The mood was raucous April 2 as employees stood shoulder-to-shoulder in blue T-shirts emblazoned with the slogan “We Are Go.” Larry Culp was just back from the Lower Manhattan, where he and his fellow CEOs—his General Electric “cousins”—had rung the opening bell at the New York Stock Exchange.
Over five years and with a generous helping of tough love, the low-key executive had saved a crippled company by breaking it up. At this event in Evendale, Culp was smiling, backslapping, and clearly ready to launch the next chapter in the life of a company more than 130 years old and yet just a few hours young.
Those GE “cousins” on the stock exchange podium had been brothers—members of the same company that could trace its roots back to Thomas Edison’s incandescent light bulb. GE was once one of America’s foremost conglomerates with a history that had touched almost every industry from refrigerators, credit cards and gas turbines to radio, television, and medical instruments, but under Culp it’s split into three parts. Its most lucrative and innovative slice, the aviation business, was now officially known as GE Aerospace and was keeping its headquarters in suburban Cincinnati.
“It’s a great day for Evendale and, really, the entire region,” said Richard Finan, long-time mayor of probably the smallest U.S. town with a Fortune 500 company (population 2,600). While the headquarters complex sits off I-75 on the northern edge of Hamilton County, GE Aerospace facilities are staffed with highly skilled employees in West Chester, Springdale, Dayton, Peebles, and Northern Kentucky.
And, while the company’s supply chain is global, local business such as Fairfield’s Element Materials, Reading’s General Tool Company, Sycamore Township’s Cincinnati Thermal Spray, CTL Aerospace in West Chester, and Sharonville’s StandardAero are anticipating a bright future with the high-flying Culp and crew.
Element Materials has signed a long-term lease for 21,525 square feet of new space in Blue Ash and is in the process of hiring 65 more employees. General Tool purchased more than six acres of land on Evendale’s AeroHub commercial campus and is building a 56,000-square-foot, $8.5-million advanced manufacturing facility that will house at least 47 professional machinists, fabricators, and engine assemblers.
Perhaps the changes to come are embedded in the new Aerospace name. “We look at that name as aspirational,” says Mike Kauffman, GE’s vice president of supply chain. “We recognize that powered flight needs to go higher, faster, hotter, and more efficiently, so that opens the aperture of where we work. We certainly believe that our technologies play beyond just commercial transportation and aviation.”
The aviation industry’s supply chain is smaller and more specialized than most sectors, and the capital costs required to build manufacturing centers to serve a large corporation like GE Aerospace can be daunting. “So aviation suppliers tend to locate around hot centers, which for us are places like Wichita, Kansas; Seattle; Connecticut; Texas; and here in Cincinnati,” Kauffman says. “The locally based suppliers you mention make a major component or module subassembly for us, and many have offices or manufacturing facilities all over the globe.”
Kauffman is cautious about predicting that GE Aerospace will attract more suppliers to the Cincinnati region, noting it’s often less expensive to transport their products than it is to build new infrastructure. “Rates of production are so important to the auto industry,” he notes, saying suppliers in that business tend to be located just a few miles from the assembly line. Where one Detroit factory might roll off 1,500 cars a day, GE produced about 2,600 engines in 2023. And yet, when adding in the company’s partnership with French manufacturer Safran, that makes it the world’s largest engine producer.
“What I think you’ll see going forward is, as we grow, it’ll become more desirable for our suppliers to build or expand here, as we’ve already ready seen,” says Kauffman. “But the overall benefit to the area is being felt more broadly right now with what we call indirect materials”—businesses such as hotels, restaurants, conference centers, and office suppliers like Cintas, which are injecting real-time fuel into the regional economy.
It’s been more than 120 years since the Wright Brothers soared above the sands of North Carolina’s Outer Banks, and it took just 66 years to put Neil Armstrong’s first footprints on the moon. The aerospace industry continues to evolve, says Kauffman, with a focus on efficiency, advanced materials, and clean-burning fuels. The engine of the future, he says, may well run on hydrogen—a clean-burning element that’s part of a wide variety of sustainable aviation fuels (SAF) that GE and other manufacturers are studying and testing.
