GE Cuts Jobs, Closes Foundry at Lufkin Unit
25 August 2015 - 8:02AM
Dow Jones News
By Ted Mann
General Electric Co. plans to close a historic foundry and
eliminate more than 250 jobs at its unit in Lufkin, Texas, as the
company deals with a drop-off in demand for drilling equipment in
the wake of plunging oil prices.
GE told local officials on Monday that the company will close
one foundry in the city and cut jobs at another facility nearby.
The two facilities were part of Lufkin Industries, a maker of
oil-pumping and drilling equipment that GE bought for $3.3 billion
in 2013.
"This was a tough decision to make," GE spokeswoman Stephanie
Cathcart said in an email. The decision to close the foundry was a
result of "increasingly challenging market conditions," she
said.
GE will eliminate a total of 262 positions at the two sites in
Texas' Angelina County, adding to the roughly 500 Lufkin job cuts
that it has announced this year.
The reductions come as oil prices plunged to fresh six-year lows
Monday amid worries about a slowdown in demand from China and a
buildup of oil supplies in the U.S. The fall in oil prices has
forced GE to cut its forecast for revenue and profit from its oil
and gas equipment business by 10% this year.
Lufkin Industries has been especially hard hit by the decline in
demand for drilling equipment. Orders for its products dropped 40%
in the second quarter, GE Chief Financial Officer Jeffrey Bornstein
said in July.
Lufkin Mayor Bob Brown said city officials were braced for bad
news from GE when the company sought a meeting Monday.
"They haven't brought good news to our office in a long, long
time," Mr. Brown said. The city has worked with GE to try to
encourage growth since the company bought Lufkin Industries, an
industrial presence in the small city since the early 20th century,
he said.
"When they say they're going to dismantle the foundry, that
pretty well seals the deal," Mr. Brown said. "I just passed the
back gate and saw guys walking out of there with their heads down,
and that just breaks my heart."
Write to Ted Mann at ted.mann@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 24, 2015 17:47 ET (21:47 GMT)
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