Pratt And Whitney Surges U.S. Hiring As Bet On Geared Turbofan Pays Off
The aircraft engine unit of United Technologies is hiring thousands of manufacturing employees in the U.S. as its breakthrough Geared Turbofan technology transforms the global aircraft propulsion market. Pratt & Whitney has brought on 4,500 new employees over the last 18 months at plants in Connecticut, Florida, Georgia, Michigan, New York, Pennsylvania and elsewhere, and says the number of new hires will rise to 25,000 by 2025.
Part of this surge is due to increased demand for high-performance turbofan engines on the tri-service F-35 fighter. Production of that aircraft’s engines doubled over the last two years, and will double again by 2020 (to 170 units) as more and more allies buy the stealthy fighter. Pratt engines also will power the Air Force’s next-generation bombers and tankers. But the biggest driver of Pratt’s hiring spree is the Geared Turbofan (GTF) engine for civil aircraft, which is estimated to have a lifetime revenue value to the company of $500 billion.
It took Pratt & Whitney 20 years and $10 billion to perfect GTF technology, but now the company enjoys a performance advantage over rivals General Electric and Rolls Royce that will likely make it the dominant global provider of jet engines through mid-century. The basic idea behind the GTF design is to introduce 3:1 reduction gears on the shaft between the fan at the front of the engine and rotating elements (compressors and turbines) in the rear so that each component turns at optimum speed.
The result is a 16% gain in fuel efficiency, 50% reduction in carbon emissions, and 75% decrease in noise. And that’s just the beginning: further refinements to the technology will likely reduce fuel consumption more than 20% compared with conventional turbofans, enabling airlines to slash spending on fuel, fly longer routes, or carry more passengers.
Decreased emissions will minimize the impact of civil aircraft on local air pollution and global climate patterns. The noise reduction associated with using GTF engines is go significant that half a million fewer people will hear planes taking off from New York’s La Guardia Airport. Pratt is a contributor to my think tank, so I have been following the company’s progress in developing GTF technology for a long time.
Pratt’s rivals have begun researching their own geared engine technology. But with Pratt holding numerous patents and enjoying a multi-decade head start, it will likely be first among equals for a long time in the propulsion business. It already has an order backlog of over 8,000 GTF engines, and is investing heavily in plant and equipment to strengthen its lead. The company has spent $451 million upgrading its Columbus, Georgia plant, and its facility in North Berwick, Maine was recently designated a “best plant” by Industry Week.
The increased domestic hiring and investment driven by GTF is just one facet of a broader makeover in Pratt & Whitney’s operations as the unit strives to stay at the forefront of engine development and manufacturing. The last time there was a big ramp-up in engine production, Pratt made most of its engine parts in-house. Now it produces only the most challenging components internally, while buying about 80% of parts from a carefully monitored supply chain of small and medium-size companies.
In other words, most of the manufacturing workers who contribute to Geared Turbofan production will likely not be United Technologies employees, but rather employees of smaller concerns scattered across the U.S. — especially the industrial Midwest. Roughly four-fifths of Pratt’s supply-chain spend currently goes to domestic manufacturers, an amount that will balloon from $600 million annually at present to well over a billion dollars per year in the near future.
Pratt employs hundreds of specialists who monitor performance at these suppliers to assure timely delivery of parts machined to exacting tolerances. The company spends heavily on new technology, both within its own plants and at the facilities of suppliers. However, Pratt management recognizes the limitations of robotics, additive manufacturing, and other innovations. Much of its investment in the Geared Turbofan goes to training skilled workers, and company president Robert Leduc recently expressed doubt it would ever automate its assembly line.
In other words, Pratt & Whitney’s success as a domestic manufacturer headquartered in one of the nation’s highest-cost states rests on the twin pillars of technology and training. Without the right tools, workers can’t stay ahead of emerging competitors around the world. But without skilled and experienced workers, the technology can’t be applied to optimum effect. So one facet of Pratt’s cultural makeover has been greater empowerment of employees, a shift that presumably helps explain why workforce attrition has fallen to a mere 2% annually.
With nearly 17,000 U.S. employees of Pratt already engaged — and many thousands more in the supply chain — the Geared Turbofan engine is shaping up to be a major success for American manufacturing. It is a success that can be repeated many times over if Washington continues investing in cutting-edge research while minimizing regulations that impede bringing innovations to market.
Pratt & Whitney traces its origins to 1860, when partners from a Connecticut iron works found success producing parts that would go into the guns used by Union soldiers in the Civil War. In 1925, the company was reborn as a maker of aircraft engines. Its survival across the political and economic upheavals of the intervening years was due mainly to the foresight, discipline and skill of its employees. But the record shows that it was more likely to thrive when government was sympathetic to the needs of business, and that dynamic persists today.