Market Overview

GE Aviation Furloughs Half Its Engine Manufacturing Workforce Amid Coronavirus Pandemic

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GE Aviation Furloughs Half Its Engine Manufacturing Workforce Amid Coronavirus Pandemic

Thousands of workers in General Electric Company’s (NYSE: GE) aviation subsidiary are impacted as company furloughs half its aircraft engine manufacturing workforce.

What Happened

The ongoing coronavirus pandemic is hitting the aviation industry hard, as airlines ground planes and delay orders for new planes.  The crisis is forcing GE aviation to furlough 50% of its staff for four weeks. This measure is in addition to the 10% cut in jobs announced last month.

A GE Aviation spokesperson told CNBC, “Due to the unprecedented impact of COVID-19 on the commercial aviation industry, GE Aviation is implementing a temporary reduction in commercial engine assembly and some component manufacturing operations for up to four weeks.” 

The spokesperson appreciated the commitment of GE Aviation’s employees at “this difficult time,” and said that the company regretted taking this action. Regarding the continuance of business, he said, “We will continue to deliver for our customers and preserve our capability to respond when the industry recovers.”

Why It Matters

The aviation sector is grappling with the effects of the coronavirus pandemic. One of GE Aviation’s customers, Boeing Co (NYSE: BA), announced earlier that it would offer voluntary layoffs to employees. Boeing employs 150,000 people globally. 

Airline workers, too, are facing a cut in working hours, with major carriers such as Delta Air Lines Inc. (NYSE: DAL), United Airlines Holdings Inc. (NASDAQ: UAL) reducing working hours. American Airlines Group Inc. (NASDAQ: AAL) is offering paid leave and early retirement to staff. 

Price Action 

GE shares traded 1.74% higher at $7.02 in the after-hours session on Thursday. The shares had closed the regular session 1.99% lower at $6.90.

Photo Credit: Public domain photo via Wikimedia.

 

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