SAFs are environmentally friendly, reducing greenhouse gas emissions by at least 50 percent compared to petroleum-based jet fuel. Aviation accounts for roughly 8 percent of U.S. emissions. With commercial airlines, SAFs show promise in improved engine efficiency and reduced cost. For the military, SAFs could allow a fighter to stay in the air longer, maneuver faster, and increase its combat potential. And, in general, SAFs can reduce the country’s dependency on foreign sources of fuel.
“We’re investing and developing technologies on multiple fronts, looking for the sweet spot where we can focus on the next generation of aircraft engines,” Kauffman says. He talks enthusiastically about a suite of technologies centered around hydrogen, different propulsive drive systems, hybrid electric, and unducted and un-shrouded fans—all part of a program GE calls “RISE,” or Revolutionary Innovation for Sustainable Engines.
“Our whole fuel infrastructure has been centered around petroleum to gasoline, but hydrogen carries its own challenges,” he says. Since it takes a lot more hydrogen to fuel a jet, the key challenge is scale. How do you transport hydrogen fuel and safely store it at the airport? How do you fuel the plane and “keep it in the tank” safely? And how do you make it cost competitive?
Hydrogen isn’t the only SAF the company is studying. Could a corn farmer in Iowa someday be growing the feedstock that fuels GE Aerospace’s next-generation engines? How about fuels made from vegetable oils and cooking fats? Maybe municipal and landfill waste? Pond scum? GE, says Kauffman, has always been “engine agnostic” when it comes to developing new metal alloys, ceramics, and turbine blades. So it is with new sustainable fuels and, eventually, the engine designs that will support them.
“The supply chain we have today will be completely different in the future,” he predicts. “We’re just in the demonstration phase of these fuels now, but once we land on the right formula we’ll begin to look for the right partners and suppliers to make it happen.”
The GE supply chain isn’t comprised of just widgets and multi-syllabic chemical materials. Perhaps its most important link is brain power. And that’s an ongoing challenge for Kauffman and his GE Aerospace colleagues. “It’s one of the key constraints in our industry,” he says, citing a range of critical professions where demand is exceeding supply. “This isn’t the heat-and-beat, grind-it-out days of the old dirty factory floor. You’re dealing with high tech, expensive machinery, and processes that require deep knowledge, skill, and innovation. Employees with these skill sets aren’t easy to find.”
As air travel returns with a post-COVID vengeance and GE Aerospace is determined to remain a market leader in the commercial aviation engine space, the “Help Wanted” sign is flashing green in Evendale. A lot of the new hires are expected to be homegrown. “We have roughly 1,000 positions open right now,” says Mike Benson, the company’s chief talent officer. “They’re highly skilled, highly technical jobs. We’re hiring talent that will not just support and improve our current aircraft engine programs but will be on the forefront of developing new technologies to shape the future of flight.”
Some of the new hires will bring on-the-job experience and even leadership roles from other firms, but Benson also has his eye out for recent college graduates who contribute an elan to an organization that wants to be known as an innovator. “We have strong relationships with each of our local universities,” he says, noting that 35-40 percent of hires over the last several years are graduates of the University of Cincinnati, Xavier University, University of Dayton, and Northern Kentucky University. “A number of these employees have started here, gone elsewhere in our system, and come back—and maybe have done that more than once.”
The company, Benson notes, also contributes to the Cincinnati region’s diversity by bringing in employees from all over the world to work and live here—some temporarily, some permanently. “If you think about the people we hire and will hire, they’re experts in engineering, ceramic matrix composites, digital technology, and manufacturing processes,” he says. “These are complex and demanding jobs that will become even more so as technologies advance and competition increases.”
