Coronavirus: GE Aviation to cut 10% of workers
CINCINNATI - GE Aviation said Monday it will cut 10% of its workforce, citing slumping demand in the face of the worldwide outbreak of the new coronavirus.
"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," General Electric CEO Larry Culp told aviation employees in a memo. "As a result, GE Aviation is announcing several steps that, while painful, preserve our ability to adapt as the environment continues to evolve."
According to our media partners at the Cincinnati Enquirer, hose steps include cutting the division’s headcount. There will also be a furlough (“temporary lack of work”) impacting half of its U.S. maintenance, repair and overhaul employees for 90 days.
GE Aviation is a major employer in Greater Cincinnati with more than 7,500 workers in the region. It employs 10,000 if you include Dayton employees.
The cuts are a huge blow to the region: a historical defense to its manufacturing employment has been diversity – while much of Ohio’s manufacturing is dependent on serving the auto sector, Cincinnati is a major aerospace hub as well.
GE Aviation's workforce alone represents more than 5% of local manufacturing jobs. Manufacturing – in all sectors from automotive, steel, food and chemical production – represents 11% of Greater Cincinnati's 1.1 million jobs.
The impact will get worse: GE Aviation’s production line represents work for dozens, if not hundreds of smaller parts manufacturers throughout Southwest Ohio.
These steps are on top of a hiring freeze already taken as well as the cancellation of the salaried merit increase, cuts in all non-essential spending and cuts in its contingent workforce.
The Boston-based conglomerate said the cuts will save it $500 million to $1 billion. Company officials said they are not seeking government aid.
“We are supporting efforts by the U.S. government to preserve the aviation industry and protect the broader economy, and we have not sought any provisions in stimulus bills that would benefit GE exclusively,” Culp wrote.