The rise and fall of GE's empire

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The General Electric Co. is known around the world as a large, multifaceted international corporation that employs thousands of people in hundreds of fields.

But in Pittsfield, the company is known simply as "the GE."

From its beginnings in the city at the turn of the 20th century, through its heyday from the 1940s through the 1970s -- even during the downsizing that began in 1986 -- the GE was an integral part of life in Pittsfield.

General Electric stopped being a major presence in the city in 2007 when it sold its plastics division to Saudi Basic Industries Corp. (Sabic), but GE still has 30 employees in Pittsfield, involved mostly in environmental remediation efforts and facilities management because the company still owns 220 acres of land and several buildings.

That land includes the company's former polymer processing development center on East Street; GE leases the facility to Sabic.

Although GE's legacy in Pittsfield has been tarnished by the PCB contamination left behind by its power transformer division, which closed in 1990, the company for years was the city's largest employer, providing paychecks for two and three generations of some Pittsfield families.

GE also formed community organizations such as the General Electric Athletic Association -- a golf course bearing that name is on Crane Avenue -- and sponsored theatrical productions at the original Colonial Theatre.

GE's first employee credit union, founded behind a single desk in 1935, became the Greylock Federal Credit Union, now one of the county's largest financial institutions.

Pittsfield's popular Third Thursday events are modeled after the Thursday nights when just-paid GE employees would flock to North Street to shop.

"GE and the community always had a very good relationship," said former GE chairman John E. "Jack" Welch, who spent 18 years in Pittsfield (1960 to 1977). "We all liked being out there. We liked the environment of the Berkshires. We supported the city's charities."

Welch, now 75, became GE's chairman in 1981; five years later he closed Pittsfield's power transformer plant, a decision that stunned the city.

"A black day in November," said Pittsfield resident Tom Blalock, a former GE engineer and the author of "Transformers at Pittsfield," a history of GE's power transformer plant.

At the time of the announcement, Welch told The Eagle the decision was painful but "long overdue."

Asked to comment on those statements in a recent telephone interview, Welch took full responsibility for closing the plant.

"The buck stops with me," he said.

Welch said "foreign competition" ate into GE's share of the power transformer business. He also said the Pittsfield plant was being carried by the rest of the company because it had been losing money for "20 or 30 years." Welch said GE kept the division open longer than it should have because of the plant's longstanding ties to the community.

"It was the last thing I wanted to do," he said. "Pittsfield was great to me. I loved Pittsfield and the environment of the Berkshires. I had plenty of friends there.

"It really should been closed on my first day on the job," Welch said, referring to when he took over as GE's chairman.

That prospect would have seemed unthinkable at the beginning of the 20th century.

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General Electric's involvement in the city began in 1903, when it purchased the Stanley Electric Manufacturing Co., which had been established in Pittsfield in 1890.

Founder William Stanley, who left the company before it was sold to GE, was the first person to demonstrate the use of the transformer in an alternating-current system when he provided electric lights for the town of Great Barrington in 1886.

"My understanding is that he was so successful building the Stanley Electric Manufacturing Company that when the company continued to grow, he needed different capital to keep it expanding," Blalock said.

In 1907, the company became known as the Pittsfield Works of GE. That's when people first started referring to the plant as "the GE," Blalock said.

In 1909, GE began laboratory work on plastics at its Pittsfield plant in the Morningside neighborhood. Researchers began to experiment with artificial resins to use in molded materials in 1912.

By the late 1920s, the Pittsfield plant was manufacturing half of the country's supply of plastic phenolic-molded bases for vacuum radio tubes. GE Plastics was given "department status" within the company in 1931, and was made a division in 1973.

GE's plastics industry in Pittsfield took off in 1955 when Daniel W. Fox invented Lexan, the first engineered plastic, which was strong and durable enough to replace metal. It became the core of GE's plastics business, which peaked in Pittsfield in 1988, when the division neared $5 billion in revenues, capping three straight years of record profits.

The transformer division's growth occurred during the 1930s. Blalock said the federal government's decision to expand electric power systems to rural areas of the country that decade led to an increase in the manufacturing of power transformers.

In 1943, the number of employees at GE's Pittsfield facilities peaked at 13,645.

"The use of electric power slowly grew during the first part of the 20th century," Blalock said. "And this plant grew with it."

Alfred L. Shogry, former president of the Central Berkshire Labor Council, worked for GE from 1951 to 1992. He graduated from Pittsfield High School in 1949 and said that 35 percent of his classmates ended up working for the company.

"People couldn't wait to get in there," Shogry said. "The money was great. The benefits were great. It meant a lot to everybody."

But the relationship between management and labor wasn't always harmonious.

In the early 1960s, five former GE executives were convicted of colluding with other companies to set a minimum price for power transformers.

The first labor-union strike in Pittsfield took place in 1916, when workers tried to organize and management refused to meet with them. After GE employees received collective bargaining rights in 1940, either strikes or walkouts took place in 1946, 1953, 1966, 1969, 1985 and 1987.

"We had some real tough negotiations then," said Shogry, who served as a union steward during the 1950s and 1960s. "They played hardball. It was just the times. The managers weren't like that during my last 15 years. We all saw that the old days weren't the right way to go. ... It was the 1980s when things started to change."

In the long run, they didn't change for the better.

Two years after GE's power transformer plant closed for good in 1990, the company downsized further when it sold its aerospace division to the Martin Marietta Corp., now known as Lockheed Martin. That left the plastics division as GE's only Pittsfield business with just 530 employees. Fifteen years later, what remained of GE Plastics was sold to Sabic.

The downsizing left a wound that never really healed.

"We were totally devastated," Shogry said. "It really hurt."


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