Former VP, Sales at GE Aviation
Doug has over 37 years experience working for GE International selling aircraft engines. He joined GE in 1980 and led the US sales team to record sales garnering more than 8,000 engine orders. Doug’s last role was Former VP for America Sales at GE where he was responsible for new engine and systems sales and long-term aftermarket contracts for all North and South American customers. Doug retired in 2017 and was the recipient of the GE Chairman's Heroes of Growth Award in recognition for his contributions to the company.Read moreView Profile Page
Doug, could you please provide some history on the relationship between GE and Safran and the CFM entity?
Let me start by defining what CFM is. CFM International is a 50/50 joint venture, between GE Aviation, which is a division of the General Electric company, in the United States, and Safran Aircraft Engines, which was formerly known as Snecma, back in the days, a division of Safran of France. I’d really like to explain a little bit about the history of how CFM became what it was and also some of the early struggles and the launch of this first commercial engine. It was never easy. I’d like to add a not very well-known anecdote of the role of a legendary astronaut, Neil Armstrong, in the launch of this first CFM engine.
The joint venture was conceived back in 1971, during the Paris Air Show, between Gerhard Neumann, president of GE Aviation and René Ravaud, the president of Snecma, at the time. They decided to work together and go after this so-call 10-ton engine program, which was aimed at the single-aisle market, which was completely dominated by Pratt & Whitney, at that time. There was quite a bit of excitement on both sides and they quickly formed working teams, to define and test the first demonstrator engine. GE brought the military and commercial engine experience that they have. Whilst Snecma had a lot of technical expertise, mostly in the military, they had some limited exposure to commercial, thanks to the joint venture they had with Rolls Royce, on the Concorde. Snecma had to create, literally, the sales department and the customer support department, from scratch. GE helped them a lot, in this regard.
In spite of the early excitement on both sides, then next few years were filled with a lot of political drama in the world stage, before they could officially incorporate CFM International, in September 1974; that’s the official date for CFM. To put some context into the scene, at the time, the two countries, the US and the French government, had to give the green light for this joint venture to move forward. One of the complications was, for example, that the core of the proposed engine was using the core of GE’s F101 engine, that powered the B1 bomber, which was a very sensitive military application. The US government was very reluctant to give the okay due to the risks of possibly even sharing technologies between both countries.
If that wasn’t enough, a lot more was happening around the world. I’m talking about 1973, 1974. It was the end of the Vietnam War, the Watergate scandal was at its peak in 1973 and 1974. The Yom Kippur War started in October 1973, followed by the infamous oil embargo that many of us remember. The US and France were not really seeing eye to eye on some of the international issues, especially when France was not supporting the US, in the Middle East, against the oil embargo. Nevertheless, President Richard Nixon and President Georges Pompidou shook hands early in 1974, during their meeting in Iceland and gave the okay for GE and Snecma to move forward, but not without some major, last-minute diplomatic efforts. Nothing is easy.
Now that the CFM entity was incorporated, another five frustrating years ensued, as the partners truly struggled to launch its new turbofan engine. Many studies were conducted, with Boeing, on re-engining the 707. Other studies were conducted with French manufacturer, Dassault and even one concept with McDonell Douglas. All these projects pretty much stalled and an engine customer never materialized. To add insult to injury, Jimmy Carter cancelled the B1 bomber program, sending the GE F101 engine program to a full stop. As I said before, the core of the CFM demonstrator engine is derived from military F101. This new development really put a lot of additional financial strain into the program.
Slowly but surely, all these developments were beginning to cast very serious doubts that a CFM program was ever to launch. The mood, certainly at the GE side of the headquarters, was very low. By pure coincidence, around that time, the FAA was pursuing more stringent noise regulations for the early commercial aircraft, like the 707 and the DC8. This was great news for Snecma and GE, since the CFM engine was designed to run quieter than other similarly sized engines. Just a couple of weeks before pulling the switch on the joint venture, retired president of Douglas Aircraft, an individual called Jack McGowan, anticipating the FAA’s requirements, started an informal dialogue with GE leadership and decided to lead a technical proposal to re-engine a large fleet of DC8 airplanes, owned primarily, by United Airlines, Flying Tigers, which is a cargo company, and Delta.
