GE Venture Will Share Jet Technology With China

vbraga writes "This week, during the visit of Chinese president Hu Jintao to the United States, GE plans to sign a joint-venture agreement in commercial aviation that shows the tricky risk-and-reward calculations American corporations must increasingly make in their pursuit of lucrative markets in China. GE, in partnership with a state-owned Chinese company, will be sharing its most sophisticated airplane electronics (NYT reg. required, reg.-free alternative here), including some of the same technology used in Boeing's new state-of-the-art 787 Dreamliner."

Comments

Repeating history

[magarity]

Those who do not learn history are doomed to repeat it... see: software piracy, high speed trains, stealth fighters, aircraft carriers. Up next: commercial aircraft!

Re:Repeating history

[DeadManCoding]

Here's the thing: China has become very well known for making deals to get modern and/or cutting edge technology without having to do the R&D. That is a boon for American companies for short term profits. It also significantly ups the ante for competition within the Chinese market.
The problem that I see for China is that without having to do the R&D, they get the current tech, understand it, maybe make some improvements to that tech. However, I'm not sure if China has the capability to keep up with other global companies, companies that are investing for future technologies. If China doesn't steal those plans, they'll start to fall behind again, which creates a nice purchasing loop for those global companies.
Those Chinese companies may be able to make and improve these commercial airliners, making them cheaper than anyone else, but they won't have the drop on the next new thing, which most global companies are looking for and are investing in.

Re:Repeating history

[soundhack]

While I would agree with your assessment in the short term, China is pushing out huge numbers of engineers, PhDs and otherwise. Granted there is some question as to how competent these graduates are compared to Western counterparts, but as with anything they do, they are incrementally improving.

Pretty soon, they will have enough of a research and development base home grown that I don't think developing cutting edge technology would be that much of a problem.

Re:Repeating history

[alchemist68]

This IS SO WRONG! GE must be filled with corporate hungry capitalists willing to sacrifice the well-being and safety of the United States of America! I hope some American politicians wake-up and have the balls to challenge this corporate giant. Idiots - they never learn from others' experience - they must experience for themselves at OUR expense. Where is the USA government protecting the people and interests of our country and the TAX PAYER?

Re:Repeating history

[Anthony Mouse]

The problem that I see for China is that without having to do the R&D, they get the current tech, understand it, maybe make some improvements to that tech. However, I'm not sure if China has the capability to keep up with other global companies, companies that are investing for future technologies. If China doesn't steal those plans, they'll start to fall behind again, which creates a nice purchasing loop for those global companies.

You're assuming US companies will still have any revenue with which to fund R&D. We're not talking about microprocessors here -- the technology doesn't change that fast. The 747 is from 1969. That's the year we first landed on the moon. If China starts selling five year old technology for half price, five years worth of aircraft "innovation" isn't going to make up for the price difference.

Re:Repeating history

[timeOday]

China has become very well known for making deals to get modern and/or cutting edge technology without having to do the R&D. That is a boon for American companies for short term profits.

Except China is doing R&D, and the agreement isn't short-term:

"a person involved in the talks said the 50-50 venture is for 50 years. G.E., the person said, is putting in technology and start-up capital of $200 million. Avic will initially contribute $700 million, the person said, including the cost of a new research and development lab already under construction."

Re:Repeating history

[Grishnakh]

Wrong. Short-sighted, yes, but irresponsible, absolutely not. Western companies giving away their secrets to Chinese companies are doing exactly the right thing, because this brings them short-term profit, which is what their shareholders want, and exactly what they're paying their CEOs for. The CEOs are doing exactly what their shareholders want them to.

The shareholders want the CEOs to do anything they can to increase the stock price in the short term, so that they can sell their stock at a profit. After that, they aren't shareholders any more, and don't care what happens to the company. The way American corporations are set up, and the way their stocks are trade with such frequency, long-term strategic moves just aren't in their interest.

Re:Repeating history

[Grishnakh]

Those Chinese companies may be able to make and improve these commercial airliners, making them cheaper than anyone else, but they won't have the drop on the next new thing, which most global companies are looking for and are investing in.

