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LYNN — Like an island bathed in sunshine but surrounded by stormy seas, General Electric Aviation’s River Works plant is hiring at record levels and shouldering big aviation contracts even as GE works its way out of a corporate slide.
Company executives hosted a ribbon-cutting ceremony a month ago to inaugurate the River Works assembly and shipping area for the new T408 helicopter engine.
The ceremony capped off GE Aviation’s success in landing a $143 million initial production contract in 2017 to build 22 engines to power a new Marine Corps heavy-lift helicopter.
State Rep. Peter Capano retired from a 29-year career with GE last week and said the T408 production spooling up this year is just the latest chapter in a River Works success story written since 2017.
“The company has hired more than 400 people over the last year and a half. The last time I heard of that happening was the 1970s,” Capano said.
River Works management and union employees are looking beyond the T408 to competing for the Improved Turbine Engine Program (ITEP) contracts to power U.S. Army Black Hawk and Apache helicopters. The competition pits GE Aviation against a combined effort by aviation engine manufacturers Pratt & Whitney and Honeywell to grab the ITEP work.
Capano is confident the River Works could be building the next generation helicopter engine for the military.
“Aviation is doing good and Lynn stands to do well,” he said.
GE saw poor stock performances in 2017 and 2018 and a turnover in its top executives with current CEO Larry Culp on the job for three months.
Dr. Lawrence Davis, chairman of the history, government and economics departments at North Shore Community College, said it is not unusual for one division of a major corporation to do well while the corporation as a whole does poorly.
He said the peak combat years in Iraq between 2003 and 2007 provided a proving ground for military equipment designed and built in the 1990s. That real-world testing spawned technological innovations that translate into new designs for helicopters and other equipment and business opportunities for GE Aviation and its competitors.
Davis warned that GE Aviation is not immune to buffeting by economic winds of change including the tariff fight with China and a reduced military presence in the Mideast.
“A bunch of things are up in the air that could impact GE in Lynn,” he said.
Ward 7 City Councilor Jay Walsh, who just retired from a 16-year GE career to help run his family’s West Lynn heating oil business, said the River Works is pushing hard to replace retiring machinists with younger employees.
GE struck up a machinist internship program with Lynn Vocational Technical Institute that Walsh said can dovetail with the River Works hiring wave. Walsh and Gorham credited agreement between GE management and the International Union of Electrical workers with helping to trigger the wave.
A 2017 agreement hammered out by both sides allowed GE to hire new employees at a reduced hourly wage and then gradually increase the hourly wage by a dollar a year over 10 years. Dubbed “market-based wage,” the agreement was a company-union success story for the River Works.
“People are dying to work there,” Walsh said.
River Works employment is currently stable at 2,500 employees but GE Global Communications representative Richard Gorham said the company is actively seeking to fill machinist jobs.
“Losing experience and talent is a challenge to overcome and one that reinforces our need to collaborate on development of external pipelines for manufacturing positions,” he said.
It’s no surprise to Salem State University economics department chairman Dr. Ken Ardon that a strong economy is translating into contract orders for the River Works.
Culp’s efforts to strip down and shape up GE don’t necessarily translate, Ardon said, into the corporation eventually splitting into independent divisions. He said the attention paid to new startup firms masks a trend in business consolidation, fueled in part by weakly-enforced anti-trust laws.
“More and more business is going to large corporations,” he said.
Davis said the River Works’ ability to stay competitive and land civilian as well as military aviation engine contracts will help it outpace turmoil engulfing GE and a fast-moving economy.
“I could see the Lynn plant staying strong,” he said.
