OPINION OF THE GE POWER EUROPEAN COMMITTEE
ON THE STEAM/FIELDCORE RESTRUCTURING PROJECT
26 MARCH 2021
Europe is at the heart of a global energy war and has obligations to its citizens in terms of energy transition. GE, with the purchase of ALSTOM's energy branch, has become a major player in this transition.
China and the United States have already set up energy transition plans in which they have integrated their industrial players. Meanwhile, Europe is losing skills. There can be no energy transition without industry !
GE should be a key industrial partner for the energy transition, on the one hand by selling its products, but also by investing to propose innovative solutions.
Steam (STEAM) is at the heart of the current energy mix (coal and nuclear) but also of the future energy mix (SMR, biomass, waste treatment, geothermal, concentrated solar power), and also of industrial processes (co-generation, hydrogen production, etc.).
The GE group has the means to invest, but has invested very little in Steam since the purchase of Alstom's energy branch in 2016. In 2020, despite COVID19, the group generated $3.8 billion in industrial profits. It has more than $36 billion in free cash. Its debt maturities are now measured and staggered over time, and its policy of divesting existing activities gives it the means to further reduce debt.
Unfortunately, this is not the strategy applied by Larry CULP, who prefers to impose restructurings to increase the profitability of his businesses, decided on the basis of financial profitability ratios that effectively allow a return on investment in the very short term, whilst at the same time destroying the capacity to perpetuate strategic industrial activities. GE is now only investing in products or offers that will only bring immediate profits with moderate risks. So contrary to the announcements, GE is not investing in the energy transition, but is destroying the European capacities that will enable it to be achieved. The STEAM/FIELDCORE restructuring plan is unfortunately only the most recent demonstration of this strategy.
Moreover, it is important to note that this project serves the United States economic interests by removing capabilities in China and Europe whilst strengthening the capability of India.
The project submitted for consultation does not only consist in stopping the construction of new coal-fired power plants. It also aims to withdraw from any business that is not sufficiently profitable. This project sacrifices the invaluable historical know-how developed in Europe.
Indeed, under the guise of stopping the production of new coal, many of STEAM's historical activities are being called into question:
- The flue gas treatment for boilers (AQCS), the trades of central plant assembler and management of electrical and mechanical auxiliaries are abandoned, including in terms of service, whether for maintenance or the manufacture of spare parts.
- The industrial turbine business, which represents a significant potential for projects, particularly in Europe. These projects require a responsiveness and proximity that will not be achieved with teams that are now exclusively Indian.
The consequence is a specialization of STEAM around the only new nuclear activity and a Service (after-sales) refocused around alternators and turbines. The aim is to make it a business with a solid order book, with short-term profits and therefore very attractive for a sale. But specialization means increased risk in a cyclical market.
Under the guise of debt reduction, GE is pursuing a policy of reducing fixed costs. And imposes a level of R&D that is too low when compared to the competition. Thus it maximizes the return of cash in the short term while the group should invest in its industrial businesses today in a much more strategic way to better position itself in the future.
The assumptions about costs that justify the positions to be eliminated do not correspond to reality and pose a risk to the sustainability of the business. The industrial risks induced by the plan, particularly in the reduction of nuclear team capacities, have not been properly assessed.
Thus the restructuring becomes an investment to be sure to sell STEAM at the best price. Larry CULP himself confided a short time ago that no GE activity had a place in GE and that all could be sold.
But in what condition? In the shorter term, GE is jeopardizing Europe's ability to maintain existing nuclear sites and develop new ones by eliminating existing know-how. The large number of layoffs and site closures throughout Europe is a waste of human potential, not to mention an irretrievable loss of key skills required for the transition of the energy sector.
By rejecting the majority of the alternative proposals made by the staff representatives, the management only agrees to keep 78 jobs out of more than 1,500 initially proposed for elimination. This leads us to believe that only the legal obligation to respond matters to management, without taking into account the industrial aspect. In the end, we end up with a project of European de-industrialization in the context of energy war.
The GE POWER European Committee wishes to recall here its alternative project:
- The end of all social plans in GE's energy sector in order to preserve expertise and know-how in view of the challenges of energy transition on a European scale,
- The definition of a coherent European industrial project to contribute to this transition by using the jobs and skills present in Europe,
- The relocation of decision centers for Europe in order to process orders locally,
- Investment in R&D in Europe and not only in the US,
A plan to relocate its means of production to Europe to avoid supplying its orders from distant countries considered low cost but in reality reducing quality and increasing the carbon footprint.
