GE Forges Agreements with Chinese Entities on HSR, Joint Venture

GE and its Chinese partners have announced the signing of a series of "Country to Company" agreements aimed at promoting collaboration between GE and Chinese public and private sector aviation, energy and transportation organizations. The announcements, which were made as part of "GE's Clean Technology Week in China" activities, included the formation of a joint venture in locomotive engines and an agreement to explore high-speed rail opportunities.

Jeff Immelt, Chairman and CEO of GE said, "These agreements share common themes - rapid growth potential, clean technologies and job creation. Whether expanding our existing aviation, energy and transportation relationships or looking at technology collaborations to open up new growth opportunities, partnerships like these help protect and grow employment for both GE and China's infrastructure sectors.

High-speed rail

GE and China's Ministry of Railways signed a memorandum of understanding (MOU) to jointly advance high-speed rail (HSR) opportunities in the United States. GE does not currently manufacture locomotives for high-speed rail travel, so a successful partnership with the MOR would allow GE to compete against European and Japanese companies for high-speed rail related opportunities.

Lorenzo Simonelli, President and CEO of GE Transportation said, "China is a vital partner to GE Transportation's future growth, and we find that China's Ministry of Railways and GE share a common goal — driving high-speed rail technology development more quickly and broadly. We look forward to pursuing this collaboration."

More than $13 billion will be spent over the next five years to support higher- and high-speed rail infrastructure development in the United States. Over the next three years, China will invest about $300 billion into its railways infrastructure, expanding its network by more than 20,000 kilometers, including 13,000 kilometers of track designed for high-speed trains capable of traveling up to 220 miles per hour.

By terms of the framework agreement, at least 80% of the content of any potential high-speed locomotives or signaling equipment would be sourced from U.S. suppliers, and all final assembly would be performed in the United States.

Engine joint venture

GE Transportation has formed a joint venture company with CSR Qishuyan Locomotive Co., Ltd., a unit of China South Locomotive and Rolling Stock Corporation Limited (CSR), to develop, build and service GE's Evolution® Series locomotive diesel engines in China.

The joint venture is scheduled to launch operations at the end of 2011, including the assembly, testing and overhaul of engine components such as power assemblies and turbochargers in China. During the second phase, starting in 2013, engines as well as components will be assembled, tested and overhauled.

"This new joint venture directly aligns with GE's strategic direction to design, manufacture and service product within the region or country in which they are used," said Tim Schweikert, President of GE Transportation China. "GE will continue to supply key engine components for the final engine assembly such as turbocharger and fuel injection kits. Providing these key components also helps sustain approximately 120 U.S. manufacturing jobs."

In October 2005, GE Transportation marked the formal beginning of its partnership with CSR Qishuyan by signing a strategic contract with China's Ministry of Railways to supply 300 6,250-horsepower Evolution Series HXN5 China Mainline Locomotives. More than 100 of these Evolution Series China Mainline Locomotives already have been produced by CSR Qishuyan and placed in revenue service by the Ministry of Railways.

The company noted that there is significant opportunity for locomotive modernization in China, as most diesel locomotives in China would benefit from advanced fuel-savings and emissions-reducing technologies.

Locomotive assemblies

On Nov. 16, GE Transportation announced an agreement with CSR to provide 300 locomotive assemblies for China HXN5 Mainline locomotives produced by CSR Qishuyan with Evolution® Series diesel engines.

The agreement follows an order of 300 Evolution Series China Mainline Locomotives originally placed in 2005. According to the agreement , GE Transportation will supply 300 locomotive assemblies that will be manufactured in Erie and Grove City, Pennsylvania, USA and shipped to China. The assemblies contain key components of the diesel engines and locomotive control systems that will be built into Evolution Series China Mainline locomotives assembled in China. The first batch of the locomotive assemblies is scheduled for delivery at the beginning of 2010.