GE Aviation: Avionics Joint Venture (JV) with Aviation Industry Corporation of China (AVIC)

October 05, 2011

GE is working to establish a commercial joint venture (announced in November 2009) with the Aviation Industry Corporation of China (AVIC) because it will provide global commercial opportunities in China and the rest of the world that GE would not have on its own. Specifically, GE will contribute its commercial Integrated Modular Avionics (IMA) technology to the joint venture. The JV's first order is for the COMAC C919, a new narrow-body commercial aircraft being built in China. The JV will supply IMA technology, displays, onboard maintenance systems, flight recorders and flight management system for the C919.

Listen to an introduction to the JV by Lorraine Bolsinger, president and CEO of GE Aviation Systems.

Find out how GE's joint venture with AVIC is contributing to jobs in the United States, and what we've done to safeguard the security of our nation and ensure the protection of our intellectual property.

JOBS

The JV is creating at least 300 high-tech jobs in the U.S., mostly in Grand Rapids and Clearwater.

  • GE's overall business in China - across all divisions - will support nearly 4,500 American jobs, including those along GE's U.S. supply chain.

  • In the last 10 years, revenue from outside of the U.S. has grown to be 60 percent of GE's business. Because of this international growth, GE has been able to keep more than half of its industrial workforce in the U.S.
  • If we don't compete for business in China, foreign companies will, which has the potential to sacrifice U.S. jobs and diminish America's role as a world leader in technology. In fact, companies such as Switzerland's Liebherr Aerospace and France's Airbus have already formed partnerships with Chinese companies
  • Increased revenue from the JV will create income that allows GE to reinvest in developing new technologies in the U.S.
  • GE Aviation employs more than 26,000 American workers and supports more than 11,000 domestic suppliers - 1,800 of which are thanks to GE's aviation business in China. These are high-paying jobs that are part of the core of America's technology base, in communities that need them most.
  • Business overseas fuels business at home: If we sell more overseas, we'll buy more at home. At GE Aviation that means...
  • - Exports will account for 52 percent ($9 billion) of our 2011 revenues.

    -This helped us add nearly 1,000 domestic jobs since fiscal year 2010. We plan to grow an additional 450 in the next three years.

    -63 percent ($5.7 billion) of our annual spend with suppliers is in the U.S., translating to 35,000 domestic supplier jobs.

    NATIONAL SECURITY

    No military applications are involved in this joint venture, and significant measures are in place to safeguard against any unauthorized transfer of intellectual property.

  • The scope of this joint venture is limited to commercial aviation use only; the joint venture is prohibited from supporting a military application, and is subject to independent third-party audits and oversight.
  • Both GE and AVIC are contributing unique elements to the partnership, leading to new technology and intellectual property. GE is transferring to the JV its commercial Integrated Modular Avionics (IMA) technology, which has no immediate application for military aircraft. No existing synthetic vision avionic technology will be transferred to the JV.
  • No direct U.S. government funding was received for development of the IMA technology. The IMA was developed as a commercial product and therefore was not funded by Department of Defense or military money.
  • We have been thorough, proactive and transparent in consulting and briefing Congress and all relevant U.S. government agencies throughout the process, including the Departments of Commerce and Defense.
  • On the C919, the GE-AVIC Civil JV has won content for IMA, displays, onboard maintenance systems (OMS), flight recorders and flight management system (FMS). In addition to supplying the IMA, GE will be providing the flight recorders and FMS. The JV will buy most of the displays and OMS content from the parent companies and third-party suppliers.
  • INTELLECTUAL PROPERTY

    Intellectual property is the most valuable thing we have and we rigorously protect it at GE.

  • GE has consulted with leading experts in global trade and commerce to ensure full government compliance and the highest level of security with regards to intellectual property. GE has continued to consult with all relevant U.S. government agencies during this process.
  • The competitive nature of the aviation and aerospace industry is such that it makes good commercial sense to vigilantly protect proprietary, domestic IP. If GE's IP is stolen, the company no longer profits.
  • We have spent three years fashioning a robust set of protection measures, which include some of the most rigorous legal commitments available, to ensure that both GE's and AVIC's contributions and efforts are protected. These include:
  • - Rigorous intellectual property protections,

    - Oversight compliance and IP mechanisms,

    - Significant remedies in the event of a breach of compliance, and

    - Non-competition obligations.

  • China is the world's fastest growing major market, and other U.S. aerospace companies, including Honeywell and Rockwell Collins, have also formed JVs with Chinese aerospace companies. We cannot afford to be afraid of China.
  • GE Aviation has a number of successful joint ventures elsewhere in the world; the joint venture with AVIC is the fourth. That means GE Aviation is experienced at establishing compliance plans to protect its technology - whether it is China, Canada or with partners here in the U.S.
  • GE works diligently to comply with all rules and regulations with regard to aviation, and also to make sure American workers and companies are able to compete in foreign markets. This JV with AVIC is no exception.