Will Ge's New Jet Engine Ever Get Off The Ground?

It's 3 a.m. one October morning, and Ronald E. Welsch, GE Aircraft Engine Group's general manager, is frantically dialing suburban Chicago telephone numbers. United Airlines Inc. is about to place the biggest commercial airplane order ever, and General Electric Co. is fighting to supply the engines. Moments earlier, Welsch's negotiators at United headquarters had awakened him with an urgent question. After saying he'd call them back, Welsch groggily scrawled the wrong number. "I started playing with the seventh digit," he says, sighing. "Eventually, I got there." For GE, however, it was already too late. Months of sweat and working through the night didn't pay off. On Oct. 15, United placed its historic engine order with rival Pratt & Whitney, a unit of United Technologies Corp. It was a bitter defeat. After spending 10 years and as much as $2 billion on research, GE is still looking for a launch customer for its new GE90. Worse yet, the engine is now stigmatized as the one United didn't like. Worries Brian H. Rowe, GE's senior vice-president in charge of the aircraft-engine division: "You can't afford to get too far behind." The stakes are enormous. The new engine is GE's big bet on the future. With dismal airline earnings threatening commercial-aircraft orders and military spending on jets tailing off despite the gulf war, jet-engine makers are feeling the pinch. Their best hope is the market for widebody commercial jets, particularly for "widebody-twins"--aircraft such as the new Boeing 777 and the Airbus Industrie A330 that save fuel costs by using just two high-powered engines instead of three or four. Edmund S. Greenslet, publisher of The Airline Monitor, figures the widebody market should grow twice as fast as total demand for airplanes over the next decade. So rivals GE, Pratt, and Britain's Rolls-Royce are slugging it out for pieces of what could be a $20 billion bonanza. "Every sale is a battle," says Pratt & Whitney President Selwyn D. Berson.

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