General Electric’s announcement Thursday that it plans to cut 12,000 jobs in its power division is not expected to have a significant effect on GE Hitachi’s workforce in Wilmington.
The impact will be very small locally, according to GE.
GE Power in its announcement about the job reductions plan, which covers both professional and production employees around the globe, cited changes in the energy industry, particularly softening in the gas and coal markets.
“Volumes are down significantly in products and services driven by overcapacity, lower utilization, fewer outages, an increase in steam plant retirements, and overall growth in renewables,” the company’s news release stated.
GE Power has a target of reducing its structural costs by $1 billion next year, part of an overall goal of cutting $3.5 billion in 2017 and 2018. The workforce cuts align with the efforts to do that, officials said.
“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,” Russell Stokes, president and CEO of GE Power said in the statement. “Power will remain a work in progress in 2018. We expect market challenges to continue, but this plan will position us for 2019 and beyond.”
GE’s power division includes the company’s work in gas and steam power systems as well as the nuclear energy sector through GE Hitachi Nuclear Energy, a joint venture between GE and Hitachi Corp. that is based in Wilmington and provides advanced reactors and nuclear services.
While Thursday’s significant job cuts announcement largely spares the Wilmington operation, the nuclear industry also is facing its own market challenges.
Westinghouse Electric, a nuclear engineering firm and contractor on two major nuclear plan projects – the expansion of new reactors at V.C. Summer station in South Carolina and construction at Plant Vogtle in Georgia – filed for bankruptcy in March.
The latest figures from the U.S. Energy Information Administration this month showed that electricity generation from fossil fuels and nuclear power dropped by more than 5 percent in the first three quarters of this year compared to the same time period last year. Nuclear power dropped by 1.5 percent – the same amount as coal – while natural gas fell 10.7 percent.
In February, GE Hitachi said it was cutting jobs at the facility in Castle Hayne
but did not disclose how many workers were affected.