ISC - CFHM - IHCC

In particular, I’d like to recognize the extraordinarily successful joint venture that has flourished between GE Aircraft Engines and Snecma for more than 20 years.

I think it’s fair to say that this relationship is the best example of global cooperation in this or any other industry.

We’ve proven that international joint ventures - in particular those between the US and France - can provide a solid exchange of ideas, technology and best practices that benefit both parties.

And we accomplished this in a very high technology business, without regard to national borders.

As Pierre Alesi has pointed out, the most shining proof is the CFM56 program - one of the most successful engine programs in aviation history.

Today, I’ll provide a brief update on the CFM56, as well as our other commercial engine programs.

It’s important to note that Snecma has been involved in all of those engines.

I’ll begin with an overview of GE Aircraft Engines ... our markets, our products and our services.

GE serves three main markets :

- Commercial aircraft

- Military aircraft, and

- Marine and industrial users of aeroderivative gas turbines.

We have about 500 customers worldwide, with 52,000 engines in service.

One of the secrets to our success is a long history of technical leadership, beginning with the United States’first jet engine produced by GE during World War II.

To that breakthrough development, we’ve added many other innovations.

- We developed the world’s first turboprop engine ;

- The first variable stator engine ; and

- The first Mach 2 fighter and Mach 3 bomber engines.

- We advanced the state-of-the-art with the first turbine to withstand temperatures of 2,400 degrees Fahrenheit (1,316 degrees Celsius) ;

- We successfully developed the first 30:1 pressure ratio engine ; and

- The first high bypass engine.

- When rising fuel prices were threatening the industry, we developed the first unducted fan engine for unprecedented fuel efficiency.

- We also developed the first variable cycle turbofan engine.

- In conjunction with Snecma, Fiat and IHI, we recently developed the GE90, the world’s first engine to achieve more than 100,000 pounds of thrust.

- And, in response to increasing environmental regulations, we’ve developed and certified the first dual annular combustor, which will be used in several engine programs.

These technologies have given us a leadership position while helping us satisfy customer demands.

As you know, those demands have changed dramatically over the past few years.

One of the inhibiting factors has been fleet overcapacity.

This is the downside to the unprecedented levels of orders and deliveries we enjoyed in the late 1980s, when the future looked much brighter.

Fortunately, much of that overcapacity is now being absorbed and airlines are improving their financial situations.

In the US , airlines as a group were profitable last year and will likely improve further in 1995.

World airlines had a net profit of 1.8 billion dollars in 1994 on international scheduled services, and that figure is expected to climb to 5.5 billion in 1995.

But the competition is still fierce and we expect the industry will continue to restructure as it struggles to lower costs.

The good news is that we see a worldwide increase in revenue passenger miles of about five percent per year, with even higher projections for the growing Asian markets.

Regional carriers will enjoy double digit increases for the next several years as the popularity of point-to-point carriers continues.

However, even this boost in regional traffic will not absorb a significant portion of the increase in revenue passenger miles ... that means there will be greater strain on today’s high-volume, slot-limited airports.

Given that airport expansion opportunities and new sites are limited, we believe there will be a greater demand for larger aircraft and engines.

We’re predicting a demand for more than 12,000 new aircraft over the next 20 years, with dramatic growth coming from new widebody aircraft such as the Boeing 777, the MD11 and the Airbus A330 and A340.

After the turn of the century, we believe that growth versions of these airplanes - or perhaps a new, very high capacity aircraft - will provide significant new application opportunities.

What will airline customers be looking for as they make those purchase decisions ?

For those who have been listening to our customers, the key requirements are very clear.

Aircraft and engines must provide more value to airlines at no additional cost.

They must be efficient to operate.

They must be flying and performing well ... not on the ground, undergoing maintenance.

They must meet increasingly stringent environmental codes.

And, of course, they must fly more people more miles at greater speeds.

It’s a tough list of requirements, but our customers expect lower cost of ownership.

We believe that we, and our revenue sharing participants, can meet the challenge.

At GE, we’ve already taken actions to align our processes with customer requirements.

Increasing productivity is at the core of these efforts ... because better productivity drives the top three customer needs :

- low cost,

- high quality, and

- quick delivery.

Many people believe you can only deliver on two out of these three requirements at any one time.

You can have it inexpensive and good, but it will take time.

You can have it inexpensive and quick, but it won’t be very good.

Or, you can have it quick and good, but it’s going to cost a lot more.

