In Response To COVID-19, GE Makes Job Cuts To Aviation Business

By Christina Haley O'Neal, posted Mar 23, 2020
Boston-headquartered General Electric Co. will make job cuts to its aviation business, part of the company’s latest steps to mitigate the impacts of the coronavirus pandemic, the firm’s chairman and CEO Lawrence Culp said in a statement Monday.

GE Aviation will face a 10% reduction in its total workforce in the United States, according to Culp's announcement.

The business is not providing specifics at the site level, GE Aviation’s director of media relations Perry Bradley said in an email Monday. GE Aviation has 26,000 employees in the United States.

There are about 650 GE Aviation employees at the Wilmington site, which makes rotating parts for the firm’s legacy engines and new commercial engines. The firm had been on a hiring trend over the past year.

“The aviation industry is feeling the impact of this global pandemic most acutely. The rapid contraction of air travel has resulted in a significant reduction in demand as commercial airlines suspend routes and ground large percentages of their fleets. As a result, GE Aviation is announcing several steps that, while painful, preserve our ability to adapt as the environment continues to evolve,” Culp said.

There were no Worker Adjustment and Retraining Notification (WARN) notices as of 1 p.m. Monday processed for any businesses in the tri-county area and no notices for General Electric, said Andrew Beal, communications specialist with the N.C. Division of Workforce Solutions, under the state's commerce department.

The coronavirus slowdown across the country has been causing a stall in business, including the restaurant industry, which is under order to keep its doors closed to the public with only take out and delivery options. Layoffs have taken place in the wake of the pandemic.

COVID-19, the disease caused by the coronavirus, has spread across the globe and United States. There have been more than 300 cases reported in North Carolina, according to recent reports. 

The job cuts announced by Culp on Monday are one of several moves the company is taking in its aviation business to mitigate the virus's impact on the firm.

The GE Aviation business has already taken several actions, including a hiring freeze and a significant decrease in its contingent workforce, he said.

Culp said there will be a temporary lack of work impacting about 50% of its U.S. maintenance, repair and overhaul employees for 90 days.

David Joyce, GE’s vice chairman and president and CEO of GE Aviation, is forgoing half of his salary starting April 1, according to the announcement.

The firm expects these actions will preserve $500 million to $1 billion this year, Culp said.

“Our hardworking, determined employees are the heart of our business, and it is difficult to have to take these steps due to external factors like this,” Joyce said in the release. “But we must respond immediately with every action within our control to protect our ability to serve our customers now and as the industry eventually recovers.”

Culp also said he will forgo his full salary for the remainder of the year.

Other GE businesses will also adjust, Culp said in his statement.

“With regard to our financial position, our company is sound. However, what we don’t know about the magnitude and duration of this pandemic still outweighs what we do know,” Culp said, adding that the upcoming sale of its BioPharma unit will help its position further.

The company is slated to sell off its BioPharma business to Danaher Corp. for about $20 billion of net proceeds and expects the transaction to close at the end of March.

“I also want you to know that we are supporting efforts by the U.S. government to preserve the aviation industry and protect the broader economy," Culp said, "and we have not sought any provisions in stimulus bills that would benefit GE exclusively."
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