GE to Cease Making Locomotives in Erie

GE Transportation said this week that it would end locomotive production at its Erie assembly plant by late 2018.

The company said that the design and develop center at the plant will remain open. The plant will also make prototypes and spare parts. Approximately 575 workers will lose their jobs.

The announcement cited downturns in freight traffic and a global market for locomotives. Locomotive production once done in Erie will be consolidated in an assembly plant in Fort Worth, Texas, which opened in 2013.

Opened in 1910, the Erie plant, which is located in Lawrence Park township, once employed 2,000. The workforce has been steadily reduced in recent years.

Aside from the Erie plant being old, it was also more costly to operate.

The Erie Times-News reported that the average salary of a production worker in Erie is more than $30 per hour where new hires at the Fort Worth plant are paid about $17 per hour.

The Erie plant was unionized but the Texas plant is not.

Earlier this year, GE Transportation CEO Jamie Miller said the the company would focus on the global new locomotive market.

In the past year GE has landed an order for 1,000 locomotives to be built for Indiana and 133 for South Africa.

In North America, GE is going to emphasis re-manufacturing older locomotives and upgrading the technology on those units to monitor performance.

Orders for new locomotives in North America have all but vanished with Class 1 railroads mothballing more than 4,000 locomotives in response to a freight recession that began in 2015 and management practices that are seeking to move tonnage in fewer trains.

General Electric itself has been in turmoil in the past few months with CEO Jeffrey Immelt stepping down an activist hedge fund pushing GE management to step up its cost cutting.

GE said earlier this year it would reduce expenses by $2 billion over the next two years.