Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, January 11, 1992 TAG: 9201110121
SECTION: BUSINESS PAGE: A-8 EDITION: METRO
SOURCE: GEORGE KEGLEY
DATELINE: LENGTH: Medium
GE'S JOB AX MISSES SALEM
General Electric Co. announced plans Friday to close a factory in Erie, Pa., a move that will shift production to its drive systems headquarters plant in Salem.The shift will add only about 50 salaried jobs to the local operations; but, more importantly, it lifts the threat of layoffs for GE's 2,100 Salem employees.
The change "is not expected to create many jobs in Salem," GE said. Positions that could transfer from Erie next year will be in sales, engineering and technical slots, according to Roger Farley, the plant's human resources manager.
Drive Systems General Manager Tom Brock told Salem plant union leaders the move assures that the local plant will have no layoffs. Moving the Erie product line of smaller-sized drives used in equipment such as cranes will stabilize employment at Salem and keep the business strong, Farley said.
In October, Brock told Salem employees the plant could face 300 layoffs by the second quarter of this year unless productivity increased and more waste was eliminated.
The main reason for the consolidation, GE officials said Friday, is that the Erie plant's 340 employees are working at only 30 percent capacity, while the Salem plant operates at 50 percent of capacity.
The Salem plant makes drives and automation systems for a variety of industrial customers worldwide.
Ed Kitas, product general manager at the Erie plant, said GE cannot maintain two underused facilities and remain competitive in global markets in the current business climate.
The Salem plant has the technical resources and production capacity to best meet current and long-range business needs, he said.
Because of the department's aggressive program of structuring products, "we do not see any need for additional manufacturing capacity in the future," Kitas said.
Brock said he regrets the job loss at Erie, but "it is critical that we seriously consider those business actions that could keep Drive Systems world-competitive both today and for the future."
Consolidation of the operations is to begin in six months and continue for a year afterward, the company said.
No hourly workers will move to Salem because the Pennsylvania plant has a different union, Farley said. The International Union of Electronic Workers represents hourly workers in Salem and the United Electrical Workers is the union in the Erie plant. The UE also represents hourly employees at GE's locomotive plant in Erie.
"We're glad to have work, but we hate to see the Erie employees lose their jobs," said Gerald Meadows, president of IUE Local 161 in Salem. Employment remains stable at the Salem plant, Meadows said. The IUE represents about 1,000 Salem employees.
Company management has been talking for some time about the continuing transition from hardware to less labor-intensive software, Farley said. "Had we not done this, there could have been layoffs," he added.
Salem employees "will have to work smarter and be more efficient," Farley said. Brock "is real encouraged by the teamwork and spirit" of the work force, he said.
Salem workers "don't want to go backward," Farley said. "Some people there have been laid off in the past and they don't want to go back out there."
The plant "is not problemless . . . [but] Brock is working very hard and the people believe him and they are really behind him," Farley said.
Efforts will be made to place Erie employees in other jobs, the company said. Those whose jobs are affected by a transfer of work will be eligible for early retirement, education and training options, individual placement and benefits counseling, Kitas said. Details are to be worked out with Erie employees in February.