When Riccardo Procacci says it has been “an eventful year”, the Avio Aero boss knows of what he speaks.The Italy-based maker of jet engine components is just a couple weeks shy of its first year inside the GE Aviation business, which bought it on 1 August 2013 for $4.3 billion from private equity investor Cinven.
But while any acquisition is inevitably followed by sometimes-wrenching adjustments to company culture, management, staffing and systems, Avio faced an extreme challenge – its new owners are the main competitor to just about all of its customers. Procacci, himself a long-time GE man from the oil and gas and turbomachinery units, described the first year’s integration challenge as one of creating “an evolved identity for Avio Aero”.
By that he means ensuring that by coming under the wing of a company to which it has been a major supplier for 30 years, Avio can also remain a partner to the entire aviation industry. Much work, he says, has gone into “reaffirming that our mission hasn’t dramatically changed”.
Customers were sceptical and there has been some tension, but Avio’s backlog for “external customers” is growing and, indeed, no orders were cancelled during a period of “rebuilding trust”.
Moreover, he says, the process of building firewalls between Avio’s clients and GE Aviation “has not been a burden for us. It is a way of showing our commitment”.
But the company has also used the past year to refocus its product line, around transmissions, low-pressure turbines, sand casting and additive manufacturing and – critically – services, which he sees as a renewed focus for Avio and a real benefit of coming into the GE culture: “There is no great product without a great service that goes along.”
Procacci’s objective is, naturally, to grow the business. While there is much “growth with GE” to be had given the parent company’s strong position in this long-running aerospace upswing, there are also new opportunities within GE to develop new technologies for better performance.
Avio is also planning to return to the helicopter transmissions business – expect some customer announcements in the coming weeks, says Procacci – and, working with GE Marine, there are growth opportunities in naval propulsion.
But ultimately the priority challenges over the coming year or so are three, he says: “One, execution. Two, execution. Three, execution!”