Strengthening diplomatic relations, the U.S. government recently gave a go-ahead to diversified conglomerate General Electric Company (GE - Free Report) to proceed with its plans to overhaul 18 aircraft engines sold to Iran. These engines are nearly three decades old. The approval is part of the temporary sanctions relief deal reached by both the countries in January this year.
According to the joint plan of action (JPOA) by the U.S. and other member states of the P5+1 (United Kingdom, France, Germany, Russia and China), certain sanctions leveled against Iran were eased for a six-month period in exchange of its suspension of certain sensitive nuclear activities. The JPOA was a significant step to improve bilateral relations between the U.S. and Iran. The JPOA sought to achieve a peaceful consensus to Iran’s nuclear program over the long term.
With the easing of tensions between the two nations, the U.S. approval came as a gateway to General Electric to offer overhaul services for aircraft engines sold to Iran in the late 1970s. The work will be executed either at company-owned facilities or at license-holder MTU Aero Engines’ facilities in Germany.
The U.S. Treasury Department also allowed The Boeing Company (BA - Free Report) and General Electric to export certain spare parts for commercial aircraft to Iran. The spare-part approval, however, was restricted only to components that ensure continued safe flight operations of older Boeing planes sold to Iran before 1979.
General Electric is one of the largest and most diversified technology and financial services corporations in the world. With products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content and industrial products, the company serves over 100 million customers worldwide.
General Electric currently has a Zacks Rank #3 (Hold). Other companies in the industry that are worth mentioning include 3M Company (MMM - Free Report) and CLARCOR Inc. , both holding a Zacks Rank #2 (Buy).