GE Aircraft Engines, the world's largest jet-engine maker, Wednesday said it expects to cut about 4,000 jobs worldwide, including about 800 in Greater Cincinnati.

        The planned cuts come as a result of the slowdown in commercial aviation following the Sept. 11 attacks on the World Trade Center and the Pentagon.

        The cuts will take effect starting next month and will continue into early next year. They represent about 13 percent of GEAE's worldwide employment of 30,000 and about 10 percent of the 8,000 the company employs in Greater Cincinnati.

GEAE HISTORY

A look at General Electric's jet engine business in Cincinnati:     1948: GE officially moves into the former Wright Aeronautical piston-engine plant in what was then Lockland to produce its new J47 engine.     1950: With the outbreak of the Korean War, the GE plant expands rapidly. In 20 months, employment increases from 1,200 to 10,000, and GE moves engineering for the J47 to Cincinnati.     1952: Evendale incorporates as a village, and the Lockland plant becomes the Evendale plant.     1965: The Air Force awards GE's jet engine business the largest contract to that point, a $459 million agreement to produce the TF39, the first high-bypass turbofan engine, for the C-5 “Galaxy” transport.     1968: GE launches a commercial version of the high-bypass engine, the CF6-6, for DC-10 jetliners.     1971: GE and Snecma, the French engine maker, agree to develop the CFM56, an engine in the 20,000-pound thrust class.     1987: GE's aircraft engine business group is renamed GE Aircraft Engines and employment in Evendale peaks at more than 20,000, largely because of Reagan-era military spending.     1993: GE says it will eliminate 1,400 jobs at Evendale by moving various operations, including CF6 and F110 engine assembly and airfoil manufacturing, to plants in the South.     1995: The new GE90 engine is certified at 84,700 pounds of thrust and the huge engine enters service powering Boeing 777s for British Airways.     1997: As part of a push into service businesses by its corporate parent, GE Engine Services, a two-year-old business to do engine repair and maintenance, acquires Greenwich Air Services, more than doubling its revenues to more than $4.5 billion and expanding GE Aircraft Engines as a major airline services provider.     1999: The growth version of the GE90 is picked as the exclusive power plant for new long-range versions of the Boeing 777 widebody jetliner expected to enter service in 2003. The decision, expected to generate up to $20 billion in revenues for GEAE over 20 years, is also seen as validation of the company's decision to invest billions in a new large engine a decade earlier.    Sources: GE Aircraft Engines, Enquirer research

GEAE DECLINE

A look at the decline in GE Aircraft Engines Greater Cincinnati employment in the past decade.     1990 — 18,900     1991 — 17,300     1993 — 13,000     1994 — 8,500     1995-2001 — Fluctuated between 8,000 and 8,500

        Dave Calhoun, GEAE president, who outlined the cuts in an employee Webcast, said the slowdown in aircraft orders and deliveries since the attacks forced the company to take action.

        “Sept. 11 accounts for the lion's share of these moves,” he said. “We were anticipating a slowdown (before Sept. 11) that might have resulted in some layoffs, but nothing that would be newsworthy in my view.”

        Mr. Calhoun said the job cuts will be spread across all parts of the company — salaried and hourly workers — and will include its production, engineering and services businesses.

        The company also said it would cut up to 250 jobs at its Lynn, Mass., operations.

        A spokesman said the cuts will include about 600 salaried employees and 2,400 hourly across GEAE's worldwide employment. The actual number terminated could be smaller because the company will offer voluntary severance and retirement programs to eligible workers.

        Employees who are terminated will receive severance benefits and help in finding new jobs, GEAE said.

        Some GEAE employees said they were disappointed by the news but hoping the airline industry can rebound.

        "The best thing we can say is we're expecting the worst but hoping for the best,” said Gary Jordan, president of United Auto Workers Local 647, which represents 1,100 production workers at the Evendale plant.

        Mr. Jordan said GEAE plant managers said Wednesday that about 70 Local 647 members would lose their jobs in the planned cutbacks. That's on top of 17 who are already laid off and had hoped to be recalled early next year.

        Evendale Mayor Doug Lohmeier said it's too early to know how the job cuts will affect the village, which has 3,100 residents.

        “I'm sure there will be some impact on us, but I don't know exactly what it will be,” he said. “It's unfortunate that they have to lose jobs, and we have to lose revenues.”

        Bill Fiala, an analyst at Edward Jones & Co. who rates GE's stock a “hold,” said, “They really had no choice, given the troubles facing the U.S. airlines.” He estimates that General Electric's engine deliveries will decline 20 percent next year, and the unit's sales will drop more than 10 percent.

        Mr. Calhoun said the job cuts are one step by GEAE to cut a projected $500 million out of its costs by next year.

        “That's a tall task, but this is a move that helps us get there,” he said, adding that the company will be looking at cutting other expenses as well.

        Mr. Calhoun said the situation remains fluid and could get worse or better in the weeks ahead.

        “The public will fly again,” he said. “We've taken what we think are prudent judgments on how much it will come back, (but) we don't think it will get to pre-Sept. 11 (passenger) loads until 2003 at the earliest.”

        GEAE's cutbacks, its largest in six years, come on the heels of Delta Air Lines' announcement last week that it would cut 13,000 jobs, including up to 825 of the 5,000 it employs in Greater Cincinnati.

        Nationwide, airlines have announced plans to cut almost 100,000 jobs in the face of an average 20 percent decline in passenger traffic.

        Because so much of Greater Cincinnati's economy is based on transportation — from the Cincinnati/Northern Kentucky International Airport to GEAE — the region might suffer more than some other communities, said George Vredeveld, economist at the University of Cincinnati.

        “We're probably going to be hurt a lot harder than other communities because our airport is so much larger,” he said.

        The GEAE cutbacks could hurt even more than those at the airport, he said, because manufacturing jobs typically support a larger number of support-type jobs.

        “On the average, every one job you lose has an impact on 1.8 other jobs,” he said. But the ripple effect of GEAE's cuts is much higher, he said — well above two support jobs for every one position eliminated at GEAE.

        “Dominant companies like GE Aircraft Engines tend to attract a lot of suppliers,” he said. “They tend to build up industries around them."

        But Jerry Flyr, general manager of Meyer Tool Inc., a Camp Washington company that machines turbine blades for GEAE and other engine makers, said his company expects to weather the current downturn.

        “We're not seeing any impact from GE right now,” he said.

        Meyer employs about 500 at three Greater Cincinnati plants.

        Much of its work for GEAE is repairing service parts for its customers.

        Mr. Calhoun said that within the last week, GEAE has begun to see a decline in its service business as airlines cut back their flight schedules in the face of slowing passenger traffic.

        GEAE's service business represents up to 60 percent of its $11 billion in revenues.

        “It's lower, and the question is how low will it go,” Mr. Calhoun said. “We're assuming somewhere in the neighborhood of a 10-15 percent reduction in spare-parts orders over the course of the year next year.”

       Enquirer reporter Steve Kemme and Bloomberg News contributed to this report.
       

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