GE and Safran SA Team Up to Fill Manufacturing Hole Left by 737 Max Grounding
General Electric and France’s Safran SA have agreed to work together to increase production of engines for Airbus SE’s rival to the 737 MAX. The agreement, that adds production to the previously established GE-Safran joint venture (CFM International). The timing of the deal is crucial for GE because the grounding coupled with the production halt have stretched GE finances. It is reported that as much as $1.4 billion has been tied up this year as factories produce fewer engines and GE can’t get fully paid for them.
“We have regular discussions” with plane builders “about potential rate increases,” a spokesman for CFM said in a statement.
“We are always in talks with our suppliers, those talks we keep confidential,” a spokesman for Airbus said.
A spokeswoman for Pratt & Whitney said they plan to cut production of the turbofan engine used for the Airbus A320neo, Bombardier planes and Mitsubishi planes. The company says that despite the cuts they still plan on competing “for the one third of Neo commitments that have yet to select an engine.” CFM has seen its market share on the Airbus craft gain in 2019 landing 280 aircrafts for the Indian carrier Indigo a former client of Pratts. Numerous design glitches for the Pratt-made engine disrupted operations for some airlines this year making CFM opportunities grow.
While the mix of engines being produced has changed, Airbus’s overall output of its A320neo will remain at 63 a month, the people said. The European plane maker, which has been studying the feasibility of increasing its total output rates, is still being plagued by its own production issues.
The delivery delays on the A320neo, which is sold out until late 2024, have been a frustrating constraint for Airbus at a time when its rival is facing its biggest crisis in decades. The company plans to deliver 860 aircraft this year over taking Boeing for the the first time since 2011.