GE Venture Will Share Jet Technology With China 266
A user writes "This week, during the visit of Chinese president Hu Jintao to the United States, GE plans to sign a joint-venture agreement in commercial aviation that shows the tricky risk-and-reward calculations American corporations must increasingly make in their pursuit of lucrative markets in China. GE, in partnership with a state-owned Chinese company, will be sharing its most sophisticated airplane electronics (NYT reg. required, reg.-free alternative here), including some of the same technology used in Boeing's new state-of-the-art 787 Dreamliner."
Repeating history (Score:5, Insightful)
Those who do not learn history are doomed to repeat it... see: software piracy, high speed trains, stealth fighters, aircraft carriers. Up next: commercial aircraft!
Globalization (Score:4, Insightful)
Yep (Score:5, Insightful)
Yep. This is how the Chinese have been doing their technology transfer without needing to pay billions in R&D themselves.
They go to a company and tell them that they'd like to build some nuclear reactors or high speed trains or something. The deal they make always goes like:
1) We'll buy the first two nuclear plants.
2) The next two you build using our people.
3) The ones thereafter you give us the plans to build, and we'll do it all ourselves, and pay you a royalty.
Now China has the plans to the AP1000, one of the most modern nuclear plants being built today, as well as a trained workforce in building it, all without having to do any of the R&D work themselves, or pay much more than just the cost of a couple plants (which they get to use anyway).
It's a very clever idea, and companies are all falling over themselves to give away their best technologies to China, since they're so eager for short-term profits, they don't realize they're shooting themselves in the foot, long term.
Turnabout? (Score:5, Insightful)
Good deal for China (Score:5, Insightful)
China is getting a great deal on this. Not only do they get investment, but they get the tooling and most importantly first-hand knowhow to build reliable high-performance jet engines. China has had lots of trouble mastering jet engines. They are very tricky to get right, especially for them to last a long time and not be replaced every 1000 hours. Apparently just because your net.agents stole the plans from poorly-secured GE desktops doesn't mean you actually know how to use the knowledge.
The unnamed state-owned company that GE will be giving money to isn't even identified in the article. This is because state-owned company means that it is an arm of the Chinese government. Americans unfamiliar with the Chinese SOE and searching for an American equivalent merely need think of GM: owned by the government and not so much worried with making profit as keeping workers employed and achieving national political objectives. These SOEs are a major part of the Chinese economy (even though "journalists" like to tell us that China has gone all capitalist now) and doing a JV (joint venture) with them is putting on lipstick and stockings and getting into bed with the government. Whatever happens next, you know you're getting fucked. We are all aware, of course, that under Chinese law JVs are required to be owned 51% by the Chinese partner? And that there is a long list of broken companies in the last ten years that went into JVs and ended up lying by the roadside, lipstick smudged and used condoms hanging out of their asses? Look up Danone vs. Wahaha for a well-known example. GE's slogan, "imagination at work", should serve it well as it goes shopping for lingerie and a nice water-based lube for the pleasure of its new Chinese husband.
Re:Globalization (Score:5, Insightful)
Would China owned companies share any of their military technology with us? We are are simultaneously the strongest and most soft-headed country in the history of the world. How come talk of globalization somehow only includes us selling our shiz off?
Did you expect China to just keep selling you cheap toys and clothing? Eventually an emerging market...emerges.
Re:Yep (Score:5, Insightful)
Re:Repeating history (Score:4, Insightful)
Re:Repeating history (Score:5, Insightful)
The problem that I see for China is that without having to do the R&D, they get the current tech, understand it, maybe make some improvements to that tech. However, I'm not sure if China has the capability to keep up with other global companies, companies that are investing for future technologies. If China doesn't steal those plans, they'll start to fall behind again, which creates a nice purchasing loop for those global companies.
You're assuming US companies will still have any revenue with which to fund R&D. We're not talking about microprocessors here -- the technology doesn't change that fast. The 747 is from 1969. That's the year we first landed on the moon. If China starts selling five year old technology for half price, five years worth of aircraft "innovation" isn't going to make up for the price difference.
Re:Repeating history (Score:5, Insightful)
Wrong. Short-sighted, yes, but irresponsible, absolutely not. Western companies giving away their secrets to Chinese companies are doing exactly the right thing, because this brings them short-term profit, which is what their shareholders want, and exactly what they're paying their CEOs for. The CEOs are doing exactly what their shareholders want them to.
The shareholders want the CEOs to do anything they can to increase the stock price in the short term, so that they can sell their stock at a profit. After that, they aren't shareholders any more, and don't care what happens to the company. The way American corporations are set up, and the way their stocks are trade with such frequency, long-term strategic moves just aren't in their interest.
So they have no one to blame but themselves (Score:4, Insightful)
Re:Repeating history (Score:5, Insightful)
Those Chinese companies may be able to make and improve these commercial airliners, making them cheaper than anyone else, but they won't have the drop on the next new thing, which most global companies are looking for and are investing in.
Next new thing? What's that going to be? Hypersonic aircraft or teleporters or something? Be realistic: there IS no next new thing, not for 50-100 years at least. Commercial jet airliners have been with us since the 50s now, and haven't changed significantly in that time. The only things that have changed are 1) engines are a little more efficient and quieter, but not by orders of magnitude, 2) planes are flown slower now to save fuel and keep prices low, 3) seats are packed together so that only toddlers are comfortable in them, and 4) "air rage" is now common whereas it never happened back then.
There's been some other minor improvements of course: much better avionics (which isn't something that GE does to my knowledge), electronic engine controls (which GE does do), etc.
But the idea that Americans or other Westerners are going to come up with huge new advances to always stay ahead of the Chinese is simply ridiculous. For instance, look at the article subject: this is about GE, which doesn't make planes, but jet engines and associated controls. Jet engines haven't changed much in 50 years, just small steady improvements. Most of the advances in jet turbines were in their early days, not any time recently; they're a mature technology, and current advances are only eking out fractions of a percent in improvement, much like automobile engines.
GE is basically giving away their secrets here, and pretty soon there won't be a reason to buy a GE jet engine, because you'll be able to get one just like it made in China for less.
What's worse, China's society heavily values science and engineers. America's does not. Very few people go into engineering any more, except for software engineering. When was the last time you met an aerospace engineer? Way back in the early 90s when I was in college, we joked that AEs would never find a job, because it was a pretty dead industry. Very few engineering majors went into the AE school. ME (which a lot of jet engine engineers probably have) is a little better, but still not great. Go into any major engineering school, and look at the students: most of them are Chinese and Indian, and these days, they go back to their home country when they finish their degree.
America's days as a technology power (except maybe for web development) are almost over.
Re:Repeating history (Score:5, Insightful)
In this case, stock price is part of the equation, but is not the entire picture.
Re:Don't Trust the Chinese (Score:4, Insightful)
They have no morals in business... because of the Communist mentality that they were brain washed when they were little.
Unlike Enron, Halliburton, ...
The idea that morals are irrelant is a very capitalist and, dare I say it, American one. Isn't is in America that you go to business school to learn that the only thing that matters is shareholder profit? That if you have a clear suspicion that your company's products are harming people's health, you ignore it until a court ruling forces you to do otherwise? And so on - this is not about Communism, mate.
What kind of a business man will put melamine in milk - this is the same type immoral thinking that they have.
The kind of business man that has gone to business school in America. Bear in mind that these businesses have arisen after China have opened up their markets; their managers have gone to mostly American universities to get their MBAs - they have learned their ways from you guys. What you are saying is that people and community should matter more than profit - very, very Communist ideas, if I am any judge.
Re:Repeating history (Score:4, Insightful)