GE’s Pennsylvania plant to cut 575 jobs

General Electric Co., under pressure from an activist investor to cut costs, plans to end most locomotive manufacturing at a century-old Pennsylvania factory during a sharp downturn in the domestic rail market.

As many as 575 jobs would be eliminated from the Erie plant through 2018 as GE shifts production for international customers to a lower-cost facility in Fort Worth, said the head of the company’s transportation business. Workers in Pennsylvania were told Thursday morning of the proposal, which is subject to a 60-day bargaining period with union officials.

“We’ve been operating in a challenged North American locomotive market,” Jamie Miller, chief executive officer of GE Transportation, said in a telephone interview. “This action is taken so we can be as competitive as we can be.”

Trimming costs is a priority across GE as it looks to strengthen operations after several quarters of weak earnings and a slumping stock price. The Boston-based manufacturer agreed earlier this year to deeper cost cuts through next year after discussions with shareholder Trian Fund Management, the company co-founded by Nelson Peltz.

About 2,000 jobs will remain in Erie, which is still the largest GE Transportation site, Miller said. While some component manufacturing will stay, the facility will be focused primarily on design, engineering and prototyping. No jobs are moving overseas, she said.