If management persists in maintaining this reorganization plan and job cuts as is,
- The big winners would be GE's senior management, shareholders, banks and competitors as the business becomes more profitable and present higher value in the short term. It would have a positive impact on the share price and debt repayment. But it would also strengthen the competition, which could then benefit from the abandoned market shares but also from the loss of competence in GE and the subsequent employment of highly qualified former GE employees.
- The losers would be primarily the European states and their citizens, customers, employees, suppliers and partners. But also for STEAM, the consequences would be disastrous :
o No long-term investment without a quick return in the STEAM business
o Fewer solutions to support the inevitable energy transition,
o Job cuts and an uncertain future for employees,
o Lower project and revenue volumes,
o Increased fragility in the event of a market downturn,
o Increased risk on the execution of the order book,
o Reduced market opportunities due to a reduction in the envisaged scope.
For the staff representatives, this restructuring project is too dangerous for the future of the STEAM/FIELDCORE companies as well as for the environmental and social stakes and must not be implemented. This is why the GE POWER European Works Council is opposed to the implementation of this plan and demands that it be abandoned in favour of a real industrial strategy that meets the needs of the energy transition and takes into account the social and environmental role of the industry.
The GE EUROPEAN COMMITTEES alert European politicians !
Paris on 9th February 2021
For the attention of Mrs (Mr). XXXXXXXX, Chairman of the XXXXXXX European Parliamentary Group
Subject: Europe's energy future in the light of the General Electric group's strategy
Madam (Sir),
We are writing to you in our capacity as the secretary and Co-ordinators of the General Electric European Works Council. We wish to bring to your attention our concerns over the actions of GE since their acquisition of the Alstom energy division in 2015 and the implications this has, not just for the workers of GE Power, but importantly for the ability of the European Energy market to be able to respond to the challenges currently facing us.
Since the acquisition of Alstom there have been no less than 6 restructuring announcements, leading to the loss of 15,000 direct jobs and at least as many at subcontractors and suppliers, all of which are essential to the development of the single market for energy and the necessary energy transition to a lower carbon future. GE's strategy has concentrated on improving its short-term profitability to the detriment of investments and an industrial vision capable of meeting the energy challenges.
GE's financial choices have led to a reduction in its capacity to serve the European installed base; to design and manage complex energy projects; and to maintain the skills needed to design new turbines. In addition, there are the collateral effects on the company's entire network of European subcontractors (foundry, industrial and engineering subcontractors) all of which play an essential role within Europe’s energy sector.
Of the 4 billion dollars that GE has invested in R&D in 2020, only a few million are invested in Europe in industrial sectors and budgets are still 25% lower in 2020 (EU RD Scoreboard 2020 FINAL). The few remaining European R&D budgets in GE are based solely on short-term profit maximization. The lack of any long-term industrial vision is leading to the disengagement and destruction of European skills with the consequent impact on the capacity of Europe’ energy sector to respond to the challenges of the future.
In September 2020, GE employed only 57,500 people in Europe, including 17,000 in its POWER branch (steam, energy conversion, nuclear, biomass, gas, etc.) and 14,000 in its RENEWABLE branch (networks, hydraulics, wind power, etc.) ... The question has to be asked as to how much further this reduction in skills, expertise and capacity will go?
GE is one of the few major energy equipment manufacturers (OEM) in the world.
Unfortunately, GE no longer seems able to maintain its industrial footprint in Europe.
In such a concentrated market, with so few players, the continual destruction of key skills is endangering the entire European energy sector, to the benefit of the United States and Asia.
Faced with this disengagement of GE in Europe, confirmed by all the expertise that we have been able to provide within the GE POWER European Works Council, all the European workers' representatives made a statement on 15 January, which you will find attached.
We hereby also take the liberty of requesting a future meeting so that we can properly discuss these issues and give them the attention that they clearly deserve. In addition, a full discussion will also give us the opportunity to examine what European responses might be necessary in order to protect and nurture an industrial Energy sector capable of meeting European energy needs and challenges for the future.
