GE workers bearing down to build a growth engine

"I know the value of a GE job, having grown up in a GE household," Immelt said in an interview during his first visit to the Lynn jet engine plant. "Nobody has to explain that to me. It paid for my college education . . . I get it."

But as head of a $183 billion global corporation, Immelt has also set a high bar for the River Works, whose 3,700 employees churn out engines for military fighter jets and helicopters and small commercial aircraft. "What I always tell [people], whether they're an hourly worker or an engineer: 'You've got to want to compete,' " said Immelt, a former football player at Dartmouth. "The workforce here has to prove that it can go toe-to-toe with any site, both in the country and globally."

Management and union leaders in Lynn said they're ready.

"This is a new era for Lynn," said Maria Dea con, the plant manager since January. "We have our challenges. . . . But this is a great business."

And GE workers who have switched gears in recent years, agreeing to learn new manufacturing methods, have little left to prove, a top union leader said.

"We told [Immelt]: 'Look we really believe we make the best aircraft engines in the world,' " said Jeff Crosby, president of IUE Local 201, the plant's largest labor union. " 'We want to keep doing that.' "

GE, which makes everything from light bulbs to locomotives, has been battered by the recession. Losses at GE Capital, its finance unit, have shaken investor confidence. In the last month, GE has had two downgrades by Wall Street credit rating firms, and its stock continues to trade at historic lows.

Immelt vows to ride out the economic storm.

"We're a battleship right in the middle. . . . And we're going to get hit by some of the waves when the economy gets choppy. So, you've got to have a steady hand. You've got to play long-term."

The River Works is GE's largest manufacturing plant in Massachusetts. Other GE businesses locally include sensing and technology in Billerica, medical devices in Lawrence, energy services in Medford, and security in Wilmington. Collectively, the sites have thousands of employees and retirees, whose fortunes are tied to GE's overall performance.

In Lynn, the outlook appears favorable. Demand for commercial engines is expected to be down through next year, Immelt said. But engine orders for military aircraft, including fighter jets and helicopters, are expected to grow, he said.

"As long as the military is engaged, there is a replacement market," Immelt said. "What happens, even during peacetime, is that the military will retool. This facility, from the military standpoint, is in very good shape."

But the River Works is hardly safe from the financial downturn. About 100 nonunion employees took early retirement last week, part of a companywide effort to cut costs. And funding for the Joint Strike Fighter - the next generation combat plane - is uncertain. GE is vying to be an engine supplier, but funding for the contract is often left out of the Pentagon budget. GE must turn to Congress to have the budget include funds for the program, which is not expected to hit production until 2012.

"We're in the middle of another [federal] budget cycle, and so we should find out relatively soon," Immelt said. "That [contract] has a big impact on this facility, and it has a big impact on jobs and technology. So there are very few things more important to me, personally, than the outcome of the JSF."

Deacon, the plant manager, believes Lynn can fight for any contract, against any competitor.

"This is a special facility," she said, walking through the factory. "We do everything, from design, manufacture, assemble, test, and service. You have the whole spectrum. . . . Not every plant does that."

Deacon, 38, formerly led a nonunion engine assembly plant in Durham, N.C. She is top-ranked in Six Sigma, a quality standard used across GE businesses. In Lynn, she replaced the late Corinne Johnson, who died of cancer in March 2008. Deacon is only the second woman to lead the century-old River Works. "This is clearly an older plant," she said, glancing at the red-brick factory buildings. "But it is also a place of innovation that has evolved."

A native of Wales, Deacon is a mother of two girls, ages 6 and 9. She's the daughter of a union power worker, which has given her a unique perspective on union relations. "We have healthy and respectful discussions," said Deacon, who meets with union leaders once a week.

Crosby said the open-door policy is helpful. "We negotiate to solve problems, not to make them," said Crosby, the union president for 17 years.

Union-management ties weren't always so strong. In the 1980s and 1990s, Local 201 three times rejected national contracts. Some members still remember a 1969 strike that shut down the plant. The plant's reputation was widespread. "When I was a young guy growing up in GE, even though I never worked in aviation, when you said the word 'Lynn,' people went 'ohhhh,' " said Immelt, 53, who started his career in GE Plastics. "It was always viewed as a very tough place to work."

Along the way, the plant declined, with buildings mothballed and business lines moved. Change came in the early '90s, however. Crosby and other new union leaders helped to reshape production methods, negotiating multiskilling agreements and adopting Six Sigma and other quality measures. And those strides have made it to the top.

"There's been a breakthrough here, in the last five to 10 years, of people working shoulder to shoulder," said Immelt. "What you have today here is a good workforce, a good union."

And so would he consider new investment in Lynn? "Ten years ago, we would have said . . . 'Get out of here,' " Immelt said. "I think today, you'd say, 'Hey this is a good workforce. Let's look at it.' "

Kathy McCabe can be reached at kmccabe@globe.com.