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Bright future or dim prospects?

Some fear for GE’s future in, near Electric City

Saturday, October 5, 2013
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The GE plant is seen in Schenectady.
Photographer: Marc Schultz
The GE plant is seen in Schenectady.

— Ever since General Electric put its roots down in Schenectady, there has been speculation that it would up and leave.

Only six years after it officially formed in 1892 along River Road in Schenectady, the rumors about New Jersey began.

“There was talk that just after they’d got here they were going to move out to New Jersey,” said George Wise, a former GE employee and unofficial historian of the now-multinational corporation. “I would never say, ‘Oh, they will or won’t be here in 20 or 30 or 50 years’ because it’s kind of amazing that a company has been in the same place for 100 years to begin with.”

The city that once lit the world feels once again at a crossroads with the company that gave it its identity. Last month, workers at GE’s Fort Edward manufacturing plant learned that the company wants to close down the plant and ship jobs down to Clearwater, Fla. Less than two weeks after that news broke, employees in Schenectady began receiving layoff notices. The company announced that up to 200 white-collar workers at its Power & Water division in Schenectady would be laid off by the end of the year.

The announcements were like a one-two punch to the Capital Region, which has long had a rollercoaster relationship with GE.

In the late 19th century, the company, and Schenectady by association, were revolutionizing industries. At its peak, GE employed 40,000 people in Schenectady. By 2006, that number had dropped to 3,000. Today, graffiti on a bridge overpass near Edison Avenue bluntly reads “GE Killed Schenectady,” the black block letters like a stain the company can’t scrub out, despite its creation of 1,600 new jobs and $400 million in new investments in the Capital Region over the past four years.

But with the fate of nearly 400 local GE jobs on the line in the next year, it’s worth examining whether, generations later, GE has a responsibility to sustain the economic well-being of its birthplace.

“GE is very proud of its more-than-120-year history gainfully employing people in Schenectady and the Capital Region, and we remain committed to our strong presence here,” said Christine Horne, regional spokeswoman for the company.

The plant closure and layoffs are tough decisions, she admitted, but ones made to keep the company competitive.

“Our mission has always been to run a profitable, sustainable company that’s globally competitive, and that’s why we’re able to still be here today,” she said. “We are constantly evolving to meet the demands of our customers in ever-changing markets, and in recent years we have chosen Schenectady and the Capital Region to invest in cutting-edge new businesses, technologies and operations. These investments could’ve gone anywhere in the world.”

Fort Edward troubles

Chris Townsend sees it differently. Any other company would look at GE’s profits at the Fort Edward plant, a few miles outside of Glens Falls, and jump at the chance to take it over, he said.

“This is a profitable plant,” said Townsend, a representative of United Electrical, Radio & Machine Workers of America, the union that represents Fort Edward workers in the fight to keep the plant open. “But for GE, the race to become increasingly competitive has no finish line.”

Anything GE says about investments in the Capital Region doesn’t match up with its actions over the past decade, he said, pointing to the 2006 sale of its silicone plant in Waterford as one example of its disregard for the region.

“One only needs to look around this region of the state to see that this company is methodically, systematically walking away — either through closures, layoffs or sales,” said Townsend. “After everything that the taxpayers of this state have done and the consideration this state has given GE, this corporation now chooses to abandon these communities.”

GE retiree Bill Kornrumpf has another view of the company to which he dedicated a lifetime.

“If the company cannot be competitive, then the jobs are going to be lost, whether or not they’re here or elsewhere,” he said.

The 71-year-old Rotterdam man worked as an electrical engineer for GE from 1966 to 2006 and said he remembers vividly the time former CEO Jack Welch said there would never be a new job created in Schenectady.

Downsizing era

Welch presided over the company from 1981 to 2001, aggressively cutting employees and entire business units along the way.

Kornrumpf wasn’t a part of whatever unrest existed among the company’s blue-collar workers during Schenectady’s downsizing. He was an engineer in the Research & Development lab, and he and his colleagues felt only the positive effects of Welch’s business decisions.

