ NS SD40-2’s for another decade, so, neither NS or CSX will be buying “new” in the next decade or so. Throw in the downturn in coal, energy orders, etc…and it doesn’t take a genius to see why GE will have have to cut back on production of new loco’s and thus layoff workers. For those trying to assign political skulduggery (right-to-work, etc…) are missing the big picture on this.