In spite of the CFM engine fuel efficiency advantages, and the lower noise and durability, United and Delta were more attracted to Pratt’s JT8D engine commonality and the huge fleet that they have. There’s a lot of commonality there. That was not working, for CFM. In the end, United, with the largest DC8 fleet of the three operators, was going to determine CFM’s fate. Here’s where Neil Armstrong, a member of the board of United Airlines, enters the scene. Neil Armstrong is an aeronautical engineer, a fearless astronaut, as we know and was the first man to step on the surface of the moon, in 1969, which was 10 years before. After he retired from active duty at NASA, he was also an engineering professor at the University of Cincinnati, from 1971 to 1979, before joining the board at United.
In 1979, Neil Armstrong led United’s propulsion evaluation team, to evaluate the competing re-engining bits, from both CFM and Pratt, for the DC8 fleet. In the end, United, Flying Tigers and Delta, collectively owned the world’s largest fleet of DC8s. Together, they finally agreed to replace the fleet. The original Pratt JT3D engine, with a CFM-2 turbofan. The first contract was signed with United, to re-engine 28 DC8s, followed by 13 from Delta and 18 from Flying Tigers. That program was called the DC8 Super 70 series. If you add them all up, from the beginning to the end, they probably re-engined about 110 DC8s which, ultimately, were converted to freighters.
With the first CFM customers secured, finally, CFM continued to work with Boeing on re-engining the 707. It resulted in a game-changing decision, the following year, by the US Air Force, to power the new KC-135 tanker, with CFM engines. The KC-135 is a variant of the 707; it’s a military tanker. The CFM re-engining program on the tanker, would continue for decades. Within six more years, CFM engines also secured positions on the Boeing 737 Classic, which started operation in 1984, 1985 and soon after that, on the Airbus A320. Today, CFM International is the most successful producer of commercial jet engines for airlines, in the history of aviation.
What are the respective responsibilities for GE and Safran, in the current CFM business?
On the production side, GE is responsible for the core engine and the high-pressure modules, whilst Safran is responsible for the low-pressure modules. The engine full assembly production is split between the US and France. Each partner ships its own modules to each other, and both have the capability to assemble the engines. Typically, for simpler logistics, Safran assembles the engines that go to Airbus platforms or applications and GE does the same thing when the engine goes to Boeing.
On the sales and customer support side, GE is responsible, geographically speaking, for the Americas, Asia-Pacific and China. Safran leads the team in Europe, Middle East, Africa and India. However, they both collaborate with each other, as needed.
Are there any tensions in their relationship today?
No; on the contrary, their relationship has grown and matured. I think one of the most important pieces of this success, technically speaking, was that they really were a great match. But it wasn’t until you had the two leaders come together and talk to each other, that they decided, you know what, it makes a lot of sense for us to join forces and go after this market. It started with a very high-level agreement and then they found out that, technically, they complement each other. Since then, it has been evolving. I’m not saying that there haven’t been certain challenges, commercially speaking. Sometimes, they need to discuss, what is my content, the pricing and things like that. Every sales campaign out there has a lot of dialogue, discussion and debate. Sometimes they don’t agree with each other on a particular price, because each one has their own different commercial models. But at the end of the day, it is a consensus base. That makes it a very, very special joint venture.
Do you think this JV will be extended and there’s little risk to the relationship not being extended in the future?
The relationship, as such, was already extended until 2040. There is already an agreement, signed between the two, several years ago, that this relationship will continue on until at least 2040. I tend to think that, as new applications come to the market, CFM has a chance to continue and find a way. You have to understand that the agreement between the two is for engines, where neither of those two partners compete. That’s a range between 20,000 pounds of thrust and 34,000 pounds of thrust. I don’t see why that couldn’t stretch a little more than 34,000, to maybe 40,000 or even more. From there on, for example, GE makes engines to be on 55,000, 60,000, 70,000, 100,000 pounds, so there is no competition. With the very volatile model that we have, for aircraft and engines, there’s a lot of risk and these people that are in this business, they’d rather join forces, on a particular venture, than try to do it separately, because it really works against you, if you fail to make the right choice.
How do they split the responsibilities in the aftermarket and MRO?
Actually, before, each one was responsible for its own aftermarket and I’m talking about 10 or 20 years ago, before LEAP. Before LEAP, they both had their own aftermarket organizations; they could compete to win the overhaul and repair, from different airlines. They did that for many years. Then LEAP comes in and both partners decided they were just going to work together; they decided to offer one services proposal, to anybody interested in LEAP and they also decided that new CFM engines, meaning prior models of the CFM engines, would also go together, as one.