How Ge Locked Up That Boeing Order

Late last fall, as frigid winds began blowing outside their headquarters in Evandale, Ohio, the folks behind General Electric Co.'s most powerful aircraft engine were in a bit of a funk. Although the GE90 engine was tailor-built for Boeing Co.'s 777 long-range jet, it continued to be an embarrassing laggard behind the engines of GE's two competitors. Pratt & Whitney was still roaring ahead in sales. Meanwhile, British Airways PLC had just shocked the aviation world by dumping the GE90 in favor of engines from rival Rolls-Royce PLC.

When Boeing began discussing plans for an even longer-range version of the 777 early this year, though, GE Aircraft Engines President W. James McNerney Jr., saw a chance to redeem the troubled project. Digging deep into GE's ample financial resources and harnessing the personal lobbying skills of his boss, CEO John F. Welch, McNerney and his team made Boeing an irresistible offer of financial support. In addition to pushing the technical merits of their powerful engine, industry executives close to the negotiations say GE agreed to help finance Boeing's development of the 777X--a highly unusual arrangement whose value some pegged at as much as $500 million.