General Electric hasn’t been innovating and making money since the 1890s by sitting on its hands.
The multinational conglomerate that traces its roots to Thomas Edison is constantly bobbing and weaving as economic conditions change.
Last week, for instance, it continued to dismantle its once-mighty GE Capital lending empire by unloading a piece of that business for $12 billion. At the urging of shareholders, GE is expected to exit the increasingly regulated and volatile financial industry within two years to refocus on hard-line products, from aircraft engines to medical scanners to energy-making equipment.
As a report in USA Today put it, the shift “unwinds one of the legacies of former CEO Jack Welch, who had bet on business diversification as a growth catalyst.”
The circumstances were slightly different, but GE found itself in a similar situation 30 years ago in South Carolina, when the company mothballed a plant on U.S. Highway 78. Welch, nicknamed “Neutron Jack” in the 1980s for his willingness to fire underperforming managers and shed also-ran businesses, was in the corner office at the time.
Largely forgotten now, the Ladson factory’s final year, starting in June 1984, turned out to be a condensed, scaled-down version of the local Navy base shutdown that would rock the Charleston economy less than a decade later. The comparison stems from the recent sale of the big plant that GE built in a soybean field in the late 1960s to make large steam turbine generators for the nuclear power industry.
The company said in a brief 1974 history of its $40 million Charleston County investment that one of its goals was “to contribute to meeting the difficult demands of the energy crisis.”
Nuked
GE quickly became a major local employer that likely competed for skilled labor with the much larger Navy base and shipyard on the Cooper River in North Charleston. At its peak, the company had about 1,200 workers on its Highway 78 payroll in 1970s.
Within a decade, and for various reasons, the nuclear power boom was all but over. GE said its decision to pull out of Ladson came three years after it booked its last domestic order for one of the locally made turbines.
“In a nutshell, that’s it,” a spokesman said after the announcement.
The decision triggered an outcry, partly because some of the workers were represented by a union. Employees pleaded with GE to consider other uses for the factory. The company rebuffed the recommendations.
The planned closing even prompted a visit from the Rev. Jesse Jackson, who met with workers and led a protest march along Highway 78 in September 1984. He called for unity in stopping “economic erosion.”
“There must be plans put in place to save workers’ jobs when a plant is in transition,” Jackson said, according to a newspaper report about the rally.
The Catholic Diocese of Charleston also got involved. It organized a community forum with the United Electrical, Radio and Machine Workers of America. Also, the diocese, along with dozens of pastors and priests from other local churches, challenged the company in a newspaper advertisement called “On Aiding the GE Workers.” The clergymen called out the company’s decisionmakers to share the reasons they had rejected alternative uses for the factory.
GE’s response was blunt: “The ad can’t change the business situation here,” a local spokesman said.
In the end, the uproar didn’t stop GE from closing the plant on schedule, 30 years ago this month. The region would go through the motions again — but on a much larger scale — after the Navy base was targeted for shutdown in 1993.
New owners
The GE plant eventually got a second shot at life. An offshoot of The InterTech Group of North Charleston bought it in 1988 and set up a metal fabrication business at the site. Other firms came and went.
The most recent anchor tenant was Force Protection, the armored military vehiclema-ker that once had more than 1,000 workers in Ladson. General Dynamics bought the business in late 2011. Last year, echoing GE’s reasoning in 1984, the defense giant said it was halting local production as demand plummeted for the blast-proof troop carriers.
Now, a new group of investors sense an opportunity to get the factory floors buzzing again. Two companies affiliated with the real estate firm J.L. Woode Ltd. recently paid InterTech $22 million for the 250-acre property.
“I think we bought well below replacement value,” said J. Luzuriaga, president of J.L. Woode, which has offices in Charleston and Chicago,
The new owners aren’t expecting another General Electric or Force Protection to come along and lease the entire site.
“Those days are over,” said Luzuriaga, who, coincidentally, happened to cut his teeth in business at GE Capital.
Contact John McDermott at 937-5572.
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