In December 2012, General Electric announced that it was taking over Italian transmission, gearbox and turbine specialist Avio SpA from Cinven and Finmeccanica in a US$4 billion deal – the largest in a string of such moves by GE – that would bring more technology and capability under its roof. CEO Riccardo Procacci spoke with AW&ST London Bureau chief Tony Osborne about how the company, now renamed Avio Aero, is benefiting from the resources and capabilities of its parent two and a half years on.

How far has the integration process with GE progressed?

The formal integration is complete, giving us a set of processes that enable us to interact seamlessly. Now we have really started doing things together. We are making great progress. To be part of GE gives Avio Aero access to an unprecedented amount of resources in research and development. When we approach the customer or supplier, we are not the $2 billion company we were – we have the power of the $24 billion GE Aviation business. All of that is transforming the way we run the company.

Where has the GE takeover taken Avio Aero?

GE Aviation operates in unprecedented times in terms of the number of engines it is developing or starting to develop – Leap, GE9X, Passport and other projects in the military and commercial arenas. As part of GE, we can plug ourselves into these programs better than we would have as a vendor or a supplier. On the GE9X we are growing our participation from 9% (on the GE90) to something that in the end will be close to 15%, and that is huge. The level of our participation is also changing. On the GE9X we own the design of the whole low-pressure turbine (LPT); on the GE90 it was just the components. Here we own integration of the LPT and a good part of its manufacturing. We are also looking at building the assembly for the LPT here in Italy.

Has the GE acquisition affected your business with other engine manufacturers?

We want to keep growing business with our third parties. The relationship we have with Pratt & Whitney is even better than it was before. This may seem like an oxymoron, but Pratt & Whitney appreciates the better, (technologically) richer company we are building, and this can be beneficial to them.

Avio Aero is building the main gearbox for the new Airbus Helicopters H160. Is this an area of growth?

Before the takeover, Avio had a marginal presence in the helicopter transmission market. We looked again at the (market) and found that the industry is interested in seeing us deploy our technology in that field. We have had commercial success on the H160. We see lots of interest (in the market) and have started approaching customers, offering build-to-print services. After a year we will engage some of these customers for build-to-spec. I think we are moving quickly toward a situation where we will be the full design owners of these components.

We have decided to ‘eat this elephant’ piece by piece, rather than focus on harder things to make than a main gearbox. We are looking at other gearbox components, and see good responses in terms of inquiries. We have also involved ourselves in research programs with Airbus Helicopters within the CleanSky initiatives to develop green technologies.

How are the support businesses doing?

Support represents about 15% of business, and our MRO activities are limited to the Italian and Brazilian air forces, which represent around 10% of overall revenues.

On one hand, this segment is lively in terms of being engaged with both air forces. On the other, it is a business that doesn’t offer huge opportunity for growth, as do MRO legacy programs. Of the programs we are involved with, the only one that has longer life is the Eurojet EJ200 or Eurofighter.

Avio Aero has strong relationships in Poland. How did they come about?

Italy and Poland have had a great relationship for many years. The government is active in promoting the country for investment, so it is a good place to look for financing or government support. This is the key reason for building our PoloniAero cold-flow test facility near Warsaw. We believe we will have the most advanced cold-flow testbed in the world. We will start testing operations in summer and move into full production early next year. 

We are also investing in our manufacturing facility at Bielsko-Biala, preparing a new production line for LEAP nozzles, something that will last for decades. With 1,000 engineers in its engineering center in Warsaw, GE has made Poland one of the company’s key partners.