From Erie to India: GE built a city to fill record-setting locomotive order
General Electric isn’t just building a new fleet of locomotives for India.
It’s building up the economy of one of India’s neediest states.
As employees at GE Transportation’s Lawrence Park factory near Erie churn out the first locomotives for India, workers in Marhaura, a small town in Bihar, India, are busy building a 500,000-square-foot factory that will build the bulk of the order.
“This is the first time a large manufacturing industry is being created in that state,” Nalin Jain, head of GE Transportation in India, said on a video call from India. “We’re not only in the business of building locomotives. We are nation-building.”
Building 1,000 locomotives
GE gave the Tribune-Review a first look this month at one of the first two completed locomotives bound for India. The 74-foot-long, 291,000-pound beast was parked on a set of tracks outside the Lawrence Park factory.
India’s Ministry of Railways awarded GE a $2.6 billion contract in 2015 to build 1,000 locomotives for the country.
It’s the largest single locomotive order the industry has ever had, said Richard Simpson, vice president of GE’s global supply chain. It is GE’s largest order ever in India.
The GE factory in Lawrence Park and later in India will need to churn out an average of about two locomotives a week for the next 10 years to meet India’s demand.
GE’s factory in Grove City will build the engines — “The core of the locomotive,” Jain said — for all 1,000 Evolution Series locomotives. The first 40 or so locomotives will be fully built and assembled in Lawrence Park and shipped to India. The next 60 or so will go over as kits — boxes of locomotive parts — and be assembled in India. The final 900 will be manufactured and assembled in India.
The GE deal is part of $137 billion the Indian government plans to invest to modernize the country’s rail system by 2020. India has more than 41,000 miles of rail. Locomotives carry about 8.3 billion passengers a year and more than 1 billion tons of freight.
GE’s Indian locomotives will have a bright red and yellow paint job.
GE beat out Caterpillar and Electro-Motive Diesel Inc., a locomotive company in Illinois, to win the Indian contract. Plans to build the locomotives in India and invest in the Indian economy were part of the requirements for the contract. The 4,500 horsepower and 6,000 horsepower diesel-electric locomotives will replace India’s aging fleet or diesel locomotives with technology dating to the 1970s and 1980s. The locomotives will meet emissions standards in India but will be about 10 to 15 years behind technology in the United States, said Alan Hamilton, GE Transportation’s general manager for systems, propulsion, electronics and advanced controls.
‘It keeps us working’
The Indian order won’t create jobs in Lawrence Park or Grove City, but it does help secure them, Simpson said. The Lawrence Park facility employs about 3,000 people and 1,000 work in Grove City.
Job security is good news for GE Transportation workers. The company laid off nearly 1,400 employees — about third of the Lawrence Park workforce — since early 2016. A slew of early retirements took another 200 or so employees.
Erie’s unemployment rate jumped 2 percentage points — from about 5 to 7 percent — between December 2015 and July 2016, according to the U.S. Bureau of Labor Statistics. The unemployment rate has fallen since, settling at 5.7 percent, preliminary data showed.
“It keeps us working, the guys that are here, but it doesn’t do a whole lot for the guys who are looking to return to work,” said Scott Slawson, the union president of Local 506 of the United Electrical, Radio and Machine Workers of America, which represents workers in Lawrence Park. “It’s going to be some work for us and in a time when we’re scraping for work, that’s a good thing.”
Slawson, who was in the middle of navigating another 17 layoffs at the factory when he spoke to the Tribune-Review, said the Lawrence Park facility was designed to build 1,000 locomotives a year, but now it builds fewer than 150 a year. North American railroads aren’t buying new locomotives, and competition is steep for the few domestic and the foreign — like India — contracts.
The Lawrence Park factory is also set up to produce equipment for offshore drilling rigs and mining. Neither of those industries is booming either, Slawson said.
“I’d like to tell you it meant a lot more,” Slawson said of the India contract. “At the end, it will be 100 locomotives. That’s good, don’t get me wrong. Unfortunately, in an ever expanding global community, the countries themselves, they are looking for local content.”
Slawson said he felt GE could have done more to keep more work on the India contract in Lawrence Park instead of moving it to India. He said he worries what will happen eight, nine, 10 years down the road. Would the India factory take Pennsylvania jobs?
Simpson said many components for all 1,000 locomotives will be made in Lawrence Park and shipped to India for assembly.
“I personally believe that is a great example of how globalization can work,” Simpson said.
He said GE’s investment in India signals a long relationship with the country.
“We don’t build factories in GE for 10 years. We build factories like this one in Erie for 100 years,” Simpson said.
Floodplain to company town
GE built the Lawrence Park factory in 1907. Lawrence Park was founded as a company town three years later.
GE makes locomotives for foreign markets — Pakistan, Angola, Kazakhstan, South America — at the Lawrence Park factory. Locomotives for North America roll out of GE’s factory near Fort Worth, Texas. Major railroads like BNSF Railway, CN, CSX and Amtrak use GE locomotives. Chances are good any train leaving Pittsburgh’s Amtrak station in Downtown is pulled by a GE locomotive.
The first locomotives for India will leave Lawrence Park in August after testing and arrive in India in October for more testing. GE hopes to deliver the first train to Indian Railways in the first few months of next year.
GE hopes to complete the Marhaura factory in Bihar and have it running at full production in the second half of 2018.
GE is building a 500,000-square-foot factory in Marhaura, a small town in Bihar, India, to build the bulk of the 1,000 locomotives the company will supply to Indian Railways.
The factory is being built on 200 acres that is prone to flooding and earthquakes. GE trucked in dirt for six months — sometimes as much as 700 trucks a day, Jain said — to raise 67 acres by nine feet. The company will pound concrete pylons into the ground to stabilize the site.
Jain expects the factory to employee about 400 people at its peak but it could create three to four times as many jobs in the community.
Jain said Bihar has the lowest GDP per capita in the country. It has the lowest literacy rates. Most people work in agriculture, textiles or mining. Access to electricity is spotty and few have lights in their homes. The schools aren’t great. Neither are the hospitals, Jain said.
“It’s a very, very underdeveloped state,” Jain said.
In addition to the factory, GE is building 100 homes for employees. The company is building a community center, shopping complex and primary health care facilities. GE is working to upgrade the schools in the area and provided townspeople with solar-powered lamps to light their homes at night, Jain said.
GE will also build two maintenance centers in India.
Aaron Aupperlee is a Tribune-Review staff writer. Reach him at [email protected], 412-336-8448 or via Twitter @tinynotebook.