Local officials, GE retirees react to restructuring plan

Walter L. Robb, former director of GE Global Research in Niskayuna, is pictured.
Walter L. Robb, former director of GE Global Research in Niskayuna, is pictured.

Categories: Business, News, Schenectady County

SCHENECTADY — General Electric’s restructuring plan revealed on Tuesday was welcome news to several local officials.

GE said it planned to keep its Power, Renewable Energy and Aviation businesses, but it will probably cut its stock dividend.

Previously, GE Power was told it must cut its workforce by 12,000 and reduce costs by $1 billion this year.

The company also said GE Healthcare will become a standalone business owned by GE shareholders, and its gas and oil unit, Baker Hughes, will be separated.

Schenectady Mayor Gary McCarthy said none of the news on Tuesday seemed to point to a direct impact on the city, but he said he wants to work with the company to make sure it continues to be competitive globally.

“GE is going through the business cycle here, which it has done many times before,” McCarthy said. “The history of the company has always been based on innovation and adaptability. I expect that’s what going to happen.”

Schenectady County Metroplex Development Authority Chair Ray Gillen said the company’s announcement to keep its Power, Aviation and Renewable Energy businesses intact proved how important Schenectady is to the company.

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“GE’s Power business helps to light the world with one-third of the world’s electric supply provided each day by GE Power, including equipment made right here in Schenectady,” Gillen said in an emailed statement. “The company’s decision to focus on the power business, along with aviation, shows the importance of the work done here by the highly-skilled workforce in Schenectady.”

Tuesday’s news came as a bit of relief to Schenectady County Legislator Gary Hughes, the County Legislature’s majority leader and chairman of its Economic Development and Planning Committee.

“Sounds as much stability as we can expect with the Power business, which is good for the local economy,” Hughes said. “It’s reassuring to know GE recognizes the value of the Power and Renewable Energy divisions, two very important pieces of our local economy.”

Part of the news on Tuesday was that GE Global Research, the headquarters of which are located in Niskayuna, was expected to retain all of its personnel. It’s even expected to expand its mission, which will include contracting out its expertise to non-competing businesses.

Niskayuna Supervisor Yasmine Syed said the company’s plans for its other divisions was “interesting.”

“It will be interesting to see what happens in relation to the spinoff,” Syed said. “As of late, it doesn’t appear the efforts to make GE more nimble will result in layoffs in Niskayuna. You never want to think any restructuring will result in any layoffs, especially in Niskayuna.”

State Sen. George Amedore, R-Rotterdam, said he hopes the overhaul being made by GE CEO John Flannery will move the company in a positive direction. Especially since the company is a major employer in the Capital Region.

“I think it’s very important that they are focusing on strengthening the confidence with investors and building a strong bottom line,” Amedore said, adding that better outcomes for the company means better results for people who have stock in GE. “The Capital Region has a lot of retirees and employees who have invested their life’s work and savings in GE, and I hope the company makes the right decisions to boost the overall value so that it will help local families and individuals in their financial position.”

Flannery says the restructuring strategy announced Tuesday is a “turnaround plan,” but some retirees aren’t so sure.

“It doesn’t bode well for the company, and it shows that the corporation doesn’t understand where its strengths are,” said Bill Kornrumpf, who worked at GE Global Research for 34 years as an electrical engineer before retiring in 2004. “Having diversity, having multiple divisions is the company’s strength because each of those divisions depend on technology that was originally developed for other divisions. When you separate them out, they can’t work together, and GE then has no advantage over its competition.”

According to a company newsletter titled GE Reports, the new portfolio is “designed to stimulate growth and generate more value for shareholders.”

Larry Lewis, a retired chemist who worked at GE Global Research from 1982-2014, doesn’t see it that way. He feels the company needed someone from the outside to turn things around when Flannery replaced Jeffrey Immelt in August.

“I just sort of look back and can’t believe the same people are running the company,” said Lewis. “All of their acquisitions have been failures, and how many times do you have to fail before you change, and think maybe somebody else should be running things. It’s a different president, but he still came from GE — the same culture.”

The restructuring calls for GE Healthcare to become a standalone business owned by GE shareholders.

Walter Robb was president of GE Medical Systems (now Healthcare) for 13 years before he was named director of GE Global Research in 1986. He retired in 1993, after overseeing GE’s vast improvements in CT scanners and MRI machines.

“In some ways, I’m very proud that a company I took over with sales of $100 million and now has sales of $19 billion is strong enough to be standing on its own as a separate company,”  said Robb, who started at GE in 1951. “I’m excited by it. As for energy, I don’t understand all that, so I’m not going to second-guess anyone.”

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