Quickie: GE all in on 3D printing

Sep 6, 2016 | Hot Topics

General Electric, the global megacorp that includes aircraft engines in its huge manufacturing portfolio, announced today that it is acquiring two European 3D printing companies for a total of $1.4 billion, making ever more real its vision to supply more complex on-demand engine parts. Assuming shareholders and regulators agree, GE is buying Swedish company Arcam and German company SLM Solutions, which make 3D printers that can print metal parts to the exacting tolerances and material strengths needed in aerospace engines. GE said that Arcam and SLM Solutions each reported around $70 million in revenue in 2015, so these deals will inch GE towards its goal of reaching $1 billion from additively manufactured parts by 2020. You may recall that GE started printing fuel nozzles for jet engines a couple of years ago because the nozzles were too complex for traditional subtractive manufacturing methods, but it’s not clear how much revenue that business generates today — I would guess nowhere near $1 billion.

Perhaps as important for GE, the Wall Street Journal say that these acquisitions “are expected to help GE realize $3 billion to $5 billion in efficiency gains across the company over the next 10 years”. That’s big — and related to inventory carrying costs being offset by just-in-time manufacturing, premium pricing for critical parts and other gains related to the immediacy and accuracy of 3D printed replacement parts, and savings from the reduction in scrap material produced from subtractive methods.

Finally, GE Aviation isn’t the only part of GE that stands to participate in the additive revolution. The LEAP engine nozzle is probably the most widely known product promoted because of 3D printing; parts designed by GE’s Power, Oil & Gas and Healthcare units, as well as GE’s services businesses are also being additively printed.

I hadn’t heard of either Arcam or SLM before today. The WSJ article says that the companies have complementary technologies, with Arcam having invented an electron beam melting machine used in the aerospace and orthopedic implant industry while SLM’s uses lasers.

It’s a good day to be a 3D printer developer if buyers are willing to pay something like 10x revenue.