Wed, Aug 24, 2011
Share Of Unfolding Chinese Aviation Market Trumps IP
Concerns
GE's contract to supply synthetic vision technology to the
state-owned Aviation Industry Corporation of China (AVIC) has
raised some eyebrows in the U.S., where companies often worry about
the security of intellectual property provided to Chinese joint
venture partners. The term "chinese copy" has been a generic term
for decades in American industry. The GE deal is even more
controversial in that it will help AVIC develop airliners which
compete with Boeing and Airbus.
But in comments to the Washington Post, GE officials are
defending their decision, saying the scope of the unfolding Chinese
aviation market is an opportunity they couldn't miss. GE execs
insist there are robust protections for their technology in the
terms of the joint venture, including limits on hiring Chinese with
military or national security backgrounds. The Post also reports a
committee created to ensure compliance has the power to overrule
the full board of the company.
GE appears to be hoping the deal can improve its market share in
avionics, where it currently sits in fourth place. The venture with
AVIC is expected to employ about 300 engineers in the US, but a
much larger workforce in China, discomforting to those promoting
regulation which seeks to improve the US balance of trade. GE has
experience on both sides of that divide, battling to defend its
technology in some cases, while also frustrated in getting the
communist regime to allow imports of its US-made products.
But the company has clearly decided it can't afford to wait for
individual cases to be resolved. As GE Aviation Systems CEO
Lorraine Bolsinger tells the Post, “We don’t sell
bananas. We can’t afford to take a decade off.”
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