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.”

FMI: www.geaviationsystems.com