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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