An Update on COVID-19 GE Aviation Business Impact
EVENDALE, Ohio —May 4, 2020— GE (NYSE:GE) Vice Chair and President and CEO, GE Aviation David Joyce today issued the following message to GE Aviation employees:
Let me start by saying thank you for the way you all have responded during the COVID-19 crisis – staying focused on protecting the health of one another and supporting our customers, worldwide. This has enabled us to serve our great customers in their time of need, including the military and cargo operators shipping critical supplies around the world.
As this pandemic continues to advance, our understanding of its impact on our industry and our business has also evolved. The deep contraction of commercial aviation is unprecedented, affecting every customer worldwide. Global traffic is expected to be down approximately 80% in the second quarter when compared to the start of the pandemic’s effect in China in early February. Our aircraft manufacturers have announced reduced production schedules that will extend into 2021 and beyond reacting to the projected prolonged recovery.
To protect our business, we have responded with difficult cost-cutting actions over the last two months. Unfortunately, more is required as we scale the business to the realities of our commercial market.
We are developing our plan for permanent reductions to our global employee base that we anticipate will bring our total reductions this year to as much as 25% (including both voluntary and involuntary actions already announced).* In GE’s earnings call last week, we shared that Aviation is developing $1 billion of cost actions and $2 billion of cash actions in 2020, which includes these anticipated reductions.
These plans, which we expect will be ready over the coming months, are part of a comprehensive strategy we are developing for resizing the business consistent with the forecast of our commercial market. While extremely difficult, I am confident this is the required response to the continued contraction of the industry, and its protracted recovery. I am equally confident that the industry will recover over time and that we will be positioned to win.
Thank you for your resolve and determination during these trying times. And most importantly, thank you for supporting one another. Please know we are using the best possible resources to understand this pandemic and its impact on our business while plotting our path forward protecting our people, our customers and our business. We are one team and together we will come out of this with a strong affirmation of our purpose and a spirit to succeed.
Thank you for all that you do.
*Once our plans are ready, we will consult with employees and/or their representatives as required in accordance with applicable laws before those plans are finalized or implemented.
Caution Concerning Forward-Looking Statements
This document contains forward-looking statements – that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see https://www.ge.com/investor-relations/important-forward-looking-statement-information, as well as our annual report on Form 10-K and our most recent quarterly report on Form 10-Q. We do not undertake to update our forward-looking statements.
About GE Aviation
GE Aviation, an operating unit of GE (NYSE: GE), is a world-leading provider of jet and turboprop engines, components and integrated systems for commercial, military, business and general aviation aircraft. GE Aviation has a global service network to support these offerings. For more information, visit us at www.ge.com/aviation. Follow GE Aviation on Twitter at http://twitter.com/GEAviation and YouTube at http://www.youtube.com/user/GEAviation.
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