GE to close lighting plants in U.S., Brazil as part of restructuring, cutting up to 1,400 jobs
GE Consumer & Industrial, based in Louisville, Ky., said it will close all of its lighting operations in Rio de Janeiro, which will affect about 900 jobs.
The company also plans to close some lighting factories in the U.S., which will impact about 425 jobs. "A portion" of the U.S. jobs will be transferred to other GE lighting facilities, the company added.
Another 80 jobs will be affected by a transfer of some operations from facilities in Mexico and the U.S. to other locations.
Fairfield, Conn.-based GE said it is closing the facilities, in part, because of a changing lighting market, in which demand for the incandescent bulb has declined over the past five years due to new technology and efficiency standards.
"It doesn't make sense for us to continue with an inefficient model," said Jim Campbell, president and chief executive officer of GE Consumer & Industrial. "The proposed plan would allow us to continue to reinvent our production model to use our global factory more efficiently and effectively."
The company can now purchase components at more competitive prices, making it more expensive to continue making the lighting-product components in-house, he said.
"The restructuring we are proposing, while very difficult due to the impact on employees, would be one of the most important things we've done in the 100-plus-year history of GE's lighting business," Campbell said.
"We are increasing our focus on the development and production of new, innovative lighting products like LEDs, organic LEDs, our new high efficiency incandescent light bulbs and other products that our customers will increasingly demand and require," he said.
The announcement brought sharp criticism from the union representing lighting workers. The Pittsburgh-based United Electrical, Radio & Machine Workers of America accused the company of mismanaging the division.
"Having run the business into the ground, GE now hypocritically states that it's time to `refocus,' which of course will be at the expense both of employees who have devoted their working lives to General Electric and the communities where the plants are located," said Stephen Tormey, secretary of EU's General Electric Conference Board.
Tormey said the company is using some of proceeds from its $11 billion sale of its plastics division to pay for the lighting restructuring, but instead should invest in the plants to make them more profitable and competitive.
"GE sees it as a funding pool with which to slash more domestic manufacturing jobs," Tormey said.
GE previously laid off more than 3,000 workers in the consumer and industrial unit by closing facilities and transferring or selling operations in Europe, China, Indonesia, the U.S., Latin America, and India.
GE shares rose 15 cents to $41.70 Thursday. The stock has been trading between $33.90 and $42.15 over the last 52 weeks.
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