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General Electric to cut 12,000 jobs in power business revamp
- munk-a 9y agoThis coming within a week of them being handed a giant tax cut...
- phil248 9y agoNo tax cuts have been signed in to law yet. I imagine most folks take a look at the Republican Congress and choose to hedge their bets at this point.
- munk-a 9y agoSorry yes, to clarify they have not yet been signed but... passing the senate was the hurdle that I expected them to have the most issue with. At this point the GOP's image would be seriously damaged if negotiation on the particulars of reconciling the bill fell through.
- maxxxxx 9y agoI am sure they will at minimum agree on a tax cut for high incomes, eliminate the estate tax and deal another blow to Obamacare. That would mean all policy goals have been achieved. 100% success.
- kevin_thibedeau 9y agoStill waiting on the H1B reform.
- maxxxxx 9y agoI don't understand how anyone thinks the tax cuts will have an impact on hiring or wages. Companies are already making record profits so if they had a need for hiring people they could afford it already. They also could afford to increase wages now if they saw a need. The tax cut money will probably go into stock buybacks or dividends.
- dragonwriter 9y agoMore relevantly, because employment costs are pre-tax (compensation is a deductible business expenses), a tax rate cut for corporate income can never make more money available to pay workers (whether existing workers getting raises or more people being hired.) The ways you increase workers take home pay through tax reform are: (1) reduce taxes workers pay on labor income (either income taxes or employee-share payroll taxes), or (2) reduce taxes businesses pay for hiring workers (employer share of payroll taxes). The latter is also how you increase before-tax employee pay through tax reform, since for the same total cost the employer can pay a higher nominal wage.
- maneesh 9y agoGE's profits are a record. Record low. https://www.marketwatch.com/story/ges-profit-miss-was-a-shock-but-the-stocks-fall-wasnt-2017-10-20 https://www.marketwatch.com/story/ges-profit-miss-was-a-shoc...
- stephen_g 9y agoYes, to think that tax cuts would increase employment, you would need to first believe that companies hire people they don’t need for fun. In reality, they will hire if increased demand for their goods or services requires more people to produce them.
- TheAdamAndChe 9y agoThe idea is that greater money saved would lead to more money being invested, allowing for continual exponential growth of the company and thus increased employment. Obviously it hasn't worked out well. Most large-cap corps have more cash than they need for investment, they just are holding onto it.
- Areading314 9y agoGe famously pays almost no tax, so they might actually get an increase under the proposed laws
- deleted 9y ago[deleted]
- bluedino 9y agoWasn't GE running all kinds of commercials about jobs at the "new" GE, trying to hire millenials?
- nkozyra 9y agoWell it's a huge, diverse company. That they're trying to recruit and promote areas appealing to young people while they still maintain (and pursue) stalwarts of industry is not in conflict. If anything, moves like that reinforce that notion, shifting business priorities
- brandonmenc 9y agoThose ads were for things like Digital and Aerospace - not Power, or Capital, or Transportation (which is located in my hometown, and will probably shut down in the next decade.)
- andrewjl 9y agoWhy can't GM re-tool and redeploy those in steam and nuclear generation sectors to work on renewables? The coming wave of solar / wind deployments will be the largest power-related chunk of capex in a generation.
- a_t48 9y ago/s/GM/GE
- chroem- 9y agoBecause renewables, like wind and solar, and thermal power generation are completely different technologies. There is very little in the way of transferrable knowledge and manufacturing tooling between the two.
- beckler 9y agoAlso the margins on renewables are quite thin due to competition and recent innovation in that space.
- nielsbot 9y ago...Leading to thin margins on non-renewables (hence the layoffs?)
- beckler 9y agoGE Power's bread and butter is gas turbines, and the margins there are strong. As long as natural gas stays cheap, there is usually demand for turbines. Renewables have obvious issues, which is mostly around demand and load. Like solar can't supply power in the evening. GE's problem stems from foreign competition where growth is. I'm oversimplifying here, but an example would be China pumping infrastructure into Africa. GE can't win in those markets because China can undercut and they don't have the same regulations that the US has.
- blattimwind 9y ago
- digitalmaster 9y ago“Our problem isn’t that we don’t have enough stuff, it’s that we don’t have enough ways for people to work and prove that they deserves the stuff “ Douglas Rushkoff
- sharpercoder 9y agoSomething has gone very wrong at the GE board. They invested $10B+ in 2015 in the power business, which they now axe. They just took over Baker Hughes (last June), which they now want to get rid of.
- cylinder 9y agoAmerican culture. No long term planning or commitment. People are disposable. Following the latest fad, always.
- iamthirsty 9y agoI don't think it has anything to do specifically with "American culture". Plenty of American companies have long term planning and commitment.
- revelation 9y agoIt's the power business, where every purchase is planned 30 years in advance. To cut 12000 jobs there is just gross mismanagement.
- MaysonL 9y agoWas any of the solar and wind power currently being installed planned even 10 years ago? I doubt it: fossil and nuclear installations planned have been going down for quite a while.
- PoachedSausage 9y agoOne of the UK sites that may shut in Stafford makes giant power grid transformers, you order those well in advance. I don't see how renewables are to blame, offshore wind still needs a grid connection and large substation transformers.
- jfnixon 9y agoBaker Hughes is in the oil services business, a separate GE business unit from Power.
- denweb 9y agoTrump's fault when jobs get cut just like Trump takes credit for creating jobs
- ggm 9y agoThe last sentence says it all. Its not that there is no market for GE's type of skills, its that there are competitors from other places. That includes people located in the primary growth market footprint, of Asia. So GE would be competing with European and North american salary and cost models, against people every bit as good (and they are) but from a different cost model, and even if you equalize for that the asian suppliers can deliver onsite for less, because they are constructing locally. Look outside Asia. Who is investing in Africa? yep. China. They build roads, rail lines, power networks, in return for the coltan. GE as an IPR company doesn't need the same number of people as GE as a build-and-ship company. GE will continue to exist as a bespoke engineering design entity. Maybe GE is becoming ARUP?
- idoh 9y agoWhat does IPR, ARUP, and coltan mean?
- AnimalMuppet 9y agoColtan: Columbite-tantalite, an ore that contains niobium and tantalum. IPR: Intellectual property rights. ARUP: I presume the Arup Group, as Wikipedia says: "a multinational professional services firm headquartered in London which provides engineering, design, planning, project management and consulting services for all aspects of the built environment."
- macandcheese 9y agoGreat read on China's influence in Africa: https://www.amazon.com/Dragons-Gift-Story-China-Africa/dp/0199606293 https://www.amazon.com/Dragons-Gift-Story-China-Africa/dp/01...
- pascalxus 9y ago>>Competitors from other countries. And China has another huge advantage: NO income taxes. This means they can pay much lower wages. This advantage becomes multiplicative because those companies and employees can then buy from others in their country who don't pay income taxes either, so every dollar spent goes further, at least in their country.
- PostThisTooFast 9y agoYes, this was in the mainstream news. No need to re-post it here.
- sidbdjdhs 9y agoI can’t think of a single big descision GE management has made that hasn’t been terrible in the long term. And they were the poster company to justify big CEO compensation