PDF Publication Title:
Text from PDF Page: 024
Though this example seems like a textbook case of the effects of short-term horizons, there is evi- dence that longer-term, “high-road” strategies are also being employed in the industry to boost prof- its in sustainable ways. Pratt & Whitney’s successes with “lean” production principles, documented by Womack and Jones, has had the effect of freeing up cash flow by reducing inventories and work in progress while improving quality and productivity. Yet the million-dollar question, as Roach points out, is “What happens to this cash flow?” The an- swer is critical for firms, for their shareholders, and for other stakeholders, workers, and communities in the United States and in New England. Are these resources being reinvested in the business, directed toward acquisitions, or distributed in the form of dividends and stock repurchases? TRENDS IN USE OF CASH FLOW A glance at what GE and Pratt & Whitney have done with their profits recently indicates two pri- mary trends—acquisitions and distributions to stockholders—neither of which appears to bode very well for employment prospects for New England’s aircraft engine workers. New capital expenditures are failing to keep pace with profit growth. Rather, acquisitions and distributions to stockholders seem to be the favored use of cash flow between the two leaders in the industry. As part of an effort to pump up profit margins, GE and, more and more, Pratt & Whitney have sought to increase their presence in the aftermarket segment of the business. After- market activities such as repair, maintenance, and leasing services contribute to the high margins of the engine manufacturers because of their particularly lucrative na- ture. Essentially, the manufactur- er makes money twice, first on the sale of spare parts and then on the servicing activities. GE’s ex- penditures on acquisitions and in- vestments in the overhaul and maintenance business in recent years have dwarfed those of its rivals, amounting to $9.5 billion since 1995. Such investments are part of a broader corporation-wide strategy to become more involved in servicing all kinds of equipment with the GE name, from medical di- agnostic imaging machinery to power generation equipment. GE engine services aftermarket activ- ities (which include leasing activities carried out under the GE capital umbrella) are a $45 billion business, with half of this representing repair and overhaul operations.41 Likewise, at United Tech- nologies, Pratt & Whitney’s parent company, growth through acquisition reached $1.241 bil- lion in 1998. The company acquired two over- haul and repair businesses in 1997 and 1998 and set up a new overhaul and repair joint venture in Singapore. Such acquisitions are certainly growth strategies, but unfortunately are not geographi- cally targeted investments that might spell a re- versal in the continuing downward employment trend for the industry in New England. The second trend is perhaps even less encourag- ing. In the name of maximizing shareholder value, both GE and Pratt & Whitney, like many large U.S. corporations, have made setting high dividends and repurchasing shares high corporate priorities. Such an emphasis appears to be part of what is driving the push into high-margin after- Cash Flows at General Electric and United Technologies: Trends in Cash Flows and Their Uses (millions of dollars) Company/ Year General Electric 1994 1995 1996 1997 United Technologies 1994 1995 1996 1997 1998 6,100 6,100 9,100 9,300 1,357 2,044 2,079 2,090 2,509 1,700 1,800 2,400 2,200 759 780 770 819 866 n/a n/a 1,100 1,400 125 204 317 584 1,241 2,500 2,800 3,100 2,200 238 252 265 291 316 1,100 3,100 3,300 3,500 270 221 459 849 650 18 UMass Donahue Institute Net Cash Flows from Operating Activities Capital Expenditures Share Acquistions Dividends RepurchasesPDF Image | JET ENGINE MANUFACTURING IN NEW ENGLAND
PDF Search Title:
JET ENGINE MANUFACTURING IN NEW ENGLANDOriginal File Name Searched:
jetengine01.pdfDIY PDF Search: Google It | Yahoo | Bing
NFT (Non Fungible Token): Buy our tech, design, development or system NFT and become part of our tech NFT network... More Info
IT XR Project Redstone NFT Available for Sale: NFT for high tech turbine design with one part 3D printed counter-rotating energy turbine. Be part of the future with this NFT. Can be bought and sold but only one design NFT exists. Royalties go to the developer (Infinity) to keep enhancing design and applications... More Info
Infinity Turbine IT XR Project Redstone Design: NFT for sale... NFT for high tech turbine design with one part 3D printed counter-rotating energy turbine. Includes all rights to this turbine design, including license for Fluid Handling Block I and II for the turbine assembly and housing. The NFT includes the blueprints (cad/cam), revenue streams, and all future development of the IT XR Project Redstone... More Info
Infinity Turbine ROT Radial Outflow Turbine 24 Design and Worldwide Rights: NFT for sale... NFT for the ROT 24 energy turbine. Be part of the future with this NFT. This design can be bought and sold but only one design NFT exists. You may manufacture the unit, or get the revenues from its sale from Infinity Turbine. Royalties go to the developer (Infinity) to keep enhancing design and applications... More Info
Infinity Supercritical CO2 10 Liter Extractor Design and Worldwide Rights: The Infinity Supercritical 10L CO2 extractor is for botanical oil extraction, which is rich in terpenes and can produce shelf ready full spectrum oil. With over 5 years of development, this industry leader mature extractor machine has been sold since 2015 and is part of many profitable businesses. The process can also be used for electrowinning, e-waste recycling, and lithium battery recycling, gold mining electronic wastes, precious metals. CO2 can also be used in a reverse fuel cell with nafion to make a gas-to-liquids fuel, such as methanol, ethanol and butanol or ethylene. Supercritical CO2 has also been used for treating nafion to make it more effective catalyst. This NFT is for the purchase of worldwide rights which includes the design. More Info
NFT (Non Fungible Token): Buy our tech, design, development or system NFT and become part of our tech NFT network... More Info
Infinity Turbine Products: Special for this month, any plans are $10,000 for complete Cad/Cam blueprints. License is for one build. Try before you buy a production license. May pay by Bitcoin or other Crypto. Products Page... More Info
CONTACT TEL: 608-238-6001 Email: greg@infinityturbine.com (Standard Web Page)