New Company Targets Future Commercial Aircraft Programs,
Creates U.S. Jobs
GE Aviation and Aviation Industry Corporation of China (AVIC)
announced the signing of the agreement to form their new joint
venture company on Friday. Chinese Commerce Minister Chen Deming
and the U.S. Commerce Secretary Gary Locke witnessed the public
signing by David Joyce, president and CEO of GE Aviation and Zhang
Xinguo, vice president of AVIC today in Chicago.
The new AVIC and GE joint venture company will develop and
market integrated, open architecture avionics systems to the global
commercial aerospace industry for new aircraft platforms. This
system will be the central information system and backbone of the
airplane’s networks and electronics and will host the
airplane’s avionics, maintenance and utility functions. GE
and AVIC will continue to service their legacy programs and
existing contracts with customers. The agreement is subject to
government approvals and the issuance of an operating license.
This 50/50 joint venture represents a significant milestone in
the growing aerospace relationship between Chinese aviation
industry and GE Aviation since the mid-1980s. Chinese airlines now
operate more than 2,500 jet engines produced by GE and CFM
International (joint company of GE and Snecma), with an additional
1,000 engines on back order. GE Aviation's collaboration in China
also involves investment in a network of facilities for technical
training, manufacturing, spare parts distribution, and engine
maintenance and overhaul. Additionally, GE is powering
China’s new ARJ21 regional aircraft and CFMI was selected to
power the new Chinese C919 aircraft.
The new GE-AVIC joint venture extends the relationship beyond
engines into commercial avionics. It will enable GE and AVIC to
grow a business together that will create jobs globally, including
hundreds of new jobs in the US, the UK and China.
“The JV will build on the extensive avionics capabilities
of both companies and create a technology center of excellence to
serve the commercial aviation market," said David Joyce. "GE's
aviation business in China results in 1,800 high-technology jobs in
the U.S. The jobs are involved in producing and supporting jet
engines for China, as well as developing the new engine and
avionics system for the C919."
The joint venture company will be headquartered in China and
will be the single route-to-market for integrated avionics systems
for both GE and AVIC for new commercial aircraft. Also, GE and AVIC
will each provide avionics products to the joint venture company as
a customer and distributor. “The combination of AVIC and GE's
aviation experience, technical know-how and people skills will lead
to the development of highly competitive commercial avionics
products,” said Zhang Xinguo. “AVIC is looking forward
to a long and successful partnership.”
The name of the joint venture is GE-AVIC Civil Avionics
Systems Company Limited. The joint venture will have its Chairman
and General Manager nominated by AVIC and GE respectively with
final approval from its board of directors. The company will be
initially located at Zizhu Digital Hub Science Park in Shanghai
until a permanent location is secured.
“The joint venture will work to secure systems and other
avionics products on future aircraft adding to the overall economic
value and jobs created,” said Lorraine Bolsinger, president
and CEO of GE Aviation Systems. “The JV and C919 program will
support and maintain at least 300 high-tech jobs locally in each
the US and China. This venture will challenge our team to come up
with break-through technology. GE and AVIC will together develop a
world-class engineering organization and the JV itself will be
creating new IP and new technology. This is a 50/50 partnership;
you have to be all in and be very committed.”
The initial focus for the joint venture is integrated avionics
systems for the C919 aircraft. This selection was formalized in a
Letter of Intent with COMAC memorialized in a public signing on
July 12, 2010. COMAC anticipates delivering more than 2300 C919
aircraft over the 20-year life of the program. This market
potential provides an estimated value for the AVIC GE avionics
systems of approximately $2 billion.
Jeff Immelt, Chairman and CEO of GE and Lin Zuoming, president
of AVIC, originally signed the framework agreement on November 15,
2009 regarding the formation of the visionary joint venture and the
intention of jointly creating a market-leading integrated avionics
system supplier.