With China experiencing one of the largest rural to urban migrations in history, a number of aviation, energy and rail agreements have been signed between GE and China over the last 14 months. During Chinese President Hu Jintao’s visit to Washington this week, updates will be announced on the deals, which are designed to help one of the world’s fastest growing markets meet its infrastructure challenges in sustainable ways — and to create and support U.S. jobs, provide unprecedented access to Chinese technologies and markets, and generate a new wave of growth for GE.
In terms of jobs, the deals will support nearly 4,500 in the U.S., including those along GE’s U.S. supply chain. The lynchpin of the latest aviation partnership is the formation of an avionics joint venture between GE Aviation and China’s AVIC, first announced in November 2009, which marks a significant milestone in the growing aerospace relationship between Chinese industry and GE Aviation since the mid-1980s. There are already about 150 GE employees working at our Grand Rapids, Michigan engineering facility to help develop the central avionics nervous system that will power China’s new C919 narrow body commercial jetliner, of which more than 2,300 are expected to be made during the 20-year lifetime of the program. (Meet some of the engineers on the Michigan project in a GE Reports video.) The partnership will support and maintain at least 300 high-tech jobs locally in each country.
In energy, efforts center on helping China’s tackle its growing need for power, which is expected to double in the next 10 years. The energy deals, by expanding U.S. exports, create or support thousands of U.S. jobs. As Bloomberg News notes in its story this morning, one involves the potential sale of 500 gas turbines — derived from GE Aviation jet engines — that will allow China to use local sources of gas in the most efficient way across dozens of decentralized locations. That agreement will create or support 2,100 jobs in the U.S. economy as GE uses a wide range of U.S. subcontractors for equipment from companies in Ohio, Colorado, Texas, Oregon. The turbine deal with Huadian Engineering Group represents a $350 million export opportunity for GE.
At the same time, GE and Shenhua are forming a coal gasification joint venture to sell and develop gasification technology and advance the deployment of “cleaner coal” solutions in China. This new company would combine GE’s expertise in industrial gasification technologies with Shenhua’s expertise in building and operating coal gasification facilities. The collaboration will support hundreds of engineering, services and R&D jobs in GE’s gasification headquarters in Houston, in Greenville, South Carolina and at the GE’s Global Research Center in Niskayuna, New York. The new research agreements have been forged amidst a backdrop of a growing GE R&D presence in China that is tapping into the country’s homegrown scientific talent via GE’s Global Research Center located in Shanghai and new regional lab sites announced in November.
In the rail partnership, GE and China’s Ministry of Railways are already working together to develop high-speed passenger rail technology for the U.S. market — and to find ways to help China upgrade its rail system with GE locomotive and railway signaling technologies. The passenger rail cooperation agreement alone is an investment that could sustain or create approximately 250 jobs in the U.S. by 2012 in the first phase of the agreement. GE Transportation CEO Lorenzo Simonelli told Bloomberg that GE will also be signing deals that “may bring in $1.4 billion and add or preserve 2,000 U.S. jobs, including an order for 500 exported locomotive kits and related services valued at $350 million.”
As GE Chairman and CEO Jeff Immelt underscored when many of the collaborations were first announced, “new global sales will be a direct result of these collaborations, safeguarding and growing U.S. jobs.” In its story, Bloomberg notes that GE’s China sales are rising at about 20 percent annually and should grow in the “high double-digits” in 2011.
* Read a Q&A about the avionics deal
* Read a fact sheet about GE’s China deals
* Read about GE’s advanced coal technologies
* Learn more about the high-speed rail goals
* Read the “ABCs of IGCC Technology” on GE Reports
* Read more China stories on GE Reports