GE to cut 12,000 jobs in power business revamp
GE to cut 12,000 jobs in power business revamp
The US company launched the cuts to save $1 billion in 2018, saying it expected dwindling demand for fossil fuel power plants to continue.
“Traditional power markets including gas and coal have softened,” GE said.
Rumors of sweeping job cuts were confirmed by labor union sources on Wednesday, with staff in Switzerland and Germany among those badly hit.
“This decision was painful but necessary for GE Power to respond to the disruption in the power market, which is driving significantly lower volumes in products and services,” said Russell Stokes, head of GE Power.
“Power will remain a work in progress in 2018. We expect market challenges to continue, but this plan will position us for 2019 and beyond.”
New GE Chief Executive John Flannery last month outlined plans to shrink GE’s sprawling empire of businesses built up by predecessors Jeff Immelt and Jack Welch, whose strategy was based on spreading risk across a broad range of industries.
GE has previously said it would exit its lighting, transportation, industrial solutions and electrical grid businesses.
It also plans to ditch its 62.5-percent stake in oilfield services company Baker Hughes.
In Thursday’s layoffs, nearly a third of the company’s 4,500-strong Swiss workforce could be cut, while 16 percent of staff in Germany are also likely to be axed.
In Britain, about 1,100 positions will be affected, the company said.
GE employed 295,000 people worldwide at the end of 2016, according to the company website.
GE said it had begun talks with labor leaders about the steps.
Union leaders in Germany reacted angrily to the job cuts.
“The announcement by GE that it wants to cut thousands of jobs across Europe is neither strategically nor economically justifiable, and serves only to maximize short-term profit for shareholders,” said Klaus Stein, the representative of the IG Metall Union at GE’s plant in Mannheim.
“We are not going to accept this, and we will fight ... to preserve jobs.”
Demand for new thermal power plants dramatically dropped in all rich countries, GE said, while traditional utility customers have reduced their investments due to market deterioration and uncertainty about future climate policy measures.
Hardly any new power station projects had been commissioned in Germany in recent years, GE said. Heightened Asian competition had also increased price pressures.
GE rival Siemens is cutting about 6,900 jobs, or close to 2 percent of its global workforce, mainly at its power and gas division, which has been hit by the rapid growth of renewables.
Sipchem tops bumper earnings from Saudi petrochemical majors
LONDON: Saudi petrochemical producer Sipchem said its third-quarter profits surged by about half to SR180.3 million ($47.9 million) amid a brace of strong earnings from the sector.
The company also known as Saudi International Petrochemical Co, plans to merge with Sahara Petrochemicals as a wave of consolidation sweeps through the industry.
CEO Ahmad Alohali told Al Arabiya that the company’s third quarter performance was encouraging.
“Product prices varied,” he said. “Prices of nine of our products rose between 14 percent and 30 percent, as every product has its own dynamics. Production efficiency of Sipchem’s plant also improved.”
He also told the broadcaster that the ongoing US-China trade war could affect Sipchem, making it shift shipments from one market to another, he said.
Elsewhere, Yanbu National Petrochemical, also known as Yansab, overcame an increase in some of its feedstock costs to record a 13 percent jump in third quarter net profit to SR729 million compared to a year earlier.
It said the increase in profitability was down to higher average selling prices for most of its products.
Meanwhile, Saudi Kayan Petrochemical said net profit for the period rose by about 24 percent to SR471.9 million compared with a year earlier.
An improvement in productivity at some of its plants helped to drive profits higher, it said in a filing.
Saudi petrochemical producers from SABIC to Sahara are seeking to boost output and efficiency while oil companies such as Saudi Aramco are also increasingly looking at crude to chemicals technology to tap into the changing industry demand drivers.
Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then, according to the International Energy Agency (IEA).
“Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves,” said Fatih Birol, the IEA’s executive director.
“Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation,” said Birol in a report earlier this month.
The Middle East remains the lowest‑cost center for many key petrochemicals.
Saudi Arabia and the wider Middle East are at the lower end of the cost curve among petrochemical-producing regions for primary chemical production.
Currently the region accounts for 12 percent of the global production of high-value chemicals, 9 percent of ammonia production and 15 percent of the methanol market.
In addition it also has huge growth potential with 90 percent of naphtha output currently exported instead of being used as petrochemical feedstock because of the ample availability of