GE in Deal With French to Make Jet Engines for Soviets
A joint venture between General Electric Co. and France’s Snecma won an order Friday to provide up to $1 billion in jet engines to the Soviet Union, the latest in a series of East-West aerospace deals.
The accord calls for CFM International, a 50-50 venture of GE and the French company, to provide engines for at least 20 Soviet-made IL-86 aircraft, GE officials said at the Paris Air Show.
The deal, which the officials estimated is worth $750 million to $1 billion, follows a series of ventures between the Soviet aerospace industry and Western firms.
These include:
* Joint work between the Sukhoi Design Bureau and Gulfstream Aerospace of the United States to build a supersonic business jet.
* An accord for United Technologies Corp. to sell Pratt & Whitney jet engines to the Ilyushin Design Bureau for its planned IL-96 jet.
* A Soviet request for Western firms to do initial studies for a possible contract to overhaul the Soviet air traffic control system.
Western industry officials said the growing willingness of the Soviets to work with them reflects a need to find new markets as Soviet military spending declines.
It also shows that Soviet industry, as it gradually gains independence from central control, is seeking the benefits of technical and commercial cooperation with the West, they said.
“Just as in the Western world, their military business is going to diminish over time,” said one U.S. official who requested anonymity. “They have got to find new things to do, and they would rather switch to making commercial engines than to making stoves,” he said.
GE officials said the CFM engine pact was signed Friday with the Ilyushin Design Bureau, Aeroflot and the Soviet Ministry of Civil Aviation.
The engines are expected to go into service on the four-engine, 300-seat IL-86 aircraft beginning in 1994.
Robert Conboy, a general manager with GE Aircraft Engines, said one reason for the agreement including Aeroflot was to ensure that the engines would have an ultimate buyer.
“You have to get the customer on board,” he said.
The engines would improve the IL-86’s fuel efficiency by 25% to 30% and cut engine noise and emissions, he said.
“We believe it will enhance the IL-86 not only for the Soviet Union, but that it also makes the aircraft more attractive to customers elsewhere in the world,” he said.
Conboy said that he expected the deal to make money for GE and that he was not worried about hard currency to pay for it, as Aeroflot had a steady source of this from its international operations.
