GE Aircraft Engines' Dave Calhoun has the essence of the company flowing through his veins as he has been with the organisation – in a wide variety of roles – since graduating in 1979. He took over as president and CEO in December 2000 and so has presided over one of the most turbulent 18 month periods in the company's long and illustrious history. Just before Farnborough, Calhoun discussed present performance and future plans with Flight Daily News' Geoff Thomas.
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Q: Has the focus of GE changed, post the cyclical downturn in world aerospace and after 11 September?
A: Well, we're now one year into what we expect to be a three-year hiatus and things are already starting to look better than I anticipated three months ago.
Between now and 04 or 05 I expect that we'll see relatively limited two or three percent increases – year-on-year – before we see something like a full recovery mid-decade.
Actually, I don't believe that what we're seeing is related to 9/11. It has much more to do with a global economic recession and it's a cyclical thing that we'll get out of.
GE isn't afraid to spend money on development and it's this attitude that will see us through the problems.
Q: What hard decisions have you had to make?
A: With an overall reduction in revenue of seven to eight percent, we've had to lose some jobs – around 15% – but I still hope to turn in some profits.
Fortunately our military business is increasing by up to a fifth and I hope that this will continue for at least a couple of years although that depends on precisely how much is found in the US Government's coffers.
Assuming that the current global situation means that some extra money will be found, I expect to see a double digit increase in this area of the business over the next three to five years, partly because of the war against terrorism.
The average age of the US air force's tactical fleet is increasing and we're doing well out of both new equipment and upgrades.
Q: Has the current situation meant a change of focus?
A: Not really, although we are increasing our emphasis on two markets in particular. These are RJs and the long range versions of the B-777.
The CF34-8 Growth engine (capable of producing maximum takeoff thrust of 14,510lbs) – used for example on the Embraer 170/175 – is going to be a real winner for us, while at the other end of the scale, the GE90-115B (for the B-777-300ER) is right on schedule for FAR 33-type certification, rated at 115,000 lbs of thrust.
Right now it's on the test stand and is producing more than 122,965lbs of thrust, making it the world's most powerful jet engine. This engine will be tested on GE's B-747 flying testbed before joint FAA/JAA certification later this year.
We're also continuing to focus on the Engine Alliance and its increasingly successful GP7000 engine for the Airbus A380. Our relationship with P&W is fantastic and we're working really well together.
The focus is now very much on sales and marketing and this is proving to be successful. (At the time of writing, Calhoun wasn't expecting the FedEx order for its 10 -380F freighters to be decided before/during Farnborough, but an announcement was made on Tuesday at the show that the Alliance had signed a contract for the engines and also a 20-year fleet management agreement).
Q: Other than the -777, what's happening at Boeing?
A: Currently, Boeing is in a listening mode talking to its potential customers and they're definitely pressing on Sonic Cruiser. Nothing's yet cast in tablets of stone – but I'm convinced that it'll be a flyer!
We're also working with Seattle on the launch of the B-747XQLR – and I believe that we'll have a decision from them prior to mid-August.
Q: You have a considerable interest in CFM. How are they doing, from your perspective as a parent'?
A: In some ways, CFM has borne the brunt of the downturn – but the company still has great legs! There are 2,000-plus potential upgrades for the B-737-300/-400/-500, especially in Asia which is where we all believe that the upturn will first start to show. This will certainly help them to get through the liquidity pinch' they're currently experiencing.
Q: And finally?
A: This year and 03 are going to be difficult and challenging… and then we'll have some big business decisions to make about how we gear up for a fully-recovered marketplace.
Source: Flight Daily News