Next new thing? What's that going to be? Hypersonic aircraft or teleporters or something? Be realistic: there IS no next new thing, not for 50-100 years at least. Commercial jet airliners have been with us since the 50s now, and haven't changed significantly in that time. The only things that have changed are 1) engines are a little more efficient and quieter, but not by orders of magnitude, 2) planes are flown slower now to save fuel and keep prices low, 3) seats are packed together so that only toddlers are comfortable in them, and 4) "air rage" is now common whereas it never happened back then.

There's been some other minor improvements of course: much better avionics (which isn't something that GE does to my knowledge), electronic engine controls (which GE does do), etc.

But the idea that Americans or other Westerners are going to come up with huge new advances to always stay ahead of the Chinese is simply ridiculous. For instance, look at the article subject: this is about GE, which doesn't make planes, but jet engines and associated controls. Jet engines haven't changed much in 50 years, just small steady improvements. Most of the advances in jet turbines were in their early days, not any time recently; they're a mature technology, and current advances are only eking out fractions of a percent in improvement, much like automobile engines.

GE is basically giving away their secrets here, and pretty soon there won't be a reason to buy a GE jet engine, because you'll be able to get one just like it made in China for less.

What's worse, China's society heavily values science and engineers. America's does not. Very few people go into engineering any more, except for software engineering. When was the last time you met an aerospace engineer? Way back in the early 90s when I was in college, we joked that AEs would never find a job, because it was a pretty dead industry. Very few engineering majors went into the AE school. ME (which a lot of jet engine engineers probably have) is a little better, but still not great. Go into any major engineering school, and look at the students: most of them are Chinese and Indian, and these days, they go back to their home country when they finish their degree.

America's days as a technology power (except maybe for web development) are almost over.

Re:Repeating history

[Grishnakh]

This has nothing to do with the US people, government, or taxpayers. GE is a private company; "publicly-owned", but it's owned by its shareholders. The shareholders are the only people it answers to. The shareholders WANT them to do deals like this, because this gives them bigger profits, and pushes up their stock price. That's what shareholders want. They don't care about long-term issues, because they'll sell off the stock when it peaks and let someone else worry about that.

If you think the government should step in and manage these corporations in a way that benefits the country, instead of the shareholders, then why not just transfer ownership of the company to the government? After all, we have a successful example of a society like this: it was called the Soviet Union. All corporations were owned and managed by the central government. As an American, are you advocating that system?

Re:Repeating history

[TubeSteak]

We're not talking about microprocessors here -- the technology doesn't change that fast. The 747 is from 1969. That's the year we first landed on the moon.

Ummm.... RTFS again.
"Boeing's new state-of-the-art 787 Dreamliner"

G.E.'s new joint venture in Shanghai will focus on avionics -- the electronics for communications, navigation, cockpit displays and controls. G.E. will be contributing its leading-edge avionics technology -- a high-performance core computer system that operates as the avionics brain of Boeing's new 787 Dreamliner.

P.S. The 747 has had numerous refreshes of its cockpit avionics over the last 41 years.
2010: http://www.airliners.net/photo/Delta-Air-Lines/Boeing-747-451/1843286/L/

Re:Repeating history

[frosty_tsm]

Not all investment is in stock price. GE, like most established companies, pays dividends. Their investors purchased their stock years or decades ago and are enjoying a small but reliable payment every 3 months.

In this case, stock price is part of the equation, but is not the entire picture.

Re:Repeating history

[c0lo]

Those who do not learn history are doomed to repeat it... see: software piracy, high speed trains, stealth fighters, aircraft carriers. Up next: commercial aircraft!

But... but... they are indeed learning!!
Like: why spend so much in guarding your secrets, that's a huge cost. Isn't it much better to offer them secrets in return for... something... I don't know... money? Afterall, China has enough of US bonds, getting some of them back means something?

Seriously guys: letting aside movies, music and MS Windows (in which China doesn't seem to be interested), what else have US of A to export?

Re:Repeating history

[timeOday]

There's been some other minor improvements of course: much better avionics (which isn't something that GE does to my knowledge), electronic engine controls (which GE does do), etc.

Actually it is about avionics:

G.E.'s new joint venture in Shanghai will focus on avionics -- the electronics for communications, navigation, cockpit displays and controls. G.E. will be contributing its leading-edge avionics technology -- a high-performance core computer system that operates as the avionics brain of Boeing's new 787 Dreamliner.

