GE Aviation eyes Vietnam as global supply chain link

GE Aviation eyes Vietnam as global supply chain link

The world’s largest jet engine maker GE Aviation, an operating unit of US industrial conglomerate General Electric, is looking to incorporate Vietnam into its global supply chain, taking advantage of the group’s strong presence in energy manufacturing in Vietnam.

David Joyce, president and CEO of GE Aviation told VIR that GE Aviation was “actually looking at putting some of our work in GE’s operating energy facility in Vietnam”. Joyce did not go into detail about the plan other than claiming that it was likely “this will happen”.

Joyce referenced the Haiphong manufacturing complex located in the northern port city of Haiphong, which GE has invested more than $110 million in since 2009 and now employs more than 500 local engineers and skilled workers. Wind turbine generators and other energy products manufactured at the Haiphong facility are exported to GE’s manufacturing and service centres around the globe.

With GE Aviation’s plan turning into a reality, Vietnam is likely to become a bigger player in the global aviation industry supply chain.

European aircraft maker Airbus announced this April that Nikkiso Vietnam, a Vietnam-based Japanese company, would produce and supply composite interior parts and outer panels to retrofit planes to meet new Sharklet specs. Production was implemented under a sub-contract with the Korean Air Aerospace Division, the sole supplier of Sharklet for Airbus. Airbus said that when production commenced before the end of the year, about 50 Vietnamese employees would work directly for Airbus through the Nikkiso contract.

Three year ago, Nikkiso Vietnam also shipped its first set of blocker doors, a key component on Boeing 777 airplane engines, to Spirit AeroSystems. Nikkiso Vietnam is a wholly owned subsidiary of Japan’s Nikkiso, located in northern Hung Yen province. The facility, with an initial investment capital of $1 million, started operating in 2010.

Meanwhile, last year, Japan’s Mitsubishi Heavy Industries, after four years manufacturing flaps for Boeing aircraft in Hanoi’s Thang Long Industrial Park, decided to expand its production capacity for aircraft components, aiming to supply more spare parts to Boeing. The new factory will produce components for the Boeing 777 jumbo jet that are currently made at the Mitsubishi Heavy Industries’ Nagoya Aerospace Systems Works.

Mitsubishi Heavy Industries built their first factory in Vietnam in 2007 and started production in 2009. The factory, initially capitalised at $7 million, produces flaps for the Boeing Next-Generation 737.

Korean Aerospace Industries Ltd, South Korea’s aeroplane maker, also had plans to build a manufacturing facility in Vietnam to manufacture equipment and components for Airbus aircraft. The facility, with preparatory steps still under discussion, could be built in the central city of Danang’s hi-tech park.

Headquartered in Cincinnati, GE Aviation currently employs 44,000 people and operates 79 manufacturing facilities and 11 engineering centres in 24 countries worldwide. The company, which recorded revenues of $21.9 billion last year, has announced seven new factories in the past seven years to manage higher production levels and a growing services business.

In October last year, the national flag carrier Vietnam Airlines signed a $1.7 billion deal to purchase 40 GEnx engines from GE Aviation to power its fleet of Boeing 787 Dreamliners scheduled for delivery in 2015. The value of the deal was said to be the largest in two decades of GE’s operations in Vietnam.

“The delivery streams are set and we are very excited about that order,” Joyce told VIR.

In a similar move, a representative of CFM International, a 50-50 joint venture between GE and France’s Snecma, told VIR that the first airplane from the budget carrier VietJet Air’s most recent order would be delivered in November. VietJetAir announced at the Singapore Air Show in February this year that it had selected CFM International’s CFM56-5B engine to power its 21 Airbus A320ceo family aircraft. The agreement is valued at more than $800 million.

And it doesn’t stop there, our on the ground entertainment offers the newly introduced Farnborough Airshow Live, the interactive and informative live stage show with fun and colourful presenting, competitions and interviews.

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