Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, February 26, 1992 TAG: 9202260053
SECTION: BUSINESS PAGE: A5 EDITION: METRO
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: LENGTH: Medium
GE REPORTS $58 MILLION IN COSTS CUT
General Electric Co. saved $58 million last year because of improved productivity at its Drive Systems plant in Salem, according to a report released Tuesday."Significant progress" was made by reducing $30 million in materials costs and $28 million in controllable expenses, general manager Tom Brock reported at the plant's annual business review on Monday. Many of the plant's 2,000-plus employees attended the session at Salem Civic Center. The meeting was closed to others.
Employees throughout the plant "have helped fuel positive performance despite the recession's impact on orders and sales," Brock said.
Last year's plant sales and earnings, which were not reported publicly, equalled the record results in 1990, according to Roger Farley, the plant's human resources manager. But last year's savings were higher than in 1990, Farley said.
Brock's comments and presentations by teams of employees described the plant's efforts to weather the recession while continuing improvements that the company says are needed to compete in a global marketplace.
The Drive Systems department can ensure employment stability and business growth only "by continuing to do much better than the industry in improving productivity and reducing costs in the business," he said.
If productivity is dramatically improved, Brock said, the plant will do a much better job of reducing costs than its competitors and its sales volume will increase. That means stable employment or a need for more people "and the plant and everyone in it can prosper," he said.
Nobody's job will remain the same, he said. "All jobs will constantly change as we find better ways to do things."
Brock said key challenges for all employees must be to get the right material to the right place at the right time; to eliminate doing things twice; to make information accurate everywhere; to be paranoid about eliminating waste and inefficiency; and to provide recession protection by cutting costs and increasing customer service.
Employee teams gave a series of examples of cost savings last year. A card-room scrap team met a goal of reducing scrap costs by $300,000. A travel and living expense team reduced costs to $282,000 below its target and set a goal of cutting expenses $1 million this year.
Another team eliminated 650 of 960 flat ribbon cables and more than 1,000 of the 1,422 random cable variations used. A 48 percent increase in turbine control sales was credited to a new structured product and repackaging of technology.