Re:Repeating history

[tyrione]

Those Chinese companies may be able to make and improve these commercial airliners, making them cheaper than anyone else, but they won't have the drop on the next new thing, which most global companies are looking for and are investing in.

Next new thing? What's that going to be? Hypersonic aircraft or teleporters or something? Be realistic: there IS no next new thing, not for 50-100 years at least. Commercial jet airliners have been with us since the 50s now, and haven't changed significantly in that time. The only things that have changed are 1) engines are a little more efficient and quieter, but not by orders of magnitude, 2) planes are flown slower now to save fuel and keep prices low, 3) seats are packed together so that only toddlers are comfortable in them, and 4) "air rage" is now common whereas it never happened back then.

There's been some other minor improvements of course: much better avionics (which isn't something that GE does to my knowledge), electronic engine controls (which GE does do), etc.

But the idea that Americans or other Westerners are going to come up with huge new advances to always stay ahead of the Chinese is simply ridiculous. For instance, look at the article subject: this is about GE, which doesn't make planes, but jet engines and associated controls. Jet engines haven't changed much in 50 years, just small steady improvements. Most of the advances in jet turbines were in their early days, not any time recently; they're a mature technology, and current advances are only eking out fractions of a percent in improvement, much like automobile engines.

GE is basically giving away their secrets here, and pretty soon there won't be a reason to buy a GE jet engine, because you'll be able to get one just like it made in China for less.

What's worse, China's society heavily values science and engineers. America's does not. Very few people go into engineering any more, except for software engineering. When was the last time you met an aerospace engineer? Way back in the early 90s when I was in college, we joked that AEs would never find a job, because it was a pretty dead industry. Very few engineering majors went into the AE school. ME (which a lot of jet engine engineers probably have) is a little better, but still not great. Go into any major engineering school, and look at the students: most of them are Chinese and Indian, and these days, they go back to their home country when they finish their degree.

America's days as a technology power (except maybe for web development) are almost over.

50-100 years? You're delusional. We have only had commercial Jet Engines for 50 years. What we see in the next 20 years will technologically dwarf what we are seeing today. You think they are selling the Farm to China? Hell no. They are giving crap that has been declassified by the US Government as old technology. You think they get to see that crap w/o the White House and the Department of Defense signing off on it first? Hell No.

Re:Repeating history

[Grishnakh]

Whoops, missed that.

Re:Repeating history

[thePig]

IANAE, but it looks like an issue with the basic concept of stocks. Stocks are a nice way for a small company to get external funding and grow, but once it breaches the small company size and the companies growth decreases in speed, then short term benefits override long term benefits for the share holder.

For smaller companies, the money put in by the investor grows in multiples within few years - so the investor is wary of doing anything that can jeopardize the future of the company - since the profit margins are unattainable through other methods. For bigger companies, the company might grow 20% or so per year - so people who make the decisions (big investors) - has multiple options, and so try to maximize the profit even if messes up the company. Even the company tanks after 5 years of higher profit, they can use the money to put in any other big company giving the same level of profit, and totally they have higher returns overall.

Even dividends I dont think helps much in this case, since it is just percentage of the profit. So, unless a completely new concept comes which can avoid this problem, this issue is going to be there.

Re:Repeating history

[Grishnakh]

I think you're delusional if you think something better than jet airplanes will be around in 20 years for transporting people long distances and between continents quickly.

We're going to be flying jets, just like we do now. They might have nicer avionics, and have better entertainment systems for the passengers, but that's it. Some more advanced countries might have high-speed trains for shorter and medium distances, but trains won't take you across oceans, and even the fastest maglevs aren't fast enough to compete with jets for cross-continent travel (like NY-LA), aside from their insane installation costs.

Don't tell me you saw a program on Discovery about an evacuated undersea tube and you think they'll have those everywhere in 20 years.

Re:Repeating history

[wagnerrp]

Don't tell me you saw a program on Discovery about an evacuated undersea tube and you think they'll have those everywhere in 20 years.

Actually, it was on NBC, and in fact it the first one will open in 2032.

Re:Repeating history

[arivanov]

And your point is?