With best wishes,
For the European GE Power Committee
For the European GE Power Committee
The
Secretary
INDUSTRIALL-Europe Coordinator
Gregory
PASTOR
Patrick CORREA
For the European GE Renewable Committee For the European
GE Renewable Committee
The
Secretary
INDUSTRIALL-Europe Coordinator
Manel
SANTIAGO
Monica GOMEZ
For the European GE Central Committee
For the European GE Central Committee
The
Secretary
INDUSTRIALL-Europe Coordinator
James
FREW
Simon DUBBINS
Statement of the European Committee of GE Power (PBC),
January 15th 2021
This consultation was presented by management as a continuation of the consultation that GE Gas Power carried out in June on an organisational change based on general principles, without detailed consequences at the time for the teams and the content of employees' work.
As a reminder, in our opinion delivered in July, we highlighted the following points of vigilance which unfortunately were not taken into account by management in its new project: • Use of the lessons learned from the past tentative of system thinking and reference to the best practices from what was developed in Europe in this regard (as a full application from commercial application to site support was implemented) • Avoid any reduction of manpower and consider base cost budgets to support this change • End the finance illusion of centralization for short term savings but long-term issues & impacts • Return of industrial vision of businesses organized by P&L, with much clearer management accountability, investment program by location and clear NPI vision • Europe recovering leadership over the EMEA pole and a clarification of the roadmap of all sites (technical positioning and volumes)
None of these points of vigilance raised in July were considered in the proposal as it proposes 301 social impacts in Europe and fails to answer any of the expected fails to answer any of the expected questions on the industrial strategy for Europe.
For years, GE Gas' European teams have been confronted with numerous waves of restructuring that have led to thousands of job cuts. This new project will once again have a significant impact on employee motivation and faith in the future. With this plan, Europe will once again be the most affected part of the world.
In this new wave, as in all previous waves, support functions are affected, shifting their tasks to operational teams who will have to do the work in addition to their own.
The savings expected from this new wave of restructuring are ridiculous compared to the ambitions of companies. GE has made no calculation of the potential side effect of this project on its ability to achieve its objectives.
In July, we considered the 4 lines of business as a potentially good way to better manage the company. But when we look at the proposal, we don't see clear ways to support the business lines and in particular the Aero line of business which has real potential.
This project is not in line with GE's strategy as presented by Mr. Strazik on November 25th. No means are planned to strengthen safety, quality and reliability, which are considered to be the basis of the strategy. No clear analysis of the past results of the costing programme has been made to support the realism of the company's first priority, which is to gain on variable costs. There is no clear articulation of Europe's role in the top priority of positioning business for a more decarbonised world.
Worse still, it seems that GE only sticks to its financial approach. GE Gas' energy is definitely facing an austerity remedy. The company continues to cut costs and focus on the most valuable products that favour short-term performance at the expense of medium- and longterm positioning. This search for concentration is being carried out by abandoning all the "worthless" activities that increasingly concentrate the European teams and make them more fragile, reducing their position and preventing them from reaching the potential of the gas market. As a result, this reduces a large part of the market for GE Gas' business. Rather than competing in a segment where single-digit margins are the rule, GE is trying to maintain its double-digit margin in fewer and fewer segments.
Moreover, full understanding of management's plan has not been achieved. There was a lack of sufficient information, which was nevertheless requested repeatedly in a precise manner. Whereas the purpose of a consultation is to enable members to be able to formulate a reasoned and informed opinion. GE management preferred not to respond to these requests. Rather, it preferred to impose an end to consultation, even if it meant distorting the social dialogue.
The missing points are:
- GE's strategy on the energy transition with the role that Europe will play : operational and industrial impact, as well as investment levels. - The investment strategy on decarbonization has never been presented to us, although these investments will be shared with those planned for technology, work tools, R&D, etc. - The translations of the answers to our alternatives were only communicated to us in the middle of the meeting, which did not allow us to have a constructive exchange to defend them with the management. - During past meetings, we had asked for an impact study: o Identification of risks o Probability of occurrence o Impact severity assessments o Solutions envisaged to eliminate or make the risk acceptable - No clear presentation of the respective roles and responsibilities of the divisions and business lines. - Concerning LEAN, it has never been explained to us in a detailed and precise manner, how the management intends to make its productivity gains. Furthermore, the LEAN on transactional activities (excluding production) was never submitted for consultation.
- The organization, strategy and financial objectives are global. So, Europe is dependent on other parts of the world for these 3 points, but we do not have a vision of the overall capacity of the organization as well as the European financial objectives.
