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  • In GE's expansion, a second chance
    Posted by Michael Mecham 6:25 PM on Feb 26, 2012

    When GE Aviation spearheaded its drive to qualify the F136 as a second powerplant choice for the F-35 Joint Strike Fighter, it naturally emphasized the project’s jobs potential. Southern state political leaders, eager for new, well-paying manufacturing jobs, offered incentives to win a share of the Defense Department’s biggest procurement program.

    In the end, GE Aviation and its partner, Rolls-Royce, lost their JSF bid; Pratt & Whitney’s F135 retained its role as the fighter’s sole powerplant.

    When GE Aviation’s composites factory in Batesville opened in 2008, it was the company’s first foray into Mississippi and drew appreciative words from politicians, including Republican Sen. Thad Cochran.Credit: GE AVIATION

    But that does not end the JSF engine story for GE. In a bit of serendipity, it has been able to fold its F136 plans into a much larger effort to expand its manufacturing and research capacity that has been underway since the mid-2000s. The company is making these investments, which capitalize on state government incentives, to keep pace with a growing backlog that is mostly driven by GE’s commanding leadership as an engine provider for Boeing’s widebody programs and its share, as a partner with Snecma in CFM International, of three-fourths of all engine sales for narrowbody jets.

    Here are some numbers behind that story. In 2004, the company’s total output was 2,380 engines, including its share of CFM56s. The next year, Airbus and Boeing experienced an order rebound from the post-9/11 sales slump. By 2007 GE was reorganizing its major centers in Evendale and Peebles, Ohio, and Durham, N.C., to prepare for the coming boom. Total production rates hit 3,000 engines in 2011. They will rise to 3,400 this year and should hit 3,800 in 2013. By itself, CFM expects deliveries to increase to 1,800 in 2018 from 2012’s 1,460.

    GE Aviation President and CEO David Joyce may be forgiven for the metaphor that he, a gas turbine maker, uses to describe this historic upward trend in deliveries. “We are firing on all cylinders,” he says.

    In the American South, governors, state legislators, local leaders and universities are eager to talk about how they can provide teaming opportunities—tax incentives, research partnerships and training initiatives—for companies like GE. For its part, GE says that as of the end of 2012, it will spend $580 million on facility expansion and plant upgrades across its 55 U.S. operations.

    Jobs come with new factories. GE employs 25,000 domestically, 1,000 more than in 2010. Here’s some perspective on that number: The headquarters factory in Evendale hired 30 mechanics in 2007 to help it keep pace with the commercial jet boom. They were the plant’s first new mechanics in 21 years.

    The current expansion includes construction on three new sites and illustrates GE’s use of company-state partnerships. In Ellisville, Miss., population 3,500, GE is working on a 300,000-sq.-ft. factory for composite components that should employ 250 by 2016. The University of Southern Mississippi will be a pipeline for engineers. GE also will benefit from university research on composite platforms, the structures that fit between fan blades.

    GE’s initial foray into Mississippi was in 2008 when it opened a factory in Batesville, population 7,000. A company official recalls “about half the town” coming to the ground-breaking ceremony. Asked why she was there, a Girl Scout leader replied, “Because this is a big deal for Batesville.” Indeed. The factory helped set GE’s metrics for advanced composite fan-blade production. As for the town, the initial projection of 200 jobs is expected to reach 400 in a year.

    Auburn, Ala., was where GE planned its most direct investment for the F136. When that project died, the company realized that instead of coating parts for the military engine it could machine parts for CF34, GE90 and GEnx commercial jets. Hiring for the 300,000-sq.-ft. factory is expected to begin next year and account for 300-400 jobs by mid-decade.

    All of this attention elsewhere has not been lost on GE Aviation’s home state. Three years ago, then-Gov. Ted Strickland talked to Joyce about how GE might benefit Ohio. Besides a $100 million renovation that GE is making in Evendale, the University of Dayton is building a 120,000-sq.-ft. electric-power research center where the company will collaborate on computer modeling, simulation and analysis.

    The responses of these states are being replicated across the country and come in many forms, from Washington’s mentoring program for small suppliers to Oklahoma’s push as a premier overhaul center to North and South Carolina’s drive in airframe production. The Aerospace Industries Association fears that 350,000 defense jobs will be lost in the next 10 years; states are eager to do what they can to soften that blow.

    Tags: AWCOL

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