By Michael Roknick
Herald Business Editor
NORTHWESTERN PENNSYLVANIA —
General Electric Transportation said Tuesday it will cut up to 950 jobs at its Erie plant, but its Grove City locomotive engine operations are not affected.
The jobs cuts in Erie come as the company is shifting production to a lower-cost, non-union plant in Texas. GE said the cuts are part of cost reductions throughout its transportation unit because of lower order and production volume within its locomotive and mining businesses due to decreased demand for coal.
Part of the reason for the downturn is historically low natural gas prices, making it attractive for industrial users to switch from coal to gas.
Production of GE’s Evolution Series locomotives and certain off-highway vehicle manufacturing will be moved from the Erie plant to the new Fort Worth, Texas, plant and other third-party suppliers.
GE indicated the blow to jobs in Erie could be softened because the decision is subject to a 60-day bargaining process with union leaders. The plant is represented by International Union of Electronic Workers/Communications Workers of America Local 506. In all, the Erie plant employs 5,500.
Jobs will begin to be transferred to Texas in October and will continue through 2014. Since 2011, GE has spent about $140 million upgrading the Erie plant and has added 1,000 jobs in that time. Production at the Texas plant began in June and it started building locomotives in January.
“GE takes these bargaining periods seriously and we hope to begin discussions with union representatives immediately,’’ the company said in a news release.
Gov. Tom Corbett issued a news release Tuesday afternoon saying he was deploying a rapid response team through the Department of Labor & Industry to assist any displaced GE workers.
“The state will stand with our workers and help them move forward as best as we can,” Corbett said.
GE’s locomotive engine plant in Grove City is non-union and over the last two years has undergone $72 million in expansions and upgrades. The company bought the former Reynolds packaging plant in Pine Township which will handle engine remanufacturing. Both the expansion and upgrades will continue through 2014.
Since the expansion began, GE has hired about 100 workers for the Grove City operation. When the expansion is completed, the company’s local employment is expected to be nearly 1,000. The company is the largest manufacturer in Mercer County.