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Thursday, December 3, 1998 Published at 17:41 GMT

Business: The Company File

GEC axes 1,500 jobs

GEC is slimming down ahead of a possible merger

Defence and engineering group General Electric Company is to cut 1,500 jobs as it attempts to reinvent itself as a modern high technology company.

The group said it had introduced a voluntary redundancy scheme at its Marconi Communications division with the aim of shedding 1,000 staff.

The redundancies will come at the group's Chelmsford and Dagenham plants, which each employ around 700 staff.

[ image: Jobs are to go at Marconi]
Jobs are to go at Marconi
A further 500 jobs will be cut from the group's Marconi electronics division which has sites scattered around the UK.

Around 500 jobs have already been axed from the electronics business this year.

Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said of the GEC job losses: "This is a heavy blow to many people who have worked productively for the company.

"We will do everything we can to minimise the impact of this announcement on the workforce and their families."

The cuts come as GEC is limbering itself up as a possible takeover target - in the latest round of consolidation in the defence industry.

Healthy profits

The news of job losses emerged as the group unveiled booming profits.

Pre-tax profits for the six months to September 30 were £1.39bn - up from £415m for the same period last year.

The dramatic increase was attributed to the flotation of Alstom, GEC's joint venture with French group Alcatel, and the complex effect of a raft of disposals and acquisitions.

However, operating profits, which exclude the exceptional earnings, were also up at £358m from £295m last year.

Future plans

The Marconi Communications division was formed earlier this year after GEC took control of telecommunications group GPT.

The company which already owned 60% of GPT bought the outstanding 40% from German firm Siemens for £700m.

In its statement to the Stock Exchange GEC said: "Marconi Communications is a central element in the group's plans to become a high technology, high margin, high growth company and delivered total sales of £822m."

The electronics giant has also said it is only weeks or months away from a strategic defence link-up.

Company chairman, Lord Simpson, said that GEC had been in "intense discussions for several months with a number of major participants in the global defence industry."

GEC has been linked to British Aerospace, Thomson-CSF and various American defence contractors.

The task has been made more urgent by the proposed formation of a European defence giant, combining British Aerospace with Germany's DASA and France's Aerospatiale.

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