GE Aerospace Buys Its Way Into a Critical Manufacturing Bottleneck

GE Aerospace’s $11.75 billion acquisition of Consolidated Precision Products is a reminder that one of aerospace’s biggest challenges is no longer selling engines. It is building enough of them.

The company is buying CPP, a major producer of highly engineered castings an apt addition as demand rises simultaneously across commercial aviation, aftermarket services and defence. The deal, expected to close over the next few months gives GE greater control over a manufacturing capability that has become increasingly difficult to scale. 

Jet-engine makers are facing persistent supply-chain constraints, and precision castings have emerged as one of the industry’s critical pressure points. These components are complex, difficult to manufacture and supported by a relatively limited pool of specialised capacity. GE has been a CPP customer for more than 15 years. Now, it wants that capability inside the company. 

The strategy is also about speed. GE expects demand for airfoils across its commercial, aftermarket and defence businesses to grow by more than 30% by 2030. Bringing CPP closer to its engineering and manufacturing operations could help the company increase output while tightening the link between component design and production. With manufacturing capacity is becoming strategic again a closer tightly held supply chain is an important advantage.

Unlike some business models that prefer asset-light supply chains, when it comes to critical supplies that can become a bottleneck, outsourcing becomes less reliable and efficient. GE looks to solve for this by taking control with this intended acquisition.