GE CEO Larry Culp on Tariffs, Price Increases, and Future Aircraft Engine Technology

Impact of Tariffs on GE

• 🎯 GE is facing approximately $500 million in residual cost challenges due to US tariffs.
• 💸 To manage these costs, GE is implementing cost actions and price adjustments, passing some of the residual pressure onto customers.
• 🤝 The company is working closely with its supply chain and utilizing options like duty drawback to mitigate the financial impact.

Advocacy for Tariff-Free Trade

• ✈️ GE advocates for a return to the tariff-free trade regime established by the 1979 civil aviation agreement, which benefited the US aerospace industry and supported exports.
• 🗣️ CEO Larry Culp has appealed directly to the US administration to reinstate this prior environment, emphasizing its positive impact on the industry's trade surplus.
• 🌍 The industry as a whole needs to speak with a unified voice to encourage a return to a pre-tariff system.

Supply Chain and Production Challenges

• 📈 GE is actively working to mitigate costs and improve supply chain operations to buffer the impact of tariffs.
• ⚙️ The company is focused on identifying and resolving bottlenecks within its supply chain and building capacity to meet increased demand from aircraft manufacturers like Boeing and Airbus.
• 🚀 Despite challenges, GE views the demand from Boeing and Airbus, who are sold out through the decade, as a "wonderful challenge" given its $170 billion backlog.

Future Technology and R&D

• 💡 GE is investing in leading-edge products and R&D, particularly for the US Department of Defense, which represents a significant portion of its business.
• 🔬 The company is exploring open fan engine architecture as part of its RISE technology development program, aiming for significant improvements in fuel efficiency through propulsive efficiency.
• 🔋 This new architecture is a focal point in customer conversations, with the goal of achieving next-step function improvements in fuel efficiency in the latter part of the 2030s.