Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 19, 1995 TAG: 9507190063
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER NOTE: Above
DATELINE: LENGTH: Medium
GE Drive Systems must reduce costs more than it already has in order to remain competitive in the global marketplace, GE Vice President Russ Shade said.
Professional, technical and clerical jobs - ranging from office workers to engineers - will be eliminated. No hourly production jobs will be cut at this time because of heavy workloads between now and year's end, Shade said.
Nonproduction employment at the plant stands at 1,200. The job cuts will reduce that figure by 8 percent. Total employment in Salem, including union production workers, is now 2,100.
GE spokesman Mike Allee said that no employees will get layoff notices for about 21/2 weeks. The company first wants to see how many workers will take advantage of a special early retirement offer or other voluntary departure programs, he said.
The early retirement program will be available to employees who are at least 55 years old and have 25 years with the company, Allee said. Normally, GE employees retire at age 60, he said.
Employees who are not eligible for early retirement may be eligible for the company's "lack-of-work" and "job-elimination" programs, Allee said.
For eligible workers who are laid off involuntarily, the company said it provides a benefit and "income-protection" plan that includes financial assistance based on length of service; education and training; job placement assistance; and medical and life-insurance coverage for up to one year from the date of the layoff.
The action comes a year after the plant's management told employees that GE Drive Systems had become the world leader in the manufacture and sale of computerized industrial controls and that the company had been driving its costs down faster than its competition. The plant had survived the last recession without any job layoffs. The most recent layoffs before Tuesday's announcement were in April 1988.
The business still is healthy and it would be wrong to characterize it any other way, Allee said. "We are positioning ourselves to ensure that we will continue to be a healthy business in the future," he said.
"While Drive Systems is healthy today, there are market and competitive trends that will significantly impact the business beginning next year," Shade said. "We must act now to protect our competitive position."
A market trend toward alternating-current drive products and away from the direct-current products traditionally made by GE is helping fuel the need for cutting costs as the company switches to new products, Shade said. "Market analysis indicates significant opportunity with AC technology while the DC market is shrinking rapidly," he said.
Allee explained that customers seem to prefer the AC systems because they are easier to maintain and, in some cases, cheaper to install.
There's a worldwide trend toward AC adjustable speed drives, said Fred C. Lee, director of the Virginia Power Electronics Center at Virginia Tech. While the AC systems can cost more, they are more economical to run, saving 30 percent of the energy needed to run a DC motor, Lee said.
Lee explained that half of the world's electricity goes to operate some sort of motor drive, predominantly DC fixed-speed drives. If the DC motors were replaced with AC units, enough energy could be saved to eliminate 640 power plants worldwide, he said.
GE Drive Systems' competitors for that business include the major industrial giants of the world, such companies as Toshiba, Allen Bradley and Siemens, Allee said. In 1993, the Salem plant exported 60 percent of its production, much of it going to Asia.
GE Drive Systems is a division of the General Electric Co. of Fairfield, Conn. GE Drive Systems supplies drives, controls and automation systems to utilities and to industries, such as paper and steel mills.
Shade took over as general manager of the Salem plant in March, replacing Thomas Brock Jr., who left the company to begin a consulting business.
by CNB