March 20, 2018 / 8:34 PM / a year ago

UPDATE 1-General Electric announces 225 orders for refurbished locomotives

(Adds background on GE divestment plans, request for GE comment, paragraphs 4-5)

March 20 (Reuters) - General Electric Co’s transportation unit said on Tuesday several North American railroads have placed orders this year for 225 refurbished locomotives, although it declined to say which railroads ordered the equipment.

GE also said in a statement that it will deliver 80 modernized locomotives previously ordered by Canadian Pacific railway Co and 100 to Norfolk Southern Corp in 2018.

The orders were the latest evidence of major railroads seeking to control costs by refurbishing aging machinery instead of purchasing new engines.

General Electric Chief Executive Officer John Flannery said in November that GE would exit at least $20 billion in operations to improve its financial performance. The company is exploring options for the transportation unit; its iconic lighting division, which makes bulbs for consumers; and its healthcare information technology business.

A GE spokesman did not immediately reply to an emailed request for comment on what Tuesday’s announcement might mean for those plans.

GE will make varying upgrades to aging locomotives - some more than 20 years old - such as improvements to control systems or electrical circuitry. The changes boost hauling capacity but are cheaper than buying new, it said.

“Modernizations will most likely be a strong portion of our locomotive capital spending for a number of years,” Doug Corbin, an assistant vice president at Norfolk Southern, said in a statement accompanying GE’s announcement. (Reporting by Eric M. Johnson; Editing by Dan Grebler)

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