GE Aviation Division, Aircraft Engines
This paper discusses General Electric Corporation (GE), specifically the arm which focuses on the production of aircraft engines. Until 2005, the GE Aviation division (GEA) operated under the designation of General Electric Aircraft Engines (GEAE). We will analyze GEA from a product standpoint, as well as from a business operations standpoint. We will firstly discuss the beginnings of GE as a maker of aircraft engines. We will discuss some of the products GEA has built which have resulted in its leadership position as one of the world's best makers of aircraft engines. The product related discussion will conclude with a look into what the future may hold related to engine technology and projects that GEA will focus upon. Secondly, we will examine GEA's unique business human resource management model. Specifically, we will examine GE's leadership education organization and its belief in the practice of rotating senior level personnel between different responsibilities, which it does to foster the professional growth of their key executive players by allowing them to gain a greater scope of experience.
GEA is an operating unit of the General Electric conglomerate of companies. It is headquartered in Cincinnati, Ohio in the United States of America. As of 2010, it employed approximately thirty-nine thousand employees in over eighty countries worldwide, with gross revenues nearing 18 billion dollars, which represented approximately one tenth of GE's overall business. GEA is one of the world's foremost providers of commercial and military jet aircraft engines and the complex integrated onboard systems which support them. These ancillary systems include electric power systems, mechanical systems and avionics interfaces. In addition, GEA operates a sophisticated global supply and service network operation to support its customer base.
GEA has a renowned history of technological innovation. This includes over a dozen "firsts" in jet engine evolution, such as production of the first jet, turboprop and stator types of engines in the United States, the first engine to achieve supersonic speeds exceeding Mach 2, numerous engine capability advances, and noteworthy world records for aircraft engine performance (GE Aviation, 2011).
It is meaningful to consider GEA in the overall context of GE, its parent company. GE operates in over one hundred countries, with a workforce of three hundred thousand employees worldwide. GE's prestigious origins began with Thomas A. Edison, inventor of the light bulb. Edison Electric Light Company (also known as Edison General Electric Company) was started in 1878 and subsequently merged with Thomson-Houston Electric Company in 1892 to create today's General Electric Company. GE is the only surviving company from the 1896 starting list of the Dow Jones Industrial stock market index. GE is presently comprised of fifteen core businesses, organized under four umbrella divisions which include Energy, GE Capital, Home and Business Solutions and Technology Infrastructure. GE Aviation (including Aircraft Engines) is part of the Technology Infrastructure grouping, where it is accompanied by GE's Transportation and Healthcare businesses. Without question, the overall size of the GE organization was a result of an intentional, considered business design that was core to the strategies enabling the success of the GEA division. In the words of CEO Jack Welch in GE's 2001 Annual Report,
"...we appreciate the one huge advantage size offers: the ability to take big swings, big risks, and to live outside the technology envelope, to live in the future. Size allows us to invest hundreds of millions of dollars in an enormously ambitious program like the GE90, the world's highest-thrust jet engine, and the "H" turbine, the world's highest efficiency turbine generator. Size allows us to introduce at least one new product in every segment, every year (Stern, 2002)"
GEA systematically makes large corporate acquisitions valued in the billions of dollars, such as the aircraft engine parts manufacturer Smiths Aerospace. One overall strength of GE has been in its ability to establish businesses which generate lucrative follow-on maintenance and service revenues, after the initial sale of equipment which itself commands substantially high prices and margins. Roughly one third of GE's industrial revenue is generated from the extremely high-margin services aftermarket in which the GEA aircraft engines division is a leader, generating service revenues that exceed equipment sales prices by a factor of six or more.
The present CEO and President of GEA is David L. Joyce, who simultaneously occupies the position of Senior Vice President of GE's overall organization. Joyce rose through GEA's ranks between 1980 and 2008, progressing through the organization in a multitude of significant leadership roles that exemplify the leadership...
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