GE's China deals to top $2 billion in revenue, $1 billion in exports
Tags: business management
China is a key market for GE as it works to increase its non-U.S. sales from 54 percent in 2009 to a target of 60 percent. The agreements in aviation, energy and rail being finalized this week during Chinese President Hu Jintao’s visit to Washington are part of that focus — underscoring how global growth translates into revenue and jobs.
The five agreements are expected to deliver more than $2 billion in revenue for GE, which is the nation’s second-largest manufacturing exporter, and generate more than $1 billion in exports from the U.S. Importantly, they’ll be creating or supporting jobs in both countries — including more than 4,500 U.S. jobs.
The deals include:
A joint venture between GE Energy and Shenhua Group Corporation signed on Tuesday to develop coal gasification technologies in China, key to commercial-scale deployment of cleaner coal solutions. This collaboration is expected to generate more than $150 million in revenues over five years and $100 million of U.S. exports in services, R&D and licensing. It will also support job creation in the United States and China, including hundreds of jobs in Houston, Greenville, SC; and Schenectady, NY.
A collaborative agreement between GE Energy and China Huadian Corporation to develop distributed energy combined heat and power projects, which are expected to become the most efficient natural gas solutions for China. GE forecasts at least 50 gas-turbine generator sets being sold and installed in China in the next five years, resulting in $500 million of revenue for the partnership and $350 million in U.S. gas turbine exports from Cincinnati, Houston, Colorado and Oregon. This will support more than 2,100 jobs throughout GE’s domestic U.S. supply chain.
A Letter of Intent signed by GE Transportation with the Ministry of Railways (MOR) to provide $350 million worth of U.S.-built locomotives, locomotive sub-assembly kits, service support and signaling systems for China’s railway upgrade. The export order could support 2,000 U.S. jobs
A Letter of Intent signed by GE Transportation with the MOR to reaffirm both parties’ intent to collaborate on High-Speed Rail (HSR) and electric rail opportunities in North America. The partnership represents a joint investment of approximately $50 million with the potential to support 250 U.S. jobs by 2012 for the first phase of the agreement.
These agreements build on a larger-scale commitment GE has already made last November when GE announced plans to invest more than $2 billion in China through 2012 to expand the company’s R&D and innovation capabilities and create new local partnerships.
Additionally, GE has been selected as one of 10 founding U.S. companies to participate in a new U.S.-China public-private partnership on healthcare, which was also launched during President Hu’s visit and aims to bolster bilateral cooperation advancing technology in and increasing accessibility to healthcare services across China.
Clean tech: The development of coal gasification technologies, such as those in the plant above, will support job creation in the U.S. and China, including hundreds of jobs in Houston, Greenville, S.C.; and Schenectady, N.Y.