GE breaks ground on Canadian plant

Waukesha Engine facility to become "center of excellence for non-manufacturing positions"

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GE is moving ahead with plans to move its manufacturing operations to Canada and plans to make its Waukesha Engine facility a “center of excellence for non-manufacturing positions.”

GE Power engine in Waukesha
President Barack Obama spoke at GE Waukesha Gas Engines in 2014. The company is now shifting manufacturing operations to Canada.

Executives from GE joined with Canadian government officials Friday for the groundbreaking of a new $165 million, 450,000-square-foot facility in Welland, Ontario intended to replace the Waukesha facility.

The company announced plans last year to stop manufacturing gas engines at the Waukesha facility and lay off 350 employees. The plans called for a $265 million “brilliant factory” to be built in Canada, creating 350 manufacturing jobs in its first phase. The construction was expected to take 20 months.

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GE is still following the timeline it laid out when the move was announced, said Karla Nelson, a GE spokeswoman. Work will transition from Waukesha once the facility is complete in 2018.

The company said last year some 200 employees in engineering and other non-manufacturing positions would not be impacted by the move. At the time, GE said it was too soon to say if it would close the Waukesha facility. Nelson said Monday the Waukesha location will become a “center of excellence for non-manufacturing positions,” including engineering and supply chain work. She said exact plans for what will happen with the facility are still being developed.

In announcing the groundbreaking, GE said the Canadian facility would create 220 jobs. The company is putting $165 million towards the first phase of the facility and the province of Ontario is providing a $26.55 million conditional grant.

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The Ontario facility will initially manufacture GE Power’s reciprocating gas engines, components for compression, mechanical drive and power generation and components for GE transportation diesel engines. It is designed as a “brilliant factory,” with a goal of combing manufacturing expertise with data and analytics to streamline production and enhance efficiency.

The company said Welland’s proximity to the U.S. border, skilled labor and education facilities were important considerations in where to locate the facility.

“The City of Welland becomes an important link in our global integrated network and the new future that we have charted for GE with the convergence of industrial and digital. Canada has all the essential ingredients to succeed in this new digital industrial reality,” said John Rice, GE vice chairman, in a statement.

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When GE first announced plans to shift production out of Waukesha, the company said it was making the move because Congress hadn’t reauthorized the Export-Import Bank and Export Development Canada, the Canadian export credit agency, would be able to help finance transactions. While the Ex-Im Bank was reauthorized in December, the company declined to change course.

Rice’s statement from the groundbreaking highlighted Canada as a “key partner” for the company.

“The flexibility of the Economic Development Corporation (EDC) and other export credit agencies, combined with GE’s global manufacturing capabilities allows us to replace EXIM financing and compete effectively for global tenders,” he said.

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