GE cutting 12K jobs from Power unit to reduce structural costs

Verition Fund Management Has Decreased By $11.22 Million Its American Elec Pwr (AEP) Position; Asv Holdings (ASV ...

Verition Fund Management Has Decreased By $11.22 Million Its American Elec Pwr (AEP) Position; Asv Holdings (ASV ...

General Electric Co. said Thursday it was cutting 12,000 jobs in its power business, or almost 18% of the unit's workforce, as the conglomerate slashes costs and battles overcapacity in its core business.

"This decision was painful but necessary for GE Power to respond to the disruption in the power market, which is driving significantly lower volumes in products and services", GE President Russell Stokes said in a statement Thursday. In addition, new Chief Executive, John Flannery, is looking to streamline a conglomerate with stakes in sectors such as jet engines and medical imaging equipment. "It's one thing to put the tourniquet on, and it's another to redirect and create the path forward". The unemployment rate is 4.1%, the lowest in 17 years. While no facilities are expected to close in Switzerland, the company said the GE Power Conversion unit in Berlin and GE Grid Solutions in Moenchengladbach, Germany, would be closed.

GE stock was up 1% as of noon Thursday, but is down 44% year-to-date.

The near-20-percent job cut in the division that makes nuclear plant and electrical transmission components and steam turbines would contribute to a $3.5 billion cost-cutting exercise through the end of 2018.

"Unfortunately, we believe that these changes are necessary to ensure that we can remain competitive and secure the future of GE Power in the United Kingdom".

"Today's actions are driven by challenges in the power market worldwide".

ILLEGAL ACTIVITY NOTICE: "General Electric Company (GE) Shares Sold by Old Mutual Global Investors UK Ltd." was reported by TrueBlueTribune and is owned by of TrueBlueTribune.

The cuts, representing 18 percent of all jobs at GE Power, will take place largely outside of the U.S. Many will be in Europe, where other energy companies have already announced reductions. Power was the company's biggest division, with sales past year of $26.8 billion.

It added: "To get back to competitiveness GE Power needs to remove cost substantially from its businesses". Positions in France, however, will not be affected. Renewables will reap about two-thirds of $11.3 trillion in investment likely to flow to power plants over the period, the IEA said.

"The power-generation industry is experiencing disruption of unprecedented scope and speed", Lisa Davis, a Siemens board member with special oversight of the power-and-gas division, said last month. Mcdonald Capital Investors Inc bought 14,840 shares as the company's stock rose 3.16% with the market.

The power unit expanded considerably with the $10 billion Alstom acquisition, but the drawn-out deal has turned into a drag. He said the company anticipates those challenges continuing.

Changing habits have reduced the power that is consumed in most households, as has more efficient technology. Stokes was named head of GE Power in June, taking over from Steve Bolze, who left the company shortly after Flannery was named to succeed Jeffrey Immelt as GE's next CEO. GE has a significant presence in wind turbines, but the market is spread among several companies.

"In recent months I have met with representatives from both the company and the local workforce and I will continue to do so over the upcoming consultation period".

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