GE (NYSE: GE) and its Chinese partners that represent some of that country’s key infrastructure development goals announced the signing of a series of “Country to Company” agreements aimed at promoting collaboration between GE and Chinese public and private sector aviation, energy and transportation organizations. The announcements, which were made as part of "GE's Clean Technology Week in China" activities, included the formation of two joint ventures – in avionics and locomotive engines; and the parties’ agreements to explore future “cleaner coal” gasification and high-speed rail opportunities.
The agreements encourage active collaboration to advance clean technologies that address both long-term strategic challenges and economic opportunities for GE and China. Over time, these initiatives are expected to create and safeguard thousands of jobs in both countries.
Jeff Immelt, Chairman and CEO of GE said, “These agreements share common themes – rapid growth potential, clean technologies and job creation. Whether expanding our existing aviation, energy and transportation relationships or looking at technology collaborations to open up new growth opportunities, partnerships like these help protect and grow employment for both GE and China’s infrastructure sectors.
“We expect these investments and commitments to yield long-term benefits,” Immelt said. “New global sales will be a direct result of these collaborations – safeguarding and growing U.S. jobs while supporting Chinese growth for GE businesses and the Chinese aviation, energy and transportation industries,” Immelt said. These partnerships will also give GE the opportunity to strengthen our own local capabilities, enhancing our ability to serve our Chinese customers as that nation drives its technology initiatives.”
Mark Norbom, GE’s president & CEO for Greater China, said: “The deals we are signing are built upon GE's rapid growth in mainland China in the first three quarters of 2009. They not only represent tremendous growth opportunities for our China platforms but also support jobs in the United States. The partnerships we are building with the Chinese industry leaders will better position GE in strategic growth sectors in China such as aviation, transportation and energy. "
Spanning GE’s industrial portfolio, the announcements include initiatives in the following areas:
· Avionics joint venture: GE Aviation and AVIC Systems will create a global avionics business to develop and market integrated systems for commercial aircraft customers. The joint venture, to be headquartered in Beijing, China, plans to offer fully integrated, open architecture avionics and services for future civil aircraft programs. The joint venture, which was announced on Sunday, may create more than 200 U.S. jobs.
· Cleaner coal energy: GE Energy and Shenhua Group Corporation have agreed to a framework for an industrial coal gasification joint venture. GE and Shenhua would conduct research and development on new cleaner coal technologies to improve cost and performance of commercial scale gasification and integrated gasification combined cycle (IGCC) solutions, and jointly pursue the deployment of commercial scale IGCC plants with carbon capture and sequestration. To further progress "cleaner coal" IGCC technology in China, the US Trade and Development Agency (USTDA) announced its intention to fund the initial steps toward a plant in China based on GE's technology.
· Advancing high-speed rail technologies: GE and the China’s Ministry of Railways (MOR) are considering advancing partnership opportunities to pursue high-speed rail projects in the United States. While GE is the world leader in diesel-electric locomotive technology, GE does not currently manufacture locomotives for high-speed rail travel. A successful partnership with the MOR would allow GE to more effectively compete against European and Japanese companies for high-speed rail related opportunities and would create in the near future about 150 high technology jobs in the U.S. and sustain approximately 3,500 U.S. jobs over time – at least 80% of the content would be sourced from, and all final assembly will take place in the U.S.
· Transportation locomotive assemblies order:CSR Qishuyan Locomotive Co., Ltd. agreed to purchase 300 Evolution® Series locomotive assemblies. The agreement helps to sustain nearly 1,200 clean-technology jobs in the U.S.
· Engine joint venture: GE Transportation and CSR Qishuyan will form a joint venture company to develop, build and service GE’s Evolution® Series locomotive diesel engines in China, where there is significant opportunity for modernization. Of the 12,000 diesel locomotives in China, only a small fraction are advanced technology. Also, as demand for the ecomagination™ certified technology increases around the world, the new company would jointly seek future commercial opportunities.
The announcements came as GE’s “Company to Country” strategy continues to bear fruit. In 2006 GE signed a memorandum of understanding with China’s National Development and Reform Commission (NDRC) to explore broad partnerships with the Chinese government and state-owned companies, especially on GE’s green initiative “ecomagination.” The areas of cooperation with NDRC cover energy, transportation, aviation, water, lighting and other key infrastructure sectors.
GE started doing business in China as early as 1906 and was considered one of the most active foreign companies in the country at the time. Currently GE runs 36 wholly owned or joint venture companies in China ranging from manufacturing, service, research and development, financial services and sourcing, with a total workforce of over 13,000. GE is actively involved in China's infrastructure expansion by offering products and technologies in power generation, oil & gas, water treatment, aviation, transportation, healthcare, security, lighting, power distribution and financial TV.
To learn more about GE’s announcements in China this week, visit http://www.ge.com/chinanews.
