KUALA LUMPUR - Malaysia Airlines (MAS) and General Electric Company of the United States (GE) have signed an agreement to form a joint venture that will establish a Center of Excellence in aircraft engine overhaul at the Malaysia Airlines Aero facility in Subang, Malaysia.
The agreement was signed today during the prestigious 3rd Annual Langkawi International Dialogue at Langkawi in the presence of Malaysia's Rt. Hon Prime Minister, Dato Seri Dr. Mahathir Mohamad, and several heads of state and senior government dignitaries from several countries. This agreement follows the parties' execution of a memorandum of understanding signed in September 1996.
The Aero Center of Excellence, the first of its kind in Southeast Asia, will service the engines of the MAS fleet and of GE's Asia/Pacific customers currently serviced in the United States and Europe. The JV's focus will be the overhaul and repair of CFM56 engines manufactured by CFM International, as well as other engine types in the MAS fleet. CFM International is a 50/50 joint company of GE in the United States and Snecma of France. To be called AERO 97 (Malaysia) Sdn. Bhd., GE will own 70 percent of the JV and MAS will own the remaining 30 percent.
"This SMART Partnership is mutually important to our two organizations," said Tan Sri Tajudin Ramli, chairman of MAS. "To GE, one of the world's largest, technology rich, leading blue chip companies, this partnership offers an excellent presence in the fast-growing Asia-Pacific region. GE will now be able to provide better regional customer support service and help reduce ownership cost of GE engines, which is vital to its growing customer base in the region. The benefits to our country, our company and our customer is also significant: Malaysia upgrades its current aerospace technological capability, accelerating our ability to develop indigenous technology while moving us towards becoming an aerospace hub.
"The company, MAS, benefits through upgraded fleet support and improved proficiency and productivity, and the employees benefit from advanced training in leading edge technology from a world-class company like GE."
GE plans to make the facility its Asian Center of Excellence for the overhaul and repair of CFM56 engines. "Through GE investment and by combining resources with MAS, we intend to make the Kuala Lumpur shop a world-class operation," said William J. Vareschi, President and Chief Executive officer of GE Engine Services, Inc., U.S.A.
MAS brings to the venture a state-of-the-art facility and a trained workforce. GE will contribute technology, overhaul and repair processes, management expertise and international marketing expertise. The joint venture is expected to finalize all required documentation and commence operations in early September 1997.
Initial plans are to provide excellent support for the overhaul and fleet management of MAS engines. However, the JV's main objective is to quickly combine the companies' strengths and be the best engine overhaul center to support MAS and GE's customers in the Asia Pacific region. This joint venture was highlighted as a demonstration of SMART Partnership in action by Tan Sri Tajudin Ramli, who is also Co-Chairman of the LID 1997.