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GE Cuts 12,000 Jobs In Response To Falling Demand For Fossil Fuel Energy (qz.com)
In response to the drop in demand for fossil fuel energy, General Electric -- the world's largest maker of gas turbines -- announced plans to cut 12,000 jobs. Quartz reports: Those cuts will mostly come from GE's power division, which makes energy-generation technologies. The reduction will account for 18% of the division's workforce and affect both professional and production employees, the company said in a statement. The majority of job losses will occur outside the U.S., Bloomberg reports. In a statement, Russell Stokes, the division's president and CEO, said disruptions to the power market were "driving significantly lower volumes in products and services." Demand for GE's power-generation equipment has stalled in part because of renewable energy growth, says Robert McCarthy, an analyst at Stifel Financial.
The move is part of a larger restructuring effort under GE's new chief executive John Flannery, who has faced immense pressure to regain the company's footing since taking the helm in June of this year. GE's stock price plunged 44% this year, the worst performer on the Dow, according to Bloomberg. The company aims to cut $3.5 billion of expenses across its divisions by the end of 2018, including a $1 billion cut from the power division.
The move is part of a larger restructuring effort under GE's new chief executive John Flannery, who has faced immense pressure to regain the company's footing since taking the helm in June of this year. GE's stock price plunged 44% this year, the worst performer on the Dow, according to Bloomberg. The company aims to cut $3.5 billion of expenses across its divisions by the end of 2018, including a $1 billion cut from the power division.
A large part of General Electric's power division consists of the former power division of Alstom that was bought by GE in 2015 for € 12.4 billion. Alstom may have made a much better deal than it seemed at the time.
Only $1B of the $3.5B in cuts is in the power division, so to claim it is all due to response to falling fossil demand is incorrect or disingenuous. But accuracy isn't really something slashdot has cared about it some time.
1) growth rate of demand is down. Historically, the US could rely on an average 2% growth of peak load a year. That pattern halted in 2007, thanks to the economic downturn plus energy efficiency plus load response programs. In 2017 we have only matched 2008 peak load in the US.
2) extended life of existing plants. In a regulated industry, you overhaul a couple of times and replace with new tech. With deregulation, everyone is squeezing life and extra MW out of everything
3) increased renewable. Wind and solar only make up 15% of total US generation, but that's 15% of new build that wasn't a GE or Siemens steam turbine.
4) increased efficiency. An old 7FA topped out at about 50 MW, but new designs can run up to 120 MW per turbine at lower costs.
5) government subsidies for nukes and coal. The industry was banking on the CPP killing off coal, and now states are proposing subsidies for their "jobs programs" power plants. This adds uncertainty to the future and probably reduced orders.
6) terrible investment in Alstom. They paid peak prices thinking they were going to get steam tech, when all they got was a bloated workforce protected by European labor laws
In fairness to GE, in the power space we're faced with basically a freeze on new power generation capacity. It's hard enough to replace what we're retiring, but new plants are subject to so much political scrutiny. One side wants the cleanest per kWh, the practicality and the pollution caused in construction be damned; the other seems to want the dirtiest possible power as a form of perverse value signalling to their horribly misinformed base.
The result is that nothing much gets built, and when it does it's already running late and overbudget by the time they lay the foundation. Which suits both sides, because then they can point at the other side and blame them...
If power generation continues to be a political game, it's one we're going to be playing in the dark in a few years.
Maybe Asia, but solar is offline across NA, SA, Europe, Africa and Australia for most of the night, as they don't span enough of the solar footprint - especially in winter months.
And yet they have solar installations even in Alaska, where the nights get pretty long. Obviously it isn't much use in the dark months, but they save a lot of money, and conserve their diesel fuel for the times its desperately needed.
The technical issues of utilizing solar are largely overrated, and shrinking constantly.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.