GE: Schenectady still key to Power division
Company moving on after $200M SEC fine
Three years ago, General
Electric Co.’s power plant equipment manufacturing division, GE Power, was reeling.
The Schenectady-based division’s CEO, Steve Bolze, had left the company in 2017 after being passed over to replace Jeff Immelt as CEO.
Bolze was replaced by Russell Stokes, a longtime GE executive based in Atlanta.
Stokes inherited a GE Power division suffering amid a global glut of power plants, and had to oversee a massive $1 billion cost-cutting program that included eliminating 12,000 jobs worldwide.
Hundreds of jobs were cut at GE’S main Schenectady campus, once the headquarters for all of GE following its founding by Thomas Edison, as well as at its research center in Niskayuna.
Suddenly, GE Power’s ties to Schenectady appeared to be on the slide, and GE officials wouldn’t even say if they had moved GE Power’s headquarters to Atlanta or not.
GE’S employment in the re
gion, although never exactly verified, dropped from roughly 6,000 people to about 4,500 over several years.
And GE’S stock crumbled, falling from $28.66 at the start of December 2016 to $11.33 as of this week.
Worse yet, GE revealed that both the U.S. Securities and Exchange Commission and the Department of Justice were investigating accounting practices at GE Power.
GE set aside $100 million in potential fines related to the SEC investigation.
But on Wednesday, GE and the SEC revealed they had reached a $200 million settlement on GE’S accounting practices in both its GE Power and its legacy insurance business.
The fine is expected to help current GE CEO Larry Culp Jr. in his plan to get GE, including its power division, back on track.
“We have concluded that it is in the best interests of GE and its shareholders to resolve this matter and put it behind us on the basis announced today,” GE said in a statement Wednesday.
Stokes was named head of GE Aviation Services last month. Dan Janki, who has also been based in Atlanta, is the new head of GE Power.
And for the first time in years, GE officials confirmed that Schenectady, where GE still makes steam turbines used in combined-cycle power plants, still holds a lot of sway with the company.
“Schenectady continues to be (the) headquarters for the business,” GE spokeswoman Mary Kate Mullaney said.