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Volvo Aero and General Electric expand cooperation in gas turbine area

Volvo Aero and General Electric (GE) have signed an agreement whereby Volvo Aero will increase its stake in the LM2500 industrial gas turbine. As a result, Volvo Aero’s sales are expected to rise by about SEK 35 M annually.
Volvo Aero and General Electric (GE) have signed an agreement whereby Volvo Aero will increase its stake in the LM2500 industrial gas turbine. As a result, Volvo Aero’s sales are expected to rise by about SEK 35 M annually.

Volvo Aero has been a risk-sharing partner in LM2500, a gas turbine primarily intended for industrial and marine applications, since 1997. LM2500 program was launched in the 1970’s and since then more than 2,000 gas turbines have been delivered. Since Volvo Aero entered the program in 1997 volumes have been up to 100 units per year and are expected to continue at current levels.

Volvo Aero has been producing the 3-9 spool for the high-pressure compressor in the LM 2500 for a number of years. The additional contract applies to compressor discs, stage 1 and 2, for the same gas turbine. The agreement will not lead to any new jobs but will make a contribution toward safeguarding employment at the company, over the short and long term.
The agreement with GE means an investment of approximately SEK 65 M for Volvo Aero. The two companies have cooperated extensively over the years in projects ranging from military aircraft engines to components for gas turbines for commercial and industrial/marine applications.

The LM2500 was originally a derivative of the CF6-6 aircraft engine, but has benefited from continuous aircraft engine and industrial gas turbine technology infusion for the past 30 years. As recently as December 2003, GE presented the large LMS100 gas turbine, with an output of more than 100 MW. Volvo Aero agreed to go in as a risk-sharing partner. This transaction is expected to generate sales of at least SEK 7 billion for Volvo Aero.

April 8, 2004

For further information, please contact Rolf Stoor, Director, Business Development, Volvo Aero, +46 520 94636