Complex and demanding jobs that are well-paying—that brings a smile to Mayor Finan’s face. “Evendale lives on payroll taxes, as most cities do,” he says, “and this year, at the end of the first quarter, we had already collected $3 million. That’s enough for us to live on for a whole year if we didn’t take in another dime.”
GE, Finan says, encourages its employees—whether they live in Evendale or not—to pay the city’s 1.2 percent payroll rate. Most do, and a few non-residents apply for refunds. Evendale’s finances are so healthy that it’s funding a new $6 million service building in cash.
While Benson works to address GE’s immediate staffing needs in order to keep the company on a growth spurt, he notes that the future presents its own challenges. A 2022 report from the National Science Board found that STEM education quality (science, technology, engineering, and mathematics) has been declining in U.S. high schools since the 1980s. STEM programs in nations such as China, South Korea, Japan, and even Russia are ranked higher.
“What we see is that the performance of U.S. children has not kept pace with the performance of students from other countries in science and mathematics for a decade or more,” says Julia Phillips of the National Science Board. “We have pretty much stayed steady, and other countries have improved dramatically. When you look at the closest economic competitors to the U.S., our scores are in last place in mathematics and in the middle of the pack in science. Math scores have not improved for more than a decade.”
Three years ago, GE sought to respond to this growing challenge with the “Next Engineers” program, which it runs jointly with UC. The goal, says Benson, is to spark interest in STEM-related careers among middle and high school students by connecting them with working GE engineers.
“In middle school, we’re just trying to open eyes to the possibilities and build a relationship,” he says. “In ninth and 10th grade, we’ve had 500 students involved in a summer weeklong program, while junior- and senior-year students get more hands-on experience and a lot of quality hours working with our team.”
The hope is that a good number of Next Engineers students matriculate into a college scholarship, an internship, and eventually a full-time job designing new engines, testing new material composites, or experimenting with new aviation fuels. “It may not uniquely benefit GE,” says Global Director of Public Affairs Meghan Thurlow. “The student may end up working for someone else, but Next Engineers is an important part of our commitment to both the community and to the industry. Developing a pipeline starts with showing the students a powerful vision of an engineering career and what it would be like to be a part of this workforce. We’re putting the E back in STEM education.”
The program’s first Cincinnati-area cohort of 45 high school students graduated in May. Many of these GE Engineering Academy students are heading to UC in the fall, scholarships in hand and an already-rigorous academic experience under their belt. Since the program started, more than 18,000 students in Cincinnati, South Carolina, the United Kingdom, and South Africa have participated in the Next Engineers curriculum. GE is expanding the program to Warsaw, Poland, and three other cities through 2028.
In an attempt to ensure the company attracts a diverse and inclusive future workforce, the company created the LIFT program, which stands for Leaders Innovating Flight for Tomorrow. Nearly 100 college students from minority communities across the U.S. participated in the first LIFT summit last summer, and the three-day program is being expanded to 130 participants in July.
Students selected for the program are typically rising college juniors and seniors who, in addition to getting an inside track on internships, spend time networking with key executives and peers, tour the various GE manufacturing and research facilities, and get a close-up look at career opportunities in the aviation industry. They may also take in a Reds game, sample three-way chili, and take in the charms of what one day could be their hometown.
As the aviation industry continues to grow and innovate, GE Aerospace—even before it became an official stand-alone company—announced its intent to invest more than $650 million in infrastructure improvements. In Ohio, the company will spend about $107 million to upgrade a variety of machinery, specialized tools, hoists, and test cells that will allow the company to accelerate manufacturing and test regional aircraft engines, military helicopters, and fighter jets. Those investments will be applied to facilities in West Chester, Evendale, and Peebles.
“We’ve noticed a big uptake in building permits from them to upgrade what they have and add to it,” says Finan, noting the company’s largest Evendale building was built before World War II. “It’s the largest building in the U.S. under a single span, but it obviously needs updating. GE has a lot of land for expansion, so we’re looking forward to the big things they have planned.”
