GE Sells Stake In Wabtec As Former GE Exec Named Wabtec CEO, Labor Concerns In Erie Persist
- Posted on November 19, 2019
- Stock Spinoff
- By admin admin
Months after the spinoff of its transportation unit and its subsequent merger with Wabtec(WAB), GE(GE) has sold 25.2 million shares of Wabtec stock in a public offering at $73.50 per share. The offering had originally been set at 12.5 million to 14.375 million shares but was quickly upsized, presumably due to robust interest. GE continues to own around 22.5 million shares or 11.8% of the company. The terms of the underwriting agreement lock up GE’s remaining shares until November 1, 2019. GE must sell its remaining shares within 3 years of the spinoff.
Following the release of first-quarter earnings, the first to include GE transportation, the company announced that Ray Betler would retire as President and CEO on July 1 and be replaced by Rafael Santana. Santana was previously President and CEO of GE Transportation.
We’ve mentioned Wabtec’s labour issues in the former GE plant in Erie before. Negotiations continue, but with fewer than 30 days left in the 90-day negotiating window, the union appears unwilling to budge. Likewise, Wabtec insists it needs to implement a two-tier wage system to keep the facility operating. Local leaders fear that a plant closure would cost the Erie area 5000 jobs and $400 million per year. Wabtec’s Betler points out that the company has never closed an acquired plant, but also that the company has over 80 manufacturing sites that represent “other options”. The current negotiating deadline of June 3 fast approaches and disruption here could be material to the company’s future results.
Disclosure: The author owns shares of GE and WAB
Investingport author and staff have NO position in GE stock and WAB.
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