Oct. 06--WEST BURLINGTON -- General Electric plans to close its switchgear plant here by this time next year, employees were told Tuesday.
The plant has 243 employees.
"It is very difficult to make this announcement due to the impact it has on our people," general manager Tom Patmore said in a statement. "However, the business dynamics make it imperative that we propose this action. Since 2001 our profitability has steadily declined, demonstrating that we cannot effectively compete against low-cost suppliers with our current cost structure."
A final decision, though, will not be made until after a 60-day "idea-generation period" whereby cost-cutting measures will be studied.
Patmore noted the company will review and consider any proposals during that period. Employees have been invited to participate in those discussions.
Dennis Hinkle, president and CEO of Grow Greater Burlington, said the development organization would use all the tools at its disposal to try to keep the plant open.
Already, officials with the Iowa Department of Economic Development have been notified.
Jason Hutcheson, executive director of Grow Greater Burlington, said the state agency has specialists devoted to working with existing industries.
"The department takes announcements like this very seriously," he said. "We've talked about options that are available. We'll work with local leadership, and we know that local leadership is committed to preserving employment, if possible."
Hutcheson noted General Electric pays some of the best wages in the area.
"Well above the $16 per hour average," he said.
"The fact that the company is willing to look at possibly staying, we have to take that as a positive. We're prepared to offer whatever assistance we can."
Hinkle acknowledged the odds are long at preserving the plant, but was optimistic about the 60-day window.
"We felt like they (the GE officials) are going through this process," Hinkle said. "We'll do what we can to save and preserve the jobs there."
Patmore said if the decision is made to phased out operations, it won't happen sooner than a year from the announcement date. Manufacturing operations would be moved to another North American facility where there is excess manufacturing capacity, possibly in North or South Carolina.
Ross Monks, human resources manager of GE Energy-Industrial Solutions, said 220 employees would be affected. Sixty percent of those would be eligible for a retirement package.
"If the final decision is to close the plant, we intend to take advantage of the long lead time before the closing, the cash benefits, and other comprehensive support to assist our Burlington workforce through this transition," Patmore said. "We offer excellent benefits, and our goal will be to help our employees make a successful transition to retirement or other work in the community. All eligible employees would receive the full GE Job and Income Security benefits for which they qualify if the plant closes as proposed."
Employee benefits could include:
-- Retirement options;
-- Lump severance pay in conjunction with government unemployment benefits;
-- Continued medical, dental and life insurance for one year for employees and their covered dependents, with coverage continuing beyond one year for those eligible to retire;
-- Preferential placement for open jobs at other GE manufacturing locations;
-- Up to $12,500, payable within three years, for education and retraining expenses to help prepare for a new job or occupation; and
-- Outplacement assistance.
Should GE close its switchgear line, Patmore said it plans to keep its quotation, requisition engineering, IT and technology teams in the West Burlington.
Two years ago, GE its medium-voltage switchgear operations, completing a "long-term alliance" it had with Houston-based Powell Industries. Nearly 300 local jobs were affected since that deal was announced in 2005.