Referencing GE’s billion-dollar-plus advanced engine contracts with the Air Force and nearby Wright-Patterson Air Force Base, Finan predicts the Evendale headquarters could “end up being about 40 percent manufacturing and 60 percent research and development.” Despite Evendale’s love affair with GE, he says, love doesn’t have to mean dependency. The village has cobbled together land over the last several years and continues to add to its AeroHub advanced manufacturing campus, which Evendale is populating with a diverse mix of companies, including GE suppliers such as General Tool.
In redesigning the company’s culture, Culp has leaned heavily on promoting safety and demonstrating leadership humility. The CEO is a Zenlike executive who brought “lean management” to the birthplace of Six Sigma, with a strong focus on customer satisfaction, community involvement, and safety. Those qualities seem to form the backbone and focus of the company’s philanthropic arm, renamed the GE Aerospace Foundation.
GE Aerospace wasn’t in business even a month before leaders announced a major commitment through the company foundation: a $1-million workforce development contribution over the next three years to the United Way of Greater Cincinnati, with another $1 million tranche earmarked later for the region’s benefit.
“We’ve been working in a co-creation mode with GE to help create a manufacturing workforce that can fill the pipeline of employees that GE and other manufacturers here will need for the future,” says Moira Weir, United Way’s local president and chief executive officer. “With these funds, we’ll work with our partners to identify, train, educate, and find jobs that will make a difference.”
Funding will go from United Way to nonprofits and educational/training centers that will choose individuals for grants ranging between $25,000 and $50,000. United Way hopes to announce the selected recipients by mid-summer. “These grants really showcase how private funding and philanthropy can drive change,” says Weir.
The foundation also renewed GE’s long-standing partnership with Airlink, a nonprofit that organizes quick responses to disasters all over the world. In 2023, Airlink directly assisted more than 12 million people impacted by disasters such as the war in Ukraine, massive floods in Brazil, the Turkey-Syria earthquakes, famine in Africa, a cholera outbreak in Haiti, and wildfires here in the U.S.
“When disaster hits, speed is what counts in responding,” says Thurlow. “Airlink can get food, medicine, water, and relief workers to where they’re needed quickly. Our support exemplifies our purpose as a company, which is to lift communities up, especially when they’re in need.”
The “lift” that seems to be a mantra at GE applies to its employees as well. Seventy years ago, GE pioneered the “matching gifts program” with employees: You give to the charity of your choice, and we’ll match it. Since then, the GE Foundation has contributed more than $1.5 billion to its employees’ favorite nonprofits.
Today, matching gifts are standard at many Fortune 500 companies. The newest employee incentive was announced as GE Aerospace became a stand-alone in April, but it didn’t get much press until Culp mentioned it six weeks later in a speech at the Washington Economic Club. All 52,000 GE employees will become equity investors in the new company through the issuance of GE shares.
Culp explained the stock award as a way to bring the team together and give each employee a stake in the company’s future. It has generally received positive reviews from analysts and, considering how GE’s stock has thrived since the split, employees likely are happy as well.
As for investors? The business is now solidly focused, and the future looks exciting. The economic scars from the lean years under the old regime—and not “lean” like Culp means it—appear to be healing. GE Aerospace’s first quarter results showed revenue up 15 percent ($8.1 billion) and operating profit up 24 percent ($1.5 billion). Orders increased 34 percent to $11 billion. The stock price, at the end of the new company’s first two months of operation, was up more than 18 percent.
Like Mayor Finan, the Street seems to be bullish. UBS, in late May, raised the company’s target price from $191 to $201, noting a marked increase in air travel and subsequent need by the airlines for more planes, the company’s dominant position in the aviation space, and its engine presence on both Airbus and Boeing products.
“My grandfather started out entry level at GE and was that typical American dream story, working here his whole career,” says Thurlow. “He’s still alive, and he shares his opinion on how the company is doing.” She tells him the truth: The company is doing just fine.