GE Aviation’s Slattery On MAX Return, Widebodies And Sustainability

In his first interview since becoming CEO of GE Aviation on Sept. 1, John Slattery spoke via video with Aviation Week Executive Editor for Commercial Aviation Jens Flottau and Editor-in-Chief
Joe Anselmo from the company’s headquarters outside Cincinnati. 

• Positioning GE for long-term relevance
• Confidence in 737 MAX, widebody recoveries
• “Huge challenges” for hydrogen propulsion

AW&ST: You stepped into this job in the middle of the COVID-19 crisis. What key decisions have you made? The organization went through a significant restructuring in the spring. After I arrived, I quickly put in place a Transformation Office to continue to refine those restructurings and to ensure that the organization is right-side for opportunities as we come out the other end. Focusing on cash burn is very important, as is engaging with customers across our organization. Almost every one of our customers around the world is in some form of stress because of COVID. 

In a letter to employees, you wrote that you are preparing fundamental changes and adapting the culture to be more inclusive. What do you mean by that? My fundamental priority is making sure we are in the best possible position as we come out of this pandemic. I’ve devoted a great deal of my attention to running the ruler over the organization with emphasis on three areas: our customers, our culture, and how we position ourselves for near-term and long-term success.

The Transformation Office is charged with examining not just our cost but especially our structure. I’ve spent time visiting with customers in my first few months, and they tell me how much they love our products and problem-solving ability. But they also tell me there is room to improve on fundamentals like speed and ease of doing business, on-time delivery and turn times. There is opportunity for us to be better organized to meet customer expectations, and we’ll do that through accelerating adoption for lean [manufacturing].

With regard to culture, I have had the opportunity to spend time on the production floor in more than a dozen of our U.S. facilities. Getting close to the work and talking directly to the team on the floor unlocks ideas and insights you just can’t get from the headquarters. I am doubling down on creating a culture that energizes those voices and activates those ideas.

Do you find Boeing’s assumptions on how 737 MAX production is going to be ramped up again credible? We’ve already seen a great example of the MAX getting some sales momentum with Ryanair firming up options for 75 MAX 8200s and [CEO] Michael O’Leary also signaling publicly that he wants to grow beyond that into the MAX 10s. I have great confidence in Stan [Deal, Boeing Commercial Aircraft president and CEO] and Ihssane [Mounir, vice president of sales and marketing at Boeing Commercial Aircraft] and all the team there to deliver momentum around the MAX. It’s a great aircraft, it deserves to get the momentum back on the sales, and I’m confident it will.

So that means it won’t have to be replaced soon? I see no reason why there would be an immediate need to replace that aircraft. It’s got a massive backlog, it’s got a broad franchise footprint, it’s got a huge operator base of the [737NGs] that will want to naturally get into the MAX. 

Have you been surprised by Airbus’ ability to deliver as many narrow-bodies as they have in recent months? I think [CEO] Guillaume [Faury] has done a magnificent job. They are admired by everybody in the supply chain, ourselves included, for their commitment, their tenacity, their focus on delivering the narrowbodies. And that’s a platform that GE Aviation has over 60% market share on.

How many undelivered engines do you have in storage, and when do you expect you’ll really start to bleed them off? We are not giving external guidance as to the number of engines that we have stored here. We are very closely aligned with Boeing and Airbus, and of course Comac as they cadence into the C919. We are continuing to see demand for spare engines. 

When you look at the engine maintenance, repair and overhaul (MRO) market, what do you see it being next year compared to what it was in 2019, before COVID-19? The MRO market is not going to look terribly dissimilar in 2021 from 2020. In the fourth quarter of next year, you will likely start to see an uptick in demand as airlines start to meaningfully signal their confidence in inducting engines as they look at the forward bookings they’re getting. But the trajectory of how long the recovery takes and how steep the curve is remains a very big question.

How does the slowdown in certification and service entry on the Boeing 777X affect your plans for GE9X production? I don’t want to get ahead of the certification process. We want to be very respectful of the regulatory bodies, and the FAA in particular, as the home regulatory body on that process for the 777X. After that, we’re going to be working very closely with Boeing and aligned in delivering the 9X in whatever ramp-up will work for all of us, for Boeing and for the airline customers. 

Some analysts believe that the 777X is just too big for this COVID-diminished market. Do you buy that? There is still space in the market for very large aircraft. I’m already traveling to see my customers in North America. I want to visit my customers internationally, but it’s more difficult with borders being closed and quarantine protocols in place. As they go away, larger aircraft will absolutely come back. They will lag the narrowbodies' coming back maybe by 12-18 months, but I have no doubt 777Xs will be filled.

European governments and Airbus are talking about developing a hydrogen-powered, clean aircraft by 2035. Will we see the airframers develop another “traditional” aircraft before we get to the radical revolutionary changes? And how does GE Aviation stay relevant over the long run? With CFMI, our joint venture with Safran, we have roughly two-thirds of the market, so that level of incumbency gives us a lot of relevance. As Boeing and Airbus think about product evolution, whatever their choice is, we will have leading technology to present to them. It will be the airframers’ decision [as to] what level of evolution or revolution they want to embrace in the next round of aircraft, whenever that will be.

We certainly recognize the carbon-reduction benefits of hydrogen, but I think we all see there are huge challenges in embracing hydrogen—certainly in the near term—for traditional commercial aviation. At the GE group level, we are very committed to the early adoption of hydrogen. We will probably see more deployments of clean hydrogen in other parts of the General Electric company before you see it in any meaningful way at GE Aviation. But for sure, it’s something that our global research center is definitely spending real time on and has devoted real resources to. 

Another option GE might pursue would be to develop a more electric version of the Leap for an interim upgrade for the 737 MAX or A320neo, if Boeing or Airbus decide to stick to iterative changes before the revolutionary designs come. We have meaningful efforts in R&D on hybrid-electric technology, and we’d actually expect to have a test vehicle—a small sort of Dornier 328-size platform—flying in a couple of years. I personally believe that as we look at the challenges in meeting the carbon-reduction targets, it will be a combination of a really meaningful move of maybe 25% of the powerplant level coupled with sustainable aviation fuel.

Safran is pushing for a new round of open-rotor testing. Where does open rotor fit into your thinking? GE Aviation flew the first open rotor in 1987, the GE36. So that’s a technology that we’re very comfortable with. In fact, Safran participated in that program. Under the CFM partnership, Safran and GE Aviation will continue to work together at least out to the 2040s, and I hope even beyond that. So I am very excited about what I see in terms of potential fuel-burn savings around the open rotor. We need to hear the voice of the customer, both the airframer and indeed the traveling public. 

Airbus committed to liquid hydrogen early on because of the availability of government funding. Isn’t there a risk of them missing the right path by committing so early? The game theory that the airframe and engine OEMs work through is very complicated. Ours is a business of resource allocation against the competitive dynamics of the market. And determining what the future demand is going to look like—or what level of appetite a customer will have for a particular kind of technology—is more challenging today than it’s ever been.

We’re at a point of inflection, where traditional technologies may not be acceptable to the flying public going forward. I can’t help but always have at the front of my mind that the traveling public will demand the sustainability credentials of whatever platform they get onto. Whatever direction Boeing or Airbus elect to go in, GE Aviation will have the best technology to address the airframe style and design that they elect to push forward with. Whether that’s open rotor, whether it’s more traditional, we’ll be there to support our airframe partners.