We’ve proven that we can deliver all three.

Here’s how we’re doing it.

. We’re taking a right-to-left approach to designing new products ... we start with the features the customer wants and work backward to meet those needs.

. We’re also focusing on design for manufacturability - making sure design intent is in line with process capability.

Those of you who have worked in manufacturing will appreciate that it often takes a combination of science, experience and luck to translate an engineer’s design into a finished product.

. For several years, we’ve been reorganizing our processes to be concurrent rather than linear.

This effort has dramatically cut product development time, improved communication and enhanced quality.

. In the factory, we’ve used GE’s Work-Out process to redesign our shop floors into manufacturing cells.

. One of the most effective ways for improving productivity has been our Centers of Excellence concept.

The centers are co-located, commodity-focused teams which include representatives from design, revenue sharing participants, sourcing, quality, manufacturing and vendors.

As I mentioned earlier, each of these efforts is having a dramatic impact on the customers’top three requirements - cost, quality and speed.

When it comes to meeting customer demands for reliability and performance, I’m always proud to show this chart.

The CF6 and CFM56 engine families lead the industry in reliability and performance.

In fact, most pilots flying aircraft powered by either of these engines will never experience a single engine-caused in-flight shutdown.

As I’ll mention in a moment, our latest entries into the market continue to build on this reputation.

In order to sell and support these engines, we’ve recently reorganized our sales and marketing group into seven regions - providing industry-leading support around the world.

Representatives in each of these offices cover our full product line in all markets.

Our Product Support operations are also tied into these regional offices.

We have cross-functional teams in place to provide timely responses to customer questions.

Cohesive, regional teams make it easier to identify growth opportunities.

In addition, integrating with Snecma and across our product lines ensures seamless customer support, simplifies communication and capitalizes on their experience and capabilities.

We believe that each of the elements I’ve just discussed :

- our long tradition of technical leadership,

- our focus on customer demands,

- our teaming relationships with other industry leaders,

- our process improvements,

and

- our structure ...

have positioned us well to deliver consistent customer value and reliability.

Now, I’d like to provide a brief update on our major commercial engine programs.

First up is the CF6 family, which has consistently been a leader in technical superiority, customer value and market share.

We’re particularly proud of the outstanding performance that the -80C2 provides to our customers.

This derivative is the industry’s best-selling engine for widebody aircraft, with more than 80 customers selecting it to power nearly 1,200 firm and option aircraft.

They’ve picked the -80C2 in part because of its outstanding reliability.

- The -80C2 has the highest dispatch rate ;

- The fewest total removals on the 747 and 767 ; and

- The lowest in-flight shutdown rate.

Our newest CF6 has surpassed that record in its very first year of operation.

The -80E1, introduced in 1994, has had :

- Zero in-flight shutdowns ;

- Zero rejected takeoffs ;

- Zero engine-caused removals ; and

- 99.8% performance reliability.

That’s quite an impressive record, but we’re not content to stop there.

We will continue our commitment to this program by introducing proven technology enhancements that provide customer value.

A good example of this type of customer-driven technology is the CF6 low emissions combustor.

This combustor significantly reduces emissions well below international standards, without increasing engine complexity or maintenance cost.

While Pierre has provided an excellent update on the CFM56 family, I’d be remiss if I didn’t mention it briefly.

I’d like to highlight the CFM56-7, the newest of the CFM56 family, built by GE and Snecma.

Together, we spent 18 months working with Boeing and our launch customers before development began to make sure we focused on the most important features.

The result is the -7, which will offer customers reduced shop and line maintenance costs, lower fuel burn and improved range, speed and altitude ... all for the same price as previous models.

In addition, GE’s double annular combustor is available as an option for the CFM56-7 and 5B engines, and as a standard item for the GE90.

The combustor, developed in response to customer requirements, significantly reduces nitrogen oxides.

As we look down the road, we see customer demand for a new engine in the 45,000 pound thrust range.

We believe there is a market for this engine.

Its first application could be on a stretched version of the Airbus A340.

We’re currently studying the business viability for this program with Snecma.

We’ve brought together the demonstrated technology, improved manufacturing capabilities, and enhanced management skills gained in the CF6 and CFM56 programs for our most recent engine.

I’m speaking about the GE90, which has been developed in conjunction with Snecma, Fiat and IHI.

We call it the « Engine with the Future built in », and we think that future looks very bright.

