Monday, September 28, 2015

GE Aviation's Durham-based jet engine factory gives update on jobs promise, preps new airplane engines

On the heels of a state-incentivized hiring binge, GE Aviation in Durham is undergoing costly manufacturing preparations for a yet-to-be released engine aimed at powering future 777s.

Spokesman Rick Kennedy says it's one of three next-generation engine products GE Aviation is about to start executing from Durham.

Already, the company produces engines in Durham that power the Boeing 777, the Boeing 787 Dreamliner and regional jets made by Bombardier and Embraer. Additionally, GE Aviation’s component of a partnership with CFM International – the core of the CFM56 engine that powers both the Boeing 737 and the Airbus A320 – is manufactured in Durham.

But preparations are under way to ramp up future products. Over the past two years, the company has spent more than $50 million in Durham to prepare to manufacture three new lines, specifically what’s called the “LEAP engine,” the “Passport” and a new engine core that could some day power your corporate trips.

LEAP engines are the next-generation replacement for the CFM56 engine, he explains. It will power the new Boeing 737 MAX and the Airbus A320neo aircraft, entering service in 2016.

“So, the production ramp-up for Durham for this engine will occur later this decade – at the same time the current CFM56 production will be phased out,” he says.

Additionally, the Passport engines will power future Bombardier business jets.

The facility is also preparing to manufacture a new engine core for the GP7200, which will one day power the Airbus A380.

Its headcount has expanded to support the new products. In 2013, GE announced a bullish plan to expand its GE Aviation workforce across the state. The plan involved 242 new jobs over five years. That included 50 new hires and new equipment for next-generation commercial engines at the firm’s Durham facility. Additional job expansions were announced for Wilmington, West Jefferson and Asheville in 2013.

In return for the jobs promise, the state pledged nearly $5 million in incentive grants to the division.

David Rhoades, spokesman for the N.C. Department of Commerce, says the state has yet to pay out any of its promised incentives, as GE Aviation’s first-year report has not been finalized.

Kennedy says GE Aviation has fulfilled its end of the bargain. Its current headcount is more than 350, he says. In 2013, the headcount given was 370, but that number included contractors. Kennedy says that, in actuality, the total in 2013 was closer to 300. And he does not expect the headcount to grow in Durham.

“350 is about where we want to be,” he says.

In the years following the announcement, it's been doubling down on engine development – but not just in the United States. Recently, the company announced it would be building a new turbo prop engine development center in Europe – a move that does not impact the Durham facility, as they're different engine products, says a company representative. Additionally, a gas engine facility is opening in Canada.

GE Aviation's Durham plant served as the backdrop for a Monday proclamation by Gov. Pat McCrory.

McCrory proclaimed that the week of Sept. 28 would officially be "State Manufacturing Week."

GE Aviation is one of more than 10,300 manufacturing facilities employing nearly 450,000 in the state. According to the governor's office, manufacturing remains the state's largest industry, at $88 billion or 20 percent of North Carolina's entire Gross Domestic Product.

For every $1 spent on manufacturing, $1.66 is generated for the state's economy, according to state officials Monday. 


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