As these elements are essential to formulate a reasoned and lighted opinion, the European GE POWER Committee does not see itself in a position to do so. And therefore, calls for continuity of consultation.
At the time when the Committee is required to give an opinion, we learn from the press that Mr L.CULP, CEO of GENERAL ELECTRIC, is going to receive a bonus of 47 million dollars, for services rendered to the shareholder.
We can only conclude that tomorrow's redundancies will only serve to finance the interests of one man. It would have been more judicious if the future of the company was a priority (as he likes to shout in his communications) for him to refuse his bonus. And so, let the money saved be used to prevent redundancies so as to maintain and develop jobs and skills within the company.
In any case, this clearly shows that the successive restructurings that the company, and more particularly the gas sector, has been going through for years are not at the service of the company but for the benefit of finance alone!
Given GE's major role in the energy industry in Europe, we are entitled to expect something else from a group of this size. Because if we allow companies like GE to lay off workers and deteriorate working conditions for the sole reason of the all-powerful shareholders, we are forgetting the structuring role of the industry on employment, but also on Europe's energy management.
Industry requires time and investment. Quite the opposite of the quarterly management required by financialization and as GE does.
With their know-how and skills that have made the reputation of the European and world industry, GE employees have useful and necessary jobs for an energy transition for access to a decarbonised and accessible energy for all.
Expertise has shown that only one third of jobs are potentially the result of a drop in orders. The rest only respond to an increase in profit margins. It is the choices that GE is making that are mortgaging the future. Not the market!
All these reasons lead us, as representatives of GE Power's employees, to question the future of this enterprise under General Electric management.
COMMUNICATION FROM
THE EUROPEAN COMMITTEE GE POWER
November 30th 2020
On 25 November, Mr. Strazik came to present to the European Committee what would be the industrial decline of GE's strategy regarding the energy transition, as announced by the CEO of General Electric, Larry CULP.
The employee representatives would like to stress that they came away very disappointed and dissatisfied. At no time did Mr. Strazik detail his strategy, let alone specify the means to achieve it. It is as if Mr. Culp’s announcements on a White Paper for the future strategy of the group (which we requested but is still “not available”) were intended solely to reassure the market.
In the presentation of its strategy for business Gas:
- there is no view on the means devoted to supporting what he calls the grassroots: safety, security and quality. Worse, we stick to our feeling that we are giving a priority to cost reduction above all else;
- Despite the "new" approach proposed to increase productivity, we fear that the simplistic responses of permanent restructuring and massive relocation will be maintained. Let us remember that productivity on variable costs comes back every year without any convincing results so far ;
- The roadmap for service growth is not operationally specified;
- With regard to decarbonation, there are no clear R&D objectives for the group's companies and no declared willingness to develop in Europe despite the need to accompany the transition.
However, an industrial vision of business should feed into a clear industrial strategy and a roadmap for the different European sites. This would help rebuild confidence in the future and re-motivate employees in search of certainty.
Unfortunately, we are convinced that GE will prefer the same old recipes that have not worked so far and will continue to reduce the European footprint (disinvestment, job cuts, de-industrialization). The focus is clearly on the United States (center of decision-making) and Asia (center of gravity of the market), with an exit from Europe seen as a service market only, requiring no local investment.
COMMUNICATION FROM THE EUROPEAN COMMITTEE
GENERAL ELECTRIC POWER
November 19th 2020
On 9 November 2020, a meeting of the GE POWER European Committee on Restructuring took place, which once again affects the gas sector. The purpose of this meeting was to have an exchange with the management following a series of questions asked by the employee representatives in order to better understand the project and its potential impacts.
At this stage, our discussions with management have led us to understand that GE's strategy for its POWER division is based solely on short-term financial profitability and not on long-term profitability as demanded by the industry on which our jobs depend.
Although electricity needs are crucial to the functioning of countries, GE considers that the market for new power plants is mainly located in Asia and sees Europe's gas market essentially as a market based on maintaining the installed base, without paradoxically making any investment on the after-sales side. GE sketches a backing for wind power without really explaining from which investment to develop its products
The representatives of the committee noted that GE considers that the de-industrialisation of Europe has led to a fall in demand for electricity: A climax when it is itself accompanying this process through its job losses and relocations. Yet this did not and still does not prevent it from collecting with impunity the public subsidies that European energy enjoys. The purpose of these subsidies is to make the strategic activity of electricity supply independent of the vagaries of the market. However, elected representatives are aware that the various European policies that have been applied for decades provide little or no support to the industry in our countries.
