EoW September 2009

Transat lant ic Cable

Attracted by the state’s pool of tech- savvy workers, GE picks Michigan for a project that will create 1,200 jobs this year

Air wars

The Paris Air Show was good for Airbus – less so for Boeing The perennial – some might say perpetual – exchange of unpleasantries between the world’s two leading aircraft makers is set for another round, and the air over the Atlantic is thick with claims and counterclaims of unfair preferment and advantage. Chicago-based Boeing Co says it expects the World Trade Organization to back the company and the US government in a legal dispute over state assistance to European rival Airbus SAS, which is seeking nearly $5 billion in launch aid for its new wide-bodied A350 jet. Boeing also expects the WTO ruling in its favour to be ignored by Airbus, thereby spurring Washington to action against the four major Airbus shareholders: Britain, France, Germany, and Spain. Retaliation by the Europeans could set off the ugliest and costliest trade dispute in many years. As these matters are in the hands of the WTO, they need not detain us. Meanwhile, the 48 th International Paris Air Show, held 15 th –21 st June at Le Bourget Exhibition Centre, permitted an interim evaluation of the combatants on another field of battle. While neither manufacturer would offer projections for deliveries next year, and both said they spent much of the show reassuring suppliers about build rates, a clear winner emerged: Airbus. Airbus’s Paris orders were worth $6.4 billion at list price. (As reported from the show by Andrea Rothman and Susanna Ray of Bloomberg News, Airbus said it has kept its pricing firm despite the global recession.) The unit of European Aeronautic, Defense & Space Co (EADS) also announced it had 69 com- mitments worth another $6.5 billion, including two A350s for Vietnam Airlines. Boeing won seven commitments for its 777s from Turkish Airlines, and two firm orders for other planes. The world’s leading mobile phone makers pledge that, as of 2010, a universal charger will be able to power all their smartphones Texas Instruments Inc and Qualcomm Inc, two US companies that make components for cell phones, were among the signers of an agreement that would impose a single charging standard for mobile data-enabled (‘smart’) phones sold in European Union member countries. Other companies now committed to developing a standard for phone charging based on the Micro-USB interface include Nokia Corp, Motorola Inc, and Apple Inc (all US), Samsung Electronics Co and LG Electronics Inc (both of South Korea), Sony Ericsson (Swedish), Research in Motion Ltd (Canadian), and NEC Corp (Japanese). These alone account for more than 80% of the global market for cell phones, suggesting that the new charger will likely become standard well beyond the EU. Telecom

Reporting on the opening of General Electric’s new $100-million “advanced manufacturing technology and software center” in southeast Michigan, Detroit Free Press business writer John Gallagher noted a formula for fuller employment. Where skilled labour is available, other elements can be made to fall into place: regional government, corporate leadership, the educational establishment. Commenting on GE chairman and CEO Jeff Immelt’s selection of a home for a project that will generate up to 1,200 jobs in the first year, Mr Gallagher wrote, “The presence of skilled local talent was one reason Immelt cited for GE’s choice of Michigan for a center that could have gone anywhere.” At a joint news conference to announce the opening of the GE centre, Governor Jennifer Granholm said the new jobs would pay in the range of $100,000 per year – welcome news in a state with an unemployment rate for May of 14.1%, the highest in the nation. The first question for Mr Immelt was how quickly local people could apply for work at the centre. He said that GE was setting up a website for the purpose. (“New Facility to Hire Tech-Savvy Workers,” 27 th June) “We’ve had a long association with the state,” Mr Immelt told the news conference, in Birmingham. “The University of Michigan is one of the biggest feeders into the GE system. We’ve long been believers in the quality education of the state. We can tap into some of the great labour resources that already exist in the state.” Mr Gallagher observed that a very considerable “dowry” was offered to seal “this public-private marriage.” The Michigan Economic Growth Authority approved $74 million in potential tax credits for GE over 12 years. The estimated return to the state during that period from increased tax collections would be $146 million. Both Gov Granholm and Mr Immelt gave full marks to US Senator Debbie Stabenow for helping win the GE project for Michigan, which has been devastated by the contraction of the domestic auto industry. One of the largest US firms, GE makes transportation and ❈ ❈ energy equipment. The new centre to open later this year in Visteon Village, about 25 miles from Detroit, will feature a research and development facility to produce next-generation manufacturing technologies for GE’s renewable energy, aircraft engine, gas turbine, and other high-technology products. The company said in a statement that the work “will include development of composites, machining, inspection, and casting and coating technologies for GE’s aviation and energy businesses.”

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