(The Associated Press distributed the following article on December 6.)
ERIE, Pa. — Erie County’s largest employer, GE Transportation Systems, is merging with another, larger unit of parent General Electric Co., officials announced.
By Jan. 1, the Erie-based locomotive maker will merge with GE Aircraft Engines of Evendale, Ohio, into a new unit known as GE Transportation.
GE officials said the reorganization shouldn’t cause any significant changes to employment or operations at the Lawrence Park locomotive plant, which has headquartered GE’s railroad division since 1911.
“If it means changes, it’s all upside,” said Patrick Jarvis, a spokesman for the locomotive operation. “It makes us more efficient. It makes us more understandable to our customers.”
The change puts GE’s land, air and water transportation businesses under one umbrella.
GE Aircraft Engines, which makes engines for civilian and military aircraft, is the larger of the two businesses, with 26,000 employees and annual sales of $11.1 billion. The Erie company makes locomotives and motorized drive and propulsion systems, and employs about 8,000, with sales of $2.3 billion dollars last year.
The railroad business in Erie will be renamed GE Rail and be a division of the larger transportation unit to be headed by Dave Calhoun, the current chief executive of GE Aircraft Engines. Calhoun formerly headed the Erie locomotive operation from 1995 to 1997.
“I’ve always liked being the global headquarters for GE Transportation,” said Jake Rouch, chief executive of the Erie Regional Chamber and Growth Partnership. “Now I’m worried we’ll be a division of GE Transportation.”
But Rouch said the change could bring other parts of GE’s business to Erie, other than locomotive manufacturing, because GE has made strides in remote diagnostics, e-business and supply-chain management at the Erie facility.
“Our philosophy going into this is that this is an opportunity for Erie,” Rouch said. “We’re very excited Dave Calhoun is involved with this. He is someone who knows Erie and knows the business.”
Business has been improving at the Erie locomotive plant in recent months.
In a slowdown announced in January 2002, GE officials said that as many as 900 jobs might be cut, but that massive layoff never happened. After negotiations with the union representing plant workers, only about 130 jobs were cut last year. And a late-year increase in locomotive orders has caused GE to hire 200 union workers since October to keep up with demand.
Jeff Immelt, CEO of Fairfield, Conn.-based General Electric, was upbeat in an e-mail to employees explaining the reorganization.
“Change can be unsettling, but embracing change is part of the DNA of GE and our people,” Immelt wrote. “I want you to know that this isn’t about reshuffling the deck or creating new bases of power or bureaucracy. It comes down to this: GE’s mission is to innovate to help customers succeed.”