GE Confirms LEAP Engine Supply-Chain Challenges

by Carolyn Mathas

We read the trades and national news but seldom tap into what companies tell their investors. Here’s an example from a Barron’s article where GE discusses its LEAP engines and how supply-chain challenges will still be key in 2023.

Expectations are that the commercial-aerospace sector will continue its recovery in 2023. However, supply chain problems aren’t solved yet. At an investment conference, GE CEO, Larry Culp, predicted earnings of more than double during 2023 and a 50% year-over-year growth for its LEAP engines. GE’s goal will be for almost 1,700 machines in 2023. “We’ve got to work through a number of those supply-chain challenges in order to keep pace with that,” said Culp. “This is a complicated undertaking.”

Here’s the problem. A LEAP engine has approximately 2,500 parts from 150 vendors and goes to 20 GE facilities, and the Airbus version of the LEAP only shares about 10% of the same parts with the Boeing version. Staffing at GE and GE’s vendors is also an issue.

In recent years, total employment at Precision Castparts, a key component supplier, has fallen by roughly 10,000 workers, or about 30%. GE, however, managed to grow jobs in its GE Aerospace and ended 2022 with 45,000 people, up from about 40,000 at the end of 2021.

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