General Electric to furlough half of its aviation engine manufacturing workers

As
Coronavirus continues to hurt the aviation industry, General Electric announced
on Thursday that it plans on placing 50% of its staff in the aviation engine
manufacturing segment on furlough. GE’s move is expected to affect thousands of
workers and is initially planned for the next four weeks.

The
American multinational conglomerate had previously
announced a 10% job cut in its aviation unit as COVID-19 curbed global
demand for travel and tourism. As per the report, 2,600 workers in total were
out of jobs as a result.

Airlines
Are Resorting To Grounding Fleets Due To COVID-19

With
the health emergency having brought air travel to a near halt, the majority of the
worldwide airlines are now resorting to postponing new aircraft orders and
grounding fleets to minimize costs and surviving through the economically
challenging time of the pandemic. Amidst the chaos, GE has been pushed into
furloughing half of its aviation engine manufacturing workers.

According
to a GE spokesperson:

“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. We appreciate
the commitment of all our employees during this difficult time, and we regret
having to take this action. We will continue to deliver for our customers and
preserve our capability to respond when the industry recovers.”

The
Coronavirus driven damage to the aviation industry is also expected to reflect
in the financial performance of GE’s
major customers like European Airbus and its North American rival, Boeing.

Earlier
this week on Thursday, the Boeing Company had announced that in an attempt to
minimize costs, it plans on offering buyouts to its employees.

Airbus
And Boeing Use GE Engines In 65% Of Aircrafts

According
to analyst Richard Aboulafia of Teal Group, over 65% of the commercial aircraft
fleet of Boeing and Airbus combined uses engines manufactured by General
Electric.

Following
the announcement, General Electric was reported trading 3% up in after-hours
trading on Thursday. At £5.72 per share, however, the stock is still around 40%
down year to date in the stock market.

Its
performance in 2019, on the other hand, was reported fairly upbeat with an
annual gain of a little more than 30%. Owing to the ongoing health crisis, the
company has lost all of its 2019 gains in the first three months of 2020. General
Electric currently has a market cap of £49.16 billion.