As I mentioned earlier, the combination of increased passenger traffic and slot-limited airports will drive the market for larger aircraft and larger engines.

The GE90 is well positioned for these larger aircraft.

The design incorporates many proven technologies, while adding key enhancements to lower fuel consumption, noise and emissions.

The engine has set already set a world record in test at 110,000 pounds of thrust.

It features an unequaled 9:1 bypass ratio, made possible by the 123-inch wide chord fan, which is based on the technologies demonstrated in the unducted fan program.

Specific fuel consumption is about 10% lower than current turbofans.

Emissions are less than two-thirds of current international guidelines, and noise levels are also significantly below requirements.

In addition, because we used many of the process improvements I mentioned earlier, the engine was developed in significantly less time than previous new programs ... and yet it has demonstrated a greater degree of maturity at certification.

The engine was certified in February of this year, when it also completed its successful first flight test on the 777.

Certification of the 777/GE90 is expected in August, with qualification for extended twin operations in September.

We will deliver the first aircraft and engines to our launch customer British Airways in September, with delivery to China Southern in November.

In parallel with this launch, we’re also working on the GE90 growth program, which is the 92,000 pound thrust version for the B market.

The first -92B engine to test is scheduled for August 1995, with engine certification in May of 1996.

The first 777 flight test is planned for August 1996, with first delivery to British Airways in December.

The GE90 also has the capability to grow beyond the 92,000 pound thrust range as the market demands.

As you can see we’ve come a long way with this program in a short time.

We were able to do that in large part because of the outstanding relationship with Snecma and with Fiat and IHI.

As we mark this 50th anniversary for Snecma, I’d like note that in spite of the difficult times our industry has faced in the past few years, I’m confident we’re on the crest of a better business cycle.

While no one has enjoyed the recent downturn in business, we have certainly learned from the experience.

As a result, we believe we’re in an even stronger position to continue to meet customer needs in terms of cost, reliability and performance as we enter the 21st century.

This combuster, which was developed in response to customer requirements significantly reduces nitrogen oxides. And as we look down the road we see customer demand for a new engine in the 45,000 pound thrust range which Pierre mentioned. We believe there's a market for this engine and its first application could be on a stretched version of the A340. We are currently studying the business viability for this program with SNECMA. We've brought together the proven demonstrated technology, improved manufacturing capabilities that we gained in the CF6 and the CFM56 programs for our most recent engine. Talking about the GE90 which we developed in conjunction with SNECMA, Fiat and IHI. We call it the engine with the future built in. And we think that future looks bright.

As I mentioned earlier, the combination of increased passenger traffic and slot limited airports will drive the market for this type of large aircraft, and larger engines. The GE90 is well positioned for these larger aircraft. The design incorporates many proven technologies while adding key enhancements to lower fuel consumption, noise and emissions. The engine has already set a thrust record of 110,000 pounds. It features a 9 to 1 bypass ratio and that's made possible by the 123-inch wide-chord fan, which we demonstrated on previous technology programs in the unducted fan.

Specific fuel consumption is about 10% lower than current turbofans. Emissions are less than two-thirds of current international guidelines and noise levels are also significantly below requirements. In addition, because we use many of the process improvements I mentioned earlier, the engine was developed in significantly less time than our previous new programs. And yet it has demonstrated a great deal of maturity as we move to certification.

The engine was certified in February this year when it completed its first successful test flight on the 777. The aircraft-engine combination is scheduled for certification in August with delivery in September to British Airways. We will deliver and launch for British Airways in September with delivery to China Southern in November. In parallel with this launch, we're also working on a GE90 growth program, which is the 92,000 pound thrust for the B market aircraft. The first 92B engine will go to test in August of '95 with engine certification in May of '96. The first 777 flight test for that aircraft is scheduled in August 1996 with delivery to British Airways in December of '96.

The GE90 has also the capability to grow beyond the 92,000 pound thrust range as the market demands. As you can see, we have come a long way with this program in a short time. And we were able to do that in large part because of the outstanding relationship with SNECMA, Fiat and IHI.

As we mark this 50th anniversary for SNECMA, I'd like to note that in spite of the difficult times in our industry, and what we faced in the past few years, I'm confident we're on the crest of a better business cycle.

While no-one has enjoyed the recent downturn in business, we certainly learned from the experience. And as a result, we believe we will be in an even stronger position to continue to meet customer needs in terms of cost, reliability and performance as we enter the 21st century.

Thank you.