GE GE Aerospace

(Updates throughout, adds quotes and detail)

 
   By Robert Wall and Andrew Tangel 
 

FARNBOROUGH, England--The aviation arm of General Electric Co. (GE) could have access to more financial deal-making muscle after the company last month unveiled plans to streamline itself.

"There will be more firepower and so if something came up that I wanted to do it would be available," David Joyce, GE vice chairman and chief executive of its aviation unit told reporters at the Farnborough Air Show. "The board is absolutely more committed to aviation being a centerpiece of the company than it ever has been."

GE last month announced plans to shed its health-care business and sell its stake in oil-services company Baker Hughes. The businesses, along with the train-locomotive unit already being sold, represented about a third of GE's $122 billion in sales last year. Those deals will "unlock value," Mr. Joyce said

GE's shares had fallen more than 50% in the past before recovering slightly since CEO John Flannery unveiled the restructuring. Activist investor Trian Fund Management LP, which has a GE board seat, had called for the conglomerate to slim down.

GE last month was dropped from the Dow Jones Industrial Average. It had been an original member of the 30-stock index since 1907.

Even before the strategy shift, the aviation business wasn't starved of financial resources to make acquisitions or invest in new programs, Mr. Joyce said. The scaled-down scope of GE as a result of the restructuring wouldn't be an impediment to the aviation business, he said.

Mr. Joyce said he expected GE to secure about $15 billion in business at the Farnborough Air Show, helping bolster its backlog.

GE will ship more than 1,100 CFM International LEAP engines along with joint-venture partner Safran SA (SAF.FR), he said, confirming guidance. Deliveries will grow to around 1,900 engines next year and 2,300 LEAP engines in 2020.

GE, through CFM, also is considering offering an engine for a new mid-sized jetliner Boeing Co. (BA) may build. Boeing CEO Dennis Muilenburg said Sunday that a decision on whether to proceed with the program would be taken next year.

Mr. Joyce said the engine maker and Boeing would continue discussions in the coming months about a suitable engine. Rolls-Royce Holdings PLC (RR.LN) and Pratt & Whitney, a unit of United Technologies Corp. (UTX) have also signaled interest.

Mr. Joyce said GE was still studying the business case for the new plane and "wrestling" with assessing the size of the market.

Write to Robert Wall at robert.wall@wsj.com and Andrew Tangel at andrew.tangel@wsj.com

(END) Dow Jones Newswires

July 16, 2018 08:18 ET (12:18 GMT)

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