GE Aviation, a unit of General Electric Company (GE - Analyst Report) recently announced the acquisition of two precision manufacturing companies, Morris Technologies and its subsidiary Rapid Quality Manufacturing based in Cincinnati, Ohio. The terms of the deal were not disclosed. The acquisition was a strategic move on the company’s part to expand its engineering and manufacturing capacities, primarily to meet the growing jet engine production rate in the upcoming five years. Moreover, GE Aviation also intends to open two new production facilities in the U.S. in fiscal 2013.
Morris Technologies and Rapid Quality Manufacturing primarily serve the aerospace, energy, oil & gas and medical industries. These companies primarily focus on additive manufacturing, the process through which digital designs are taken from computer aided design (CAD) software and laying horizontal cross-sections to manufacture the part. This process is more effective as it can create layered cross-sections using comparatively lesser beam to melt the raw material than the traditional forged parts. Also, this process generates less scrap material during the fabrication process. This is also an automated process for creating rapid prototypes and end use production components.
GE Aviation contributed 13% to General Electric’s total revenue in fiscal 2011. This division is a leading supplier of commercial and military jet engines and components. It also provides avionics, electric power, and mechanical systems for aircraft along with an extensive global service network to support these products.
General Electric primarily competes with United Technologies (UTX - Analyst Report) - Pratt and Whitney division, Honeywell (HON - Analyst Report) and Rolls-Royce. General Electric currently holds a Zacks #4 Rank, which implies a short-term Sell rating on the stock.