Russians have licensed to the Chinese the full blueprint of Su-27 (the license is now revoked because of illegal cloning), the Chinese have bought a whole load of them. Despite all that they have failed to clone the engine. As a result the "stealth" jet fighter they have produced may be low radar profile (that is actually the easy bit nowdays), but it is still equipped with third generation engine 20 years behind US, EADS and Russia. As a result it is a piece of stealthy dead meat if it meets either an F-35 or a Sukhoi-PAKFA.

It is a similar story with everything else you mention.

There are a limits to what you can copy without having indigineous high skilled workforce and China has not learned to build one (yet). They pay their engineers so little that they see engineering positions solely as a step towards management or sales. As a result they are guaranteed to copy anything you put there and everything they get their hands on. However it is similarly guaranteed to be a generation behind countries which invest into their engineering and R&D workforce and where engineering and R&D can be a lifetime vocation.

The problem with companies like GE exporting tech to China (or India) is actually not with exporting the tech per se. It is with them looking at the Chinese "cheap engineer" model, considering it to be more cost effective from a purely accounting perspective and copying it.

Re:Repeating history

[tsotha]

Those who do not learn history are doomed to repeat it...

More specifically jet technologies like the WS-10, an engine which is a nut-for-bolt ripoff of the Russian AL-31.

By now Chinese companies are famous for making partnerships with foreign firms and then burning their partners once they think they can get away with it. Whoever made this decision at GE is an idiot.

Re:Repeating history

[91degrees]

Maybe. But maybe China will catch up anyway. They can see the patents, buy an engine and reverse engineer it, or just put a lot of resources into developing the technology themselves. They will catch up eventually. Perhaps this does make it faster, but GE will make some money from this and improve their technology at the same time.

Re:Repeating history

[Anonymous Coward]

Next new thing? What's that going to be? Hypersonic aircraft or teleporters or something? Be realistic: there IS no next new thing, not for 50-100 years at least.

Maybe you missed some of the other stuff that's been on slashdot every now and then. Like the mockups of wildly differently shaped planes (actual production is 15 years off - not because the tech isn't there yet, more because the whole process just takes a long time). Or better understanding of engines and plane shapes that redirect the sonic boom upwards, allowing supersonic planes over land. Or the nifty engine tests done every now and then - like the ramjets, which currently aren't controllable, but another 50-100 years is a long time to figure that out. Or the designs for planes that go much higher and skip off the atmosphere, enabling faster / longer range / more fuel efficient flights.

Also, on a different note: I thought China was still notoriously bad at quality metallurgy? Both at the quality control and the precision. To the point that it's already greatly slowing their ability to copy things (for example, they've been trying to modernize their military for decades, but are still decades away from their goals for many things. Like the tanks and planes and subs). Passenger planes have got to the the one thing that all the buyer coutries are the most picky about, and China doesn't really have a good reputation there. If they got the latest and greatest design *today*, it could take them 15 years to actually make it, and then another 15 years of them not blowing up for other countries to buy them. (Which, itself, requires China's bubble economy to not catastrophically fail for the next 30 years, which kinda of stretches credulity).

Re:Repeating history

[labradore]

Give me a break? You buy this drivel? You just made the case that because our system is set-up to externalize as many costs as possible in favor of short-term profit, it must be OK. So goes the thinking of the rest of the idiots who have driven the economy off a cliff: "It's not illegal, so it must be OK." In the technology world, we have an entire industry dedicated to figuring out the impact of technological change on society and the human implications of that change. It's called Science Fiction. We think about what could happen; what could go wrong; what could go right and we write millions of stories about it. Of course many of these stories are unrealistic, but they're interesting and many have a kernel of truth. It plants seeds in our minds and we start to think about the implications of things like unfettered AI, bioengineering, nuclear arms and the expansion of humanity into new worlds where we are divided by vast chasms of time, space, environment and genetics. I'm not saying that we're somehow more moral or more responsible because Sci Fi exists. However, we have a clue and our awareness is heightened and we aren't completely blind to our own collective destiny. We do what we do because at some level we love it. Maybe the investment bankers and CEOs of the world love what they do too, but since the stakes are so high, the more likely motivating factor is just plain greed. There is no room for self-reflection in avaricious minds.

