Farnborough 98
September 9, 1998 9/10 9/9 9/8 9/7
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Newsmakers
On the Record with
JIM McNERNEY, PRESIDENT AND CEO, GE AIRCRAFT ENGINES

Engine Leader Vows to Maintain its Position

"It's an all-fronts war everywhere" against rivals Pratt & Whitney and Rolls-Royce, one in which GE Aircraft Engines president and CEO Jim McNerney declares he will give no quarter as he pushes his business toward revenues of $10 billion this year.

Despite overwhelming or significant market leads with some engines, McNerney says there is no room for complacency. "We're at Farnborough to keep reminding people of our commitment to them," he told Show News.

While subsidiary GE Engine Services will provide fully half of GEAE's revenues this year-and perhaps 60% in the next two to three years-McNerney says the engine company cannot relax. It has identified five distinct products of particular importance for continued growth:

  • CFM56, the world's best-selling engine that dominates the market for narrowbody airliners, winning 100% of all new orders for Boeing 737s and 65% of the single-aisle Airbus family. "We're here to talk about the new technology we're developing for the future, of our determination to keep our lead in this market." The CFM56 is made by CFM International, a joint company of General Electric and Snecma of France. It powers more than 2,700 airliners.

  • CF6. Having snared 48% of the cumulative share for widebody airliners, GE is looking at further development of the CF6-initially for growth versions of the Boeing 747. "Programs are in place to retain widebody leadership," McNerney said. More than 5,200 CF6s are in airline service.

  • GE90. "Despite earlier protestations to the contrary, we are prepared to grow this engine," said McNerney. "As Boeing better articulates what it wants to do with a bigger 777, you will see a bigger GE90. There is no question that right now we are paused at the lower 90,000 pounds of thrust, but my view is that the market for 105,000 to 110,000 pounds will be there. Personally, I'm optimistic the GE90 can reach that more easily, reliably and cheaply than its major competitors." The number of GE90s in service will double this year to around 60 aircraft.

  • CF34. This engine is poised for a major share of the world's regional jet airliner market, having been chosen to power Fairchild Dornier's new family of 55 to 90 passenger aircraft as well as Bombardier Aerospace's 70-passenger Canadair Regional Jet Series 700. The CF34 already powers the 50-passenger Canadair Regional Jet, of which 245 are in airline service out of a total of 376 firm orders. GE forecasts that as many as 1,700 new 60- to 90-passenger aircraft could be sold in the next 20 years.

  • GP7000. This engine is being developed by the Alliance, a teaming by GE with arch-rival Pratt & Whitney to offer a 67,000- to 80,000-pounds-thrust engine for the Airbus A3XX and growth Boeing 747. Some 800 such four-engined aircraft could well be needed by 2025. "We have never been more committed to this program than now," McNerney stressed.

"These five programs represent a significant amount of growth in this business," said McNerney. Meanwhile, engine services continues to grow in high double digits in both margin and sales.
A major part of GEAE's success story is its Six Sigma drive to improve quality and value to its customers while wringing costs out of its business. Investment of $28 million in Six Sigma produced benefits of $36 million last year, while a $55 million investment should reap $115 million in benefits this year. "It really is win/win," said McNerney. "The savings are exciting, and customers are seeing the benefits."

John Morris


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