“We were isolated from most of these goings-on and at the research lab because we were not heavily surrounded by production workers and the union attitudes of the time,” said Kornrumpf. “As Jack Welch downsized production in Schenectady, Schenectady needed its engineers more. The good news is that today, GE’s present CEO doesn’t appear to have the prejudice against Schenectady that Welch did. He’s making what appear to be rational business decisions, investing in more production where Jack was moving us out of production.”

He admits he doesn’t know whether GE owes its birthplace anything. And even though he was employed there during Schenectady’s great downsizing, he still remembers with pride how people referred to the city.

“GE has done many really great things for Schenectady,” he said. “Just having had its headquarters here and a research lab where you had these Nobel laureates working was just amazing. People before the ’40s, even up through the ’50s, if you talked to anyone in the elecrical or electronics industry, they would say Schenectady was the place to be.”

Wise, the unofficial historian of GE in the region, learned about the New Jersey rumors during the 1980s when he was working on a manuscript, titled “General Electric Century,” that now sits in Union College’s special collections department. Wise found old newspaper clippings that quoted speculation and then realized that it’s never really stopped.

He worked at the company from 1973 until 1999 and was always interested in GE’s history in the region. When he first got there, GE’s golden age in Schenectady was long gone.

“If you had looked at the employment curve up until that time, the rising and then drastic flattening of the curve, you would have extrapolated it to mean that there would be zero GE jobs in this area today,” said Wise. “If somebody said that a new 3,000-job plant was coming to the Capital District, everybody would say you were nuts. And here GE is, with that many people here. So you could say, in that sense, it’s amazing that they’ve managed to be here even 100 years.”

Local investment

Today, GE has more than 7,000 employees in the region, including Schenectady, Niskayuna, Fort Edward and Troy.

It re-upped its commitment to the region in 2000, Horne said, when a $250 million investment to refurbish its Schenectady campus allowed it to upgrade its steam turbine and generator manufacturing facility. Two years later, CEO Jeff Immelt declared Niskayuna the global headquarters for GE Research & Development and invested $200 million in refurbishments.

“GE Global Research is the crown jewel of our company,” said Horne.

In 2009, GE Healthcare opened a digital X-ray detector manufacturing facility in Troy — a $165 million initial investment that created 150 jobs and is undergoing product expansion.

A year later, GE threw $45 million into the renovation of a 100-year-old building on its Schenectady campus and re-opened it as GE’s Renewable Energy global headquarters. It created 650 jobs.

“Another point is the fact that in 2011, we brought the president of the United States here to showcase the great things happening at GE in Schenectady,” said Horne. “What better way to put Schenectady on the world map? We worked with the White House to identify a GE location that has leveraged innovation to meet the changing needs of our global markets and that has driven manufacturing competitiveness, and Schenectady was the place we were proud to highlight to the world.”

Just last year, GE restructured and based its Power & Water headquarters in Schenectady and at the same time opened a $100 million battery manufacturing plant that to date has created 375 new jobs of a planned 450.

GE even expanded last year into Albany, relocating its GE Idea Works from Princeton, N.J., and bringing with it 40 salaried positions to the Capital Region.

“Really, when I look at all this, I think it reflects our staying power in the region,” said Horne.

Townsend, who has been to meetings this week regarding the Fort Edward negotiations, said GE can prove that sentiment to be true by deciding to keep 200 jobs in the region. Corporations need to remain competitive, he admitted, but disguising the plant closure as a means of staying competitive is dishonest, he continued.

“What obligation do they have to this country? What obligation do they have to this region that gave birth to them and generated them profits? The answer isn’t everything or nothing. They have some. Just some,” he said. “We have to hold them to their promises. This is the fastest-growing, U.S.-shrinking corporation based in the U.S. This is a corporation that routinely engages in public relations about investments and assurances, and some of it does come to fruition, but the current chronicle of GE is a sad one. Once this company decamps from Fort Edward, who’s next?”

 
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