The Herald, Sharon, Pa.

Business

January 31, 2009

‘High probability’ for layoffs in Grove City, GE official says

GROVE CITY — GE Transportation is projecting the company’s locomotive production will fall sharply this year and will almost certainly lead to layoffs.

In an address to employees in Erie earlier this week that was delivered by Webcast to other plants, Lorenzo Simonelli, chief executive officer of GE Transportation, predicted the company’s 2009 production will fall 44 percent to 485 locomotives, compared to last year’s 907.

Owned by General Electric Co., the Transportation unit operates the Grove City plant, which produces engines for locomotives, stationary power installations and the marine industry.

The plant in Pine Township employs 900.

Stephan Koller, director of communications for GE Transportation, said there is a “high probability’’ for permanent layoffs but added a 44 percent drop in locomotive production doesn’t mean a like-sized reduction in employees.

While the company has a backlog of 1,500 locomotives on order, much of that is slated for 2010 or later.

GE is working on a plan to cut costs and employees will be informed once decisions are in hand, Kollar said. He didn’t offer a timetable for when that plan would be rolled out.

Last week General Electric posted a 46 percent drop in fourth quarter earnings due largely to its ailing financial business, GE Capital.

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