China is not an evil empire. But it has shown a tendency to systematically suppress the lives of the lower classes in favor of the ruling classes for thousands of years. There's little evidence that this is different today. So many of the values we claim to hold dear are antithetical to their way of life. Read, for instance, stories about Chinese Mothering to see where the individual is repressed to favor some other goal of more immediate and concrete utility. If mothers are forcing their wills relentlessly on their children all over China, what lessons does the Chinese ruling class take to it's job of governing and use of its increasing power? Since most of us aren't in the ruling class, we have a lot to lose if they become the next hegemony.

It's taken a lot of hard, expensive work and lives were lost in developing the technologies that gave us the edge to "win" the cold war. Now we're bartering this long-term advantage for some short-term profits? And you say this is justified? I see this as a sign that we're circling the drain. Our grandparents' generation would recognize this for what it is: Treason.

Re:Repeating history

[Grishnakh]

Give me a break? You buy this drivel?

It's not drivel; I'm just pointing out that there's nothing "irresponsible" about a company selling its crown jewels if it can make a short-term profit, because that's all its owners care about. Maybe you don't like it, but you don't own the company. I don't like it either, but I don't own GE (nor do I hold any stock in it).

You just made the case that because our system is set-up to externalize as many costs as possible in favor of short-term profit, it must be OK.

I never made any moral judgments, I only pointed out that the players in the system are doing exactly what they're supposed to do. If you don't like it, you need to change the system. (Good luck with that; our elected leaders like things the way they are.)

In the technology world, we have an entire industry dedicated to figuring out the impact of technological change on society and the human implications of that change. It's called Science Fiction. We think about what could happen; what could go wrong; what could go right and we write millions of stories about it.

Yes, of course. There's many good stories that I think offer a pretty good glimpse into what our future is like. The movie "Blade Runner" I think shows an accurate view of what cities in America will look like in 20 years, for instance.

Read, for instance, stories about Chinese Mothering [wsj.com] to see where the individual is repressed to favor some other goal of more immediate and concrete utility. If mothers are forcing their wills relentlessly on their children all over China, what lessons does the Chinese ruling class take to it's job of governing and use of its increasing power? Since most of us aren't in the ruling class, we have a lot to lose if they become the next hegemony.

Yes, they're more interested in the good (and success) of society; the happiness of the individual is unimportant. If a few kids get depressed and kill themselves, so what? There's plenty more to replace those. However, it seems to be a successful strategy so far, so we probably better get used to not being top dog any more. I certainly wouldn't want to live that way, but I can't say that their system is a failure.

It's taken a lot of hard, expensive work and lives were lost in developing the technologies that gave us the edge to "win" the cold war. Now we're bartering this long-term advantage for some short-term profits? And you say this is justified?

I never said it was "justified", only "responsible" (to the people who own the company).

I see this as a sign that we're circling the drain. Our grandparents' generation would recognize this for what it is: Treason.

What makes it treason? Giving away important technology? Where do you draw the line? Was it treason when garment manufacturers moved manufacturing operations offshore? Is it treason to buy food produced in other countries? Is it treason to have software developed in India? Exactly what international trade is treason, and what isn't? How do you determine that? Some people seem to think buying a Japanese car is "treason", but buying an American car (made in Hermosillo, Mexico) isn't, even if the Japanese car is made in Mississippi. Do we need to seal the borders and stop all trade in order to not be treasonous? That would kinda suck for anyone needing gasoline, since we can't produce enough for our demand.

I see this as a sign that we're circling the drain.

Of course we're circling the drain, but the causes are many and complex, not just because one company is selling some avionics technology to the Chinese. At many levels, and for many reasons, our society is regressing, and is no longer able to compete with the Chinese.

My advice? Get out while you can.

Re:Repeating history

[TaoPhoenix]

You may not be an E, but I think you're close to the mark. School Jingo sez that stocks are wonderful etc.

There's a new factor going on here that given the same stocks, 40 years ago the slow and steady dividends were "smart". But if we make all of society devalue long term worth of anything, then we encourage abuse of the short term effect.

Re:Repeating history

[TaoPhoenix]

China might own the world by perfecting Last Year's Tech. They can take things like XP and build stuff on it. They can force MS to struggle with the problems of innovation like Vista and even 7, and then when the lifecycle of XP finally draws to a close, they can make a deal for Windows 8 fresh off the shelf, because it's been vetted by 10 years of R&D. Stuff they build on Windows 8 will last for the next ten years while MS once again