General Electric (GE) announced its intent to close an appliance motors facility in Jonesboro, Arkansas, U.S. in November 2005.
"This announcement is difficult to make, but it is necessary as the loss of most of our orders has left us with no other options," Plant Manager Ron Andresevic told the Jonesboro Sun newspaper. "Orders have steadily decreased in recent years as customers have moved to other technology and lower-cost suppliers."
Mr. Andresevic added that plant will register about U.S. $2.4 million in operating losses in 2004 and "it does not make good business sense to continue operations that are losing money."
He would not identify customers the Jonesboro plant has lost, other than to say the decision to close was made after GE received notice it had lost its last major customer. "It is our policy not to comment on suppliers or customers," Mr. Andresevic said.
GE indicated in early 2003 that the plant might be sold. Industry sources then said GE was attempting to sell its small motors division. Mr. Andresevic said "there are no plans for the facility at this time."
The Jonesboro GE plant, constructed in 1954, makes electrical motors for commercial and household refrigeration appliances. The motors division represented less than 1 percent of GE's $134.2 billion in revenues last year.
A GE spokesman said officials of the International Union of Electrical-Communication Workers of America (IUE CWA) Local 747 and plant employees have been notified of the intent to close the plant. Union officials of were not immediately available for comment.
Under the terms of GE's contract with the union, the IUE-CWA has the option of seeking a review of the decision to close, Mr. Andresevic said.
He said he anticipates a final decision will be made within 60 days. If the decision is to proceed with the closing, operations would cease in 12 months.
If the proposed closing becomes final, 80 percent of the employees will be eligible to take one of GE's early retirement options with full benefits, the GE spokesman said.
Benefits will include lump severance pay, continued medical, dental, and life insurance for employees and covered dependents, preferential placement at other GE manufacturing plants, and coverage of some education and retraining expenses. (Jonesboro Sun)
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