Czech Republic sees new GE aircraft engine investment as signpost for future

20-10-2016

US manufacturing giant General Electric has signed an agreement to design and build a new general of turbojet aircraft engines in the Czech Republic. Apart from the 500 new jobs that are promised, Czech politicians have highlighted the deal as an indicator of where the country wants to be with high paid jobs backed up by research and close ties with universities.

GE Aviation Prague, photo: CTKGE Aviation Prague, photo: CTK Prime Minister Bohuslav Sobotka described the General Electric deal signed on Thursday as a signpost for the Czech Republic’s future, bringing high paid skilled jobs where workers add considerably to the value of the end product and research institutions and universities are involved in research and development.

The path from initial talks about the investment – which will make the Czech Republic General Electric’s sole site worldwide for producing these turboprop engines from 2022 – to the final deal has been long and difficult. One of the reasons is that this deal is a lot broader than those in the past which simply aimed at bringing production capacity to the country. General Electric International’s vice president John Rice gave some of the background to the investment decision at the signing ceremony:

GE Aviation Prague, photo: CTKGE Aviation Prague, photo: CTK “We have been active here for decades. I want to go back to 2008 when we invested in the Walter engine company. That introduced us to new capabilities in the Czech Republic and from that foundation – producing five engines a year – to today – producing 75 engines a year – we have seen the capabilities of the Czech workforce. That experience and the confidence that we have in the people that are doing the work here has created the reason for us to make this announcement.”

The total investment in the new engine plant is estimated to be around 1.35 billion crowns (around 50 million euros) but the breakdown of what is being brought to table by the US conglomerate and covered by Czech investment incentives hasn’t been revealed. The site for the new factory should be announced by the middle of next year.

One particular aspect of this agreement is the commitment of the Czech Technical University in Prague (ČVUT) to bring its know-how and research to the development of the new GE aircraft engines.

And the aircraft engines themselves? Well, GE sees bright prospects for these sort of engines for propeller aircraft which are mostly used on aircraft making short-haul flights of a few hundred miles but often have a range of 1000 miles and beyond. GE Aviation general manager Paul Corkery:

GE Aviation Prague, photo: CTKGE Aviation Prague, photo: CTK “From our perspective, we think this market is going to continue to grow. We think that it was ready for a new technology step and we are bringing that new technology with this engine – its is a very high-tech engine. So we think that this is the right investment and the right engine and it’s going to grow over the next couple of decades.”

GE sees demand for its new turbo prop engine – which should consume around 15 percent less fuel than current models – growing in the range of high single digit figures annually.

20-10-2016