Given that GE considers that markets should be addressed from their own region, i.e. that Europe should only respond mainly to the European market, this decision puts European export-oriented sites in a difficult position, but also runs the risk of creating only 2 regions capable of responding to the new model: Asia and the United States. This is a very risky gamble in view of current geopolitical uncertainty. It also seriously compromises the ability to provide service and maintenance activities in Europe and calls into question its coherence and industrial robustness.
As long as the Gas market was flourishing GE did not ask itself any questions. As soon as it became more competitive, the management panicked and could only satisfy the appetite of its shareholders and managers by launching massive restructurings that were far from satisfying our customers, as evidenced by the erosion of the group's market share.
From our point of view, the new organization proposed for gas reinforce the GE existing strategy of positioning of the United States (mainly) and Asia over Europe with 4 levers:
1. Elimination of decision-making positions in Europe,
2. Delocalization of European engineering jobs in low wage countries,
3. Delocalization of commercial and execution jobs to other regions,
4. Create a vicious circle of lowering capabilities that lead to lower performance.
Europe, for the United States, is therefore seen only as an assembler that must have neither Research & Development nor decision-making capacity. At the end of the implementation of GE strategy, Europe will be the forgotten part of the world and will no longer be in a position to answer its own needs, at the mercy of Chinese and America.
Even the so-called “best cost” ie "low-wage" European countries, which have previously felt protected, are now being impacted. No one is therefore immune!
The European committee has managed to have several discussions on GE's strategy in the energy sector. The operational managers, Mr. Strazik (Gas) and Mr. Janki (Portfolio), will appear before the European POWER Committee on the 25th of November. This will be an opportunity to discuss the industrial declination of GE's energy strategy within the scope of POWER. We will put them face to face with their responsibilities for the energy industry and employment and the inconsistencies of their projects.
The elected representatives fear that by dint of losing our skills and knowledge, we will never be able to regain these skills again, whereas the need for skill and knowledge is enormous if we are to meet the challenges of the energy transition currently underway.
Aware of what is at stake, your European representatives are doing their utmost to combat this devastating policy and are calling on all employees to resist and to stand united behind it.
Communication from the GE Power European Committee (PBC), on the proposed
reorganisation of GE Gas Power's activities
November 3rd 2020
For the 5th time in a row, GE's energy sector in Europe has been hit hard by restructuring. Once again, despite L.CULP designating GE's Gas sector as one of
the pillars of the company, and best combined with Renewable, it is affected.
But not only, since the employees of the Renewable branch are also facing a major restructuring plan with their production moving to China, and engineering to India.
In 2019, at the time of the last restructuring plan, the European POWER committee had raised a number of concerns which are unfortunately valid today:
- The last restructuring plan did not solve the implementation problems. On the contrary, it has increased them. And we insist, not because of the employees' lack of skills.
- The committee noted GE's disengagement in its Energy sector with the implementation of a silo organisation where Europe was losing its structuring role. A decline that is becoming more pronounced with once again the desire to reduce the engineering teams and managerial functions. As if to better put the old continent under the bell of the United States.
- The committee had warned that any restructuring for only 1 point of growth was perilous. Today, the question of the commercial performance impacted by this new organisation must be asked. Covid cannot be an excuse on its own.
- As we feared, even the countries with the lowest wages in Europe are no longer spared from relocation.
The European GE POWER committee, aware that the situation is anxious for the employees, asked to have the conception of the energy transition seen from GE's
point of view, including the declination in its Energy branch with the associated industrial impact and possible sales.
We are also asking for transparency on all the aid that GE receives from the European Union Member States. This aid must support an industrial strategy for
energy transition in Europe.
The consultation process will be carried out in two phases. The first phase will be an analysis phase, and then the committee will make alternative proposals
in a second phase.
The European committee is above all a tool at the service of employees. Therefore, we invite all GE POWER employees in Europe to support their elected
representatives in any local initiatives they may have.
Industriall, which is the European federation of trade unions linked to industry, gives its full support to employees and stands alongside your European committee in this fight for the preservation of sites and jobs.
Opinion on 2019 october 16th of the European Committee of GE Power (PBC),
on the proposed reorganisation of Power's activities in Europe
On June 10, 2019, GE's Management initiated consultation with its European GE Power Committee on the proposed separation of GE Power into two industrial divisions (Gas and Portfolio) and on a restructuring of activities including the elimination of 1800 positions and the creation of 246 positions at the European level.
Regarding the conduct of the consultation process:
At the request of the elected representatives of the PBC and in agreement with the Management, the consultation will have been conducted over a period of 4.5 months. It has enabled your Committee to work effectively, in understanding the motivations for the project and the development of alternatives that meet the strategic, industrial and economic challenges of the business.
Whilst the exchanges were open during the project presentation phases, the Management have adopted a much more dogmatic and closed stance when analyzing our alternatives. The Management thus demonstrated that it was above all interested in the proper formal conduct of the consultation, without seeking to reduce the impact of its project by taking the feedback and advice from its employees.
At this stage, almost all the alternative proposals have been rejected by the Management, with the employer only looking to re-consider 4% of the posts initially proposed for abolition.
Concerning the separation of the Gas and Portfolio activities:
According to the Management, the project presented consists in giving more autonomy to the businesses, by focusing them on their markets and providing them with dedicated support services. This approach appears to be consistent with the desired responsiveness in our markets.
However, whilst your Employee Representatives take note of the removal of a layer of Power management which is remote to the business units themselves ; they deplore the fact that these functions which were previously centralised are not being sufficiently re-assigned within the different businesses. Management are increasingly seeking to use external partners to carry out these functions and this seems to be a dangerous strategy to us. The interfaces between the business units and these external partners are often poorly defined and skills are no longer being retained with the company.
In addition, the Committee notes that this separation requires co-ordination between the Gas and Portfolio businesses (as for example for the network of joint plants), which still needs to be clarified.
Finally, the elected representatives of the PBC consider that this demerger of Power is the prerequisite for future business transfers. The sole purpose of the Portfolio division is simply to group together the activities outside Gas, without any links between them.
Concerning GE's situation and the context of GE Power at the end of 2018:
As a reminder, GE has paid $117 billion to its shareholders over the past 10 years. GE deliberately went into debt in a way that was out of the ordinary. This irresponsible financial policy is the foundation of the current restructuring.
With regard to the Gas market, the years 2018 and 2019 represented a low point for the construction of new power plants that the group had not been able to anticipate. However, the outlook remains good in the medium and long term (increase in volumes expected for the New, and sustainable profitability for Services). The business has mainly experienced execution problems ($1.3 billion in 2018 and potentially $500 million over 2019, according to GE’s own predictions), which are the main cause of its posted operating deficit (-$0.9 billion in 2018).
Regarding the proposed restructuring project:
The project presented does not address the urgency of the execution issues. It is hiding behind a cyclical market downturn, to justify massively transferring Gas and Support activities outside Europe (within GE centres of excellence in low-cost countries or even to external partners), it reduces Steam Power's IST activities and closes the Milan Clean Combustion activities.
GE thus makes strategic choices, with serious technical and social consequences: to move to low-wage countries (all functions are concerned: Engineering, Manufacturing plants, support functions,...), increased selectivity in taking business and maintenance of an organisation in silos, in which Europe loses its structuring role to the benefit of the supposedly autonomous Regions.
It is therefore not the market that requires the restructuring, but GE's choice. All this to gain 1 additional profitability point without taking into account the associated risks involved with this restructuring.
This uncertainty is leading to a loss of motivation amongst experienced employees who are leaving the group. This strategy does not offer a vision for the future and makes it harder to recruit and retain, new, young talent. All of this is in turn having an impact with customers who doubt the long term commitment of GE to this sector.
Concerning the future of GE's activities in Europe:
At the end of the consultation, the PBC considers that this project is the continuation of a massive European disengagement, initiated several years ago by the GE group.
This is indeed the third major restructuring, experienced in the Power business. Europe's capacities are thus gradually being reduced. The proposed trajectory draws a system of GE in Europe that would only serve its region, with a very limited global role. In this context, we can only wonder about GE's ability to serve the European market in the future. Europe's global role as an export base to serve the world is being severely challenged. The Committee fears that GE is reducing its capacity to provide turn-key projects within Europe and this will further reduce the customer base in the future.
The Committee is convinced that the group, through this new phase, will aim to organise itself outside of Europe to respond to the 2024 rebound (market peak). More precisely, this path leads to questions about the future sustainability of entire sites, such as Belfort and Birr/Baden.
We believe that a number of other sites in Europe face similar threats to their future as a result of this proposal.
Furthermore as a major energy player in Europe it is inconceivable that European Engineers are being deprived of any opportunity to participate in the current worldwide energy transition. The research and development capabilities of Europe have been progressively suppressed since 2016. This destruction of key skill sets throughout the European Community can not go un-challanged. We shall mobilise our resources at both national and European political levels to ensure that Europe retains these capabilities which have geo-strategic importance to the industrial future of Europe.
Opinion on the project in consultation:
On the basis of these elements, the Committee's elected representatives consider that this plan is dangerous for both the industrial divisions and its employees. It poses a risk to the working conditions of the remaining teams and does not guarantee the future.
However, in our opinion, there is another way; one that is more socially responsible and economically relevant. In its overall alternative, the Committee have proposed an alternative organizational model and investment policy that preserves Europe’s strategic manufacturing base, engineering and project Management capabilities, whilst still achieving the desired economic efficiencies.
The closure of the management mindset and the failure to take into account the warnings and recommendations issued by the committee and its expert throughout the procedure therefore leads the committee to totally reject the proposals put forward and we thereby express a negative opinion on the draft submitted for consultation.
STATEMENT BY THE EUROPEAN GE POWER COMMITTEE
31 AUGUST 2019
With the meetings of the European Committee of GE Power on July 25 and 26, the first phase in the information and consultation process concerning the separation of the POWER business into 2 industrial divisions and a massive restructuring plan is coming to an end.
This first phase of the consultation focused on the economic, market and strategic aspects that the Group is considering for the coming period.
Through the interim report of the committee's expert, we have received confirmation that the management’s project does not address the problem of adjusting to a structurally lower market level, but rather aims to increase the profitability of businesses by drastically reducing staff numbers in Europe, and by relocating part of the activities to other regions of the world, or even to external partners.
In particular, the Committee demonstrated that the plan does not address the real problems faced by G.E. POWER, in particular the $1.2 billion in execution, delay and non-quality problems experienced in 2018.
If GE were to decide to really address these issues, its POWER activities would be profitable, and there would be no question of restructuring them today.
In the coming days, the European Committee, supported by its experts and in collaboration with the employees at local level, will propose alternative solutions to guarantee the industrial future of European sites. These solutions will be presented to management at the end of September.
The announced separation of GE POWER effectively puts Mr. Larry CULP, CEO of the GE Group, as the sole joint decision-making manager for these 2 industrial divisions, and therefore as the legitimate interlocutor of the GE Power European Committee.
The Committee's representatives regret that discussions on the project have so far been held without his presence, and have requested him to attend, out of respect for the employees, the meeting that will offer alternative proposals. On the back of this document, you will find a copy of the letter that has already been sent to him.
These alternative proposals will be an important phase of the ongoing consultation. We therefore invite all European employees to remain mobilised behind their representatives, in order to continue to have an impact in the discussions.
Dear Mr. CULP,
As you are aware, information/consultation is currently taking place, at the level of the European Works Council, on the re-organisation of GE POWER.
Through the analysis of our expert Secafi, whose interim report is attached, it is confirmed that the adjustment to the market volume alone does not justify such a restructuring plan. Rather, it aims to increase the profitability of businesses by drastically reducing the number of employees in Europe and relocating part of the activities to other regions of the world, or even to external partners.
This whole strategy stems from your decisions to prioritize debt repayment, and to quickly increase business profitability.
Your desire to separate GE Power into two distinct industrial divisions means that you are now in charge of the management chain, able to respond for both perimeters.
Also, as provided for in point 3.4 of our agreement to set up the European Committee, your presence among us seems essential during this information / consultation process.
Please let me know if you are available for the meeting on 25 September in Paris. If this is not convenient for you, we can review the calendar to organise a session that you could then attend.
Thank you for all the attention you will certainly give to this request.
For the European GE POWER Committee
The Secretary
Gregory PASTOR
COMMUNIQUE OF THE EUROPEAN POWER COMMITTEE FOLLOWING THE MEETING OF 27 JUNE 2019
After three days of debate on 25, 26 and 27 June, we can only note that General Electric's management is once again having difficulty justifying its plan to reduce employment in Europe.
The number of times elected officials have heard "We will answer you later" shows that at this stage, management seems unable to demonstrate whether this project will work or whether it will solve a problem.
GE acknowledges that there will be a rebound in the Gas market, but also voluntarily makes the strategic choice to transfer activity to countries with low social costs, outsourcing and selectivity in this market by taking only high-margin and low risk business.
It's not the market that makes people redundant, but choices!
The European POWER Committee remains very skeptical and concerned about the viability
of the management plan. It does not demonstrate the security of essential processes. That of suppliers, factory networks, support functions, services, etc. The knowledge and experience of
employees in Europe is being transferred to low-wage countries outside Europe or simply abandoned. Moreover, the commitment to maintain Belfort as a world center of excellence for 50Hz gas
turbines known as Heavy Duty does not seem compatible in the medium term with the project presented as it stands.
Here too, we have the impression that Larry CULP decides, and that Europe must obey
even if it means destroying its industry.
It is becoming urgent for Europe to equip itself with the tools to protect its industry, otherwise all our jobs will be affected.
COMMUNIQUE OF THE EUROPEAN COMMITTEE
GENERAL ELECTRIC POWER - JUNE 14, 2019
Today, the European Committee began the information and consultation on the restructuring of the POWER industrial division, which includes the outsourcing of activities, relocations and the elimination of 1800 jobs in Europe, mainly in the support functions, the Steam and Gas business.
This is the third successive restructuring in 3 years; each time involving the loss of several thousand jobs.
This consultation follows various announcements made by the CEO of General Electric to his investors, without the members of the European Works Council ever having been informed in advance, about the decisions that affect them.
Since the creation of the GE POWER European Business Committee, delegates have consistently pointed out the financial vision for GE involves the distribution of $117 billion to its shareholders over the past ten years, thus challenging the company's very structure.
We have also regularly reported the structural problems encountered by our company: lack of autonomy of the entities, management not necessarily familiar with our businesses and markets, lack of investment, under-staffing and loss of skills that degrade the service provided to our customers.
The committee will therefore be very attentive and will ensure that General Electric does not use the excuse of a periodic market downturn as an excuse for a structural reorganization purely to increase its profitability at the expense of the sustainability of the industrial base.
We deplore the willingness of General Electric's leaders to promote a gradual withdrawal from Europe; at a time when, at the end of COP21, Europe has the greatest need to develop its energy sector.
The document transmitted by management on its project is incomplete in its present form.
- It notes serious economic difficulties, without making a clear diagnosis,
- It presents market prospects on the basis of the recent past, and without taking into account a predicted rebound announced in the medium term.
- It proposes the solution of industrial restructuring in Europe, without any real economic justification, and by sacrificing the future of General Electric's activities.
These missing elements are essential and must be obtained and analyzed in the context of the consultation.
Given the scale of the project and the importance of these social, economic and strategic consequences for Europe, it is essential that GE's management take the time for social dialogue. This involves a complete and in-depth presentation of his project.
The members of the European Committee General Electric POWER
APRIL 2019
Since September 2018, GE employees have had a new representative body: the EUROPEAN WORKS COUNCIL. (EWC). This body is composed of a central body (for everything common to at least two businesses); as well as 4 Subcommittees (Healthcare, Aviation, Renewable, and Power).
This EWC is the result of the duty of social engagement that GE had to give the European Commission following the purchase of the energy division of ALSTOM.
Today in the GE world, we have a new management structure, with a new CEO taking decision after decision with the sole and only target: debt reduction. This in order to ensure more dividends to shareholders. Even if this means destroying the jobs, know-how and skills that have made our various companies famous and profitable
This is why it is important for employees to be able to access information through their representatives to find out what will happen to sites, what is the company strategy, what are the social consequences of the company’s actions. These are all requirements of European Law.
However, at present the European Works Council is only being informed of things at the time of implementation. This prevents your elected representatives from being involved in the decision-making process and bypasses our legal right to be a source of proposals in order to maintain employment and activities. Management considers that the strategy of the company belongs to it alone.
We would like to inform you about this blocking attitude on the part of management and we call on all employees to mobilize with their elected representatives to make management understand how important it is to change their attitude and to establish a real social dialogue with its employees.
It is on this basis that your EWC Committee is considering legal action in the competent courts in order to defend the interests of all POWER employees in Europe.
Representatives of the European Business GE POWER Committee