GE Transportation Aircraft Engines Aeroexpo Mexico 2005

1
GE TransportationAircraft Engines Aeroexpo
Mexico 2005
2
GE in Mexico is the largest operation outside the
US and the third multinational in the country.
Navojoa
Juarez
Acuña
Sensing Solutions (IS)
Lighting Eq (CP)
Capacitors (IS) Electrical Motors (IS) Control
Equipment (IS) Data Processing (Capital) IT
Comps. (MS)
Tijuana
?
1,000 Employees
Saltillo
Electrical Sensors (IS)
Monterrey
Washers JV (CP) Transducers (IS) Lighting JV
(IS) Control Panel (IS) Harnesses (AE)
Washers JV (CP) Motors JV (IS) Lighting Equipment
(CP) Lighting Components (CP) Electrical Motors
(IS) Control Boards (IS) Transformers JV
(IS) Electrical Components JV (IS) Medical
Equipment (MS) Turbine Components JV
(PS) Traction Motors (TS) Project Eng JV (IS)
Nogales
Components EDC (IS)
Caborca
?
?
?
?
Data Processing (Capital)
?
?
?
?
Chihuahua
Locomotive Services (TS)
?
?

?
Torreon
?
?
?
?
Tampico

?
?
Locomotive Services (TS)
?
Resins (PL)
San Luis Potosi
?
Pasteje
Compressors JV (CP) Ranges JV (CP) Electrical
Stoves JV (CP) Locomotive Services(TS) HP
Plastics (PL)
Circuit Boards JV (IS)
?
?
?
?
?
?
?
GE in 2005
?
?

?

• 32 Plants
• 31,000 Employees
• 6 Service Shops
• 2 Engineering Centers
• 2 Data Processing Centers
• 21 Distribution Centers
• 24 Commercial Offices

Guadalajara
Queretaro
Locomotive Services(TS)
Refrigerators JV (CP) Electro domestics JV
(CP) RD JV (CP) Engineering Center (AE/PS)
Mexico City
Celaya
Ranges JV (CP) Freezer JV (CP)
Electro domestics JV (CP) Plastics forming JV (CP)
3
Year 2000Complex Environment for GE in
Mexico - Growth Reduction (Internal / External
Competition) - China Visibility - Pressure on
Global SourcesGE seeks opportunities to be
competitive
GE in Mexico Competitiveness Story
4
- Low/Medium Volume, High Mix - Reduced
Cycle and Lead Times - Focus on Projects
withh intensive development time
GE in Mexico Competitiveness Story
GE in Mexico defines 3 basic competitive
principles

• Stability in Results- Credibility Foundation
• Internal Market- Opportunities
• Operating Efficiency- Challenges

5
GET Aircraft Global Cities - 2004
Engineering Location
6
GEAE Annual Procurement The Buy

• 375 Employees

• 65 Shop Cost

• 40,000 Direct Part Numbers

• 95 Parts on Engine

Services (Engine Services)
RSPs/Other (Revenue Sharing Partners)
Indirect (Tooling, Contract Services)
Direct (Component Parts)
6B Total Procurement
7
Sourcing Globalization
Global Scorecard
Volume by Global Pole
948
900
Central Eastern Europe 23
770
691
Asia 42
457
278
89
Mexico Latin America 35
1998
1999
2000
2001
2002E
2003
2004
Continuing Growth in Global Receipts
... Significant Focus in China But Continuing
Growth in Other Areas
8
GlobalizationCommodity Strategy
Global Receipts MM
Supplier Development
Proven Capability
Developing
Fabrications Machined Cast/Forge LP Cast
Airfoils Machined Airfoils Rotating
Parts Cables Configuration Hardware Information
Technology Professional Services Tooling
Small Medium Structural Castings Raw
Materials Gearboxes Gears Composites Fasteners
Maintenance/Repair/Operations Plant Equipment
Rolled/Welded Rings Large Structural Castings Fan
Comp. Airfoils Close Die Forgings Controls
Accessories Bearings Fuel Nozzles
Direct
Indirect
9
GE Transportation Sourcing
10.0B
Material Annual Spend
Double Digit Growth
6.7B
6.0B
5.5B
5.0B
Great Opportunity to Grow With GE Transportation
10
Supplier Base Capabilities
GET Supplier Base 04
AE 84MM Rail 47MM Total 131MM
Capabilities Growth
I
Castings, Machining, Intercoolers
II
Fabrications, Machining, Rolled Rings
III
Fabrications, Machining, Castings
IV
Blades Finishing, Carbon Seals
11
IGS Operation Mexico Office
2003
2000
2001
2002
7 Buyers Functional Reporting MRO Team
Leader Added responsibility
7 Buyers 1090 POs 319 SourceBid events 2.7M
deflation
7 Buyers 1120 POs 701 SourceBid events 7M
deflation
7 Buyers 8M deflation MRO Team Leader All
e-tools engaged
One Global Group
Tactical Sourcing
Complex Negotiations
Alignment with IGS

• Top Local National talent recruited
• Real global exposure of business
• Lower cost structure
• Local National Leadership since 2002
• Experience in all Indirect commodities
• Military Procurement

Expansion of Roles and Trust in Talent
12
Summary

• Mexico Cost Stability Still Attractive for US
  Market...Need Structural Reforms to Capture
  Investment
• Sourcing Infrastructure in Place...Functional
  Extension of CoEs
• Stable Supplier Base...Select Capabilities and
  Execute Opportunities
• Opportunities in Rail Low Volume, High Mix,
  Large Size Components.. Aircraft, executing
  growth opportunities