Manufacturer of jet engine parts expanding

July 30, 2010
| By Pete Daly |
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MUSKEGON — The first transatlantic flight of the Boeing 787 Dreamliner last month may have seemed far removed from Muskegon, but that much-anticipated new airliner is just one part of a promising future for Johnson Technology.

The aerospace company, a wholly owned subsidiary of the General Electric Co.’s aviation division, is in the process of a major expansion that will result in a new, third plant and increase employment by an estimated 164 new jobs over the next three years.

Right now the company is waiting for environmental test results of a wooded site in the Airport Business Park in Norton Shores, where the new coating plant may be built.

In June, on the recommendation of the Michigan Economic Development Corp., the Michigan Economic Growth Authority approved an amendment to an existing state tax credit awarded to Johnson Technology last year, in return for a $15 million investment in new equipment that is increasing employment in its plant in the Port City Industrial Park in Muskegon.

The amendment reflects a larger tax credit, based on an additional $50 million investment GE will make in a totally new plant where up to 90 new employees will coat parts used in jet engines.

David M. Yacavone, president of Johnson Technology, said that together, the two investments in expanded production will total $66 million and add 164 jobs. About $16 million of that is being spent now in the first phase, and some of the expected 74 new employees have already been added, bringing the company’s total payroll to about 520. Half are at the original plant in Muskegon and the other half at the plant at 6060 Norton Center Drive in Norton Shores.

The additional $50 million expansion and hiring of 90 more employees will take place over the next three years, he said.

Johnson is a Muskegon-based aerospace company acquired by GE Aviation in 1997, according to Yacavone. The company that was founded in a garage in 1963 has changed hands about seven times.

Yacavone said that in the mid-1990s, its sales were less than $40 million a year.

“In 1998, we moved into the second plant, and we filled that plant up. We’re well over $230 million in sales now,” said Yacavone.

Over the next couple of years, he said, “I wouldn’t be surprised if we ended up somewhere between $280 (million) and $320 million” in sales.

The Boeing Dreamliner, which uses about 20 percent less fuel than comparable airliners in service, is getting closer to going into full production, with several hundred already ordered by airlines around the world. GE Aviation is supplying its new GEnx engines for many of the Dreamliners, and each of those engines will contain six types of parts that are manufactured by Johnson Technology.

Johnson’s production for Dreamliner engines “wasn’t really active” last year, according to Yacavone. While he is not at liberty to reveal specific numbers, he said its Dreamliner engine work has increased this year to about 25 times the volume of last year.

“In the future, it’s going to rival some of the other” major orders the company has, said Yacavone.

“What we produce are components for the hot section of jet engines — the high-pressure turbine, which is the most challenging place for these parts to live because it’s the hottest,” said Yacavone. Those parts are vanes, shrouds and shroud hangers for each of the two stages within the high-pressure turbine.

In addition to the GEnx engines, “we do a lot of other military and commercial engines,” said Yacavone, with the single biggest part of the business being parts for CFM56 engines used in the Boeing 737.

Johnson makes all the high-pressure turbine vanes and turbine shrouds that go into the CFM56, which is made by a joint partnership of GE and Snecma, a French firm. “There are 28,000 of those installed in the world. One takes off every three seconds somewhere in the world, and we make all those parts here — we’re the only one making those parts for those engines,” said Yacavone.

Last week the Chinese airline Air China announced it had ordered CFM56 engines on 20 A320 Airbus aircraft it is buying.

“We’ve got a part that’s a pretty good revenue stream for us on the Boeing 777, and then we actually make parts for every one of the Air Canada regional jets, the 50-, 70- and 100-seaters,” he said.

Most of the investment GE Aviation is making in Johnson Technology is sophisticated manufacturing and processing equipment. The building where heat-resistant coatings will be applied to jet engine parts is probably a $3 million structure, according to Yacavone. It will be a 30,000-square-foot structure to start but designed to expand to 60,000 square feet over three to four years.

The coating facility will be doing work that had been farmed out to other plants in South Carolina and Indiana. Yacavone said the new coating facility will also work on parts coming from other GE locations in other states.

“We have a really great work force here,” said Yacavone. Many of the company’s salaried engineers were educated at Ferris State University, Michigan State and the University of Michigan, he said. Johnson Technology also has its own finance department, HR, tooling design, machine programmers, IT, materials planners and purchasing.

The weakness in other manufacturing sectors in Michigan has been good for Johnson Technology. Yacavone noted that many of the aerospace company’s employees previously worked in the automotive and office furniture industries.

When the Boeing Dreamliner landed at the Farnborough International Air Show in England last week, the president/CEO of Boeing’s commercial airplanes division said the commercial aviation market “is clearly coming back.” Boeing had more than 3,300 unfilled orders for commercial aircraft at the end of June.

GE Aviation has been doing well lately. Recently, Gov. Jennifer M. Granholm visited GE Aviation facilities in Cascade Township following the company's announcement that 200 new engineers will be hired to create high-tech electronics for the Commercial Aircraft Corp. of China Ltd., a joint venture with China-based Aviation Industry Corp.

Under the COMAC joint venture, the Cascade Township facility will produce electronic controls for the 150-seat C919 airplane. The C919 is expected to use up to 15 percent less fuel, but one of its biggest advances is expected to be the modular electronics under development.

GE Aviation, which had 2007 revenues of almost $17 billion, has its headquarters in Cincinnati, and employs 39,000 people worldwide. Muskegon and Cascade Township are just two of its 50 locations.

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