Saturday, February 3, 2001
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Posted on: Saturday, February 3, 2001

GE dismisses layoffs report

Associated Press

FAIRFIELD, Conn. — General Electric Co. dismissed as false and mere guesswork a BusinessWeek magazine report that it plans 75,000 job cuts over the next two years.

Spokesman Gary Sheffer said Thursday that while chairman Jack Welch announced last month that significant layoffs were likely, the number has yet to be determined.

"The numbers being discussed are purely speculative, and because of that, inaccurate,'' Sheffer said.

The magazine, citing analysts who have spoken to GE executives, said some 50,000 of the cuts would come from GE's $45 billion merger with Honeywell International Inc. The report is in the Feb. 12 edition released Thursday evening.

Yesterday, USA Today published a similar report. Citing Wall street analysts, the paper said GE is expected to lay off as many as 80,000 people after it completes the Honeywell merger.

Honeywell spokesman Tom Crane said he did not know when the companies would announce layoff numbers, but said the merger is still on track to be completed by the end of March.

Honeywell International has about 120,000 employees worldwide. It was created in December 1999, when Minneapolis-based Honeywell was acquired by AlliedSignal, which is based in Morris Township, N.J. The new company set up headquarters in Morris Township.

GE employs about 340,000 people worldwide.

GE and Honeywell said last October that Honeywell's headquarters would be closed as part of the merger and about 550 people there would lose their jobs.

In mid-January GE reported double-digit profits for the fourth quarter and all of 2000, with six of eight major business segments seeing operating profits increase by 10 percent or more.

But at the same time Welch, who is retiring at the end of this year, warned of "significant'' job cuts once the Honeywell merger was completed. He said the cuts would be fueled by three factors: volume slowdowns, increased efficiency as Internet initiatives mature and eliminations of duplicate positions in the two companies.

"Anybody who's putting numbers of those kinds of activity is speculating, particularly with the acquisition of Honeywell,'' Sheffer said. "Our integration planning for GE and Honeywell is not completed.''

Analyst Nicholas Heymann of Prudential Securities Inc. said large-scale layoffs would not be a surprise, given the pending merger and GE's push to put more of its functions on the Internet.

"The company is very cognizant of how long and how deep this (economic) downturn may be ... and therefore it wouldn't be surprising to see them be pre-emptive in adjusting their staffing levels,'' Heymann said.

But Heymann said a sweeping announcement is unlikely.

"It isn't GE's style,'' he said. Instead, Heyman predicted, GE will make local announcements at individual facilities as it cuts a few hundred jobs here and there.

Harriet C. Baldwin, a multi-industry analyst at Deutsche Banc Alex. Brown Inc. who follows Honeywell, said she hasn't heard any layoff numbers.

There was no mention of layoffs when Honeywell reported quarterly earnings last Friday, she noted. "They didn't even have a conference call'' where analysts could have raised the question, she said.

On Thursday, GE stock was trading up 25 cents to close at $46.23 a share on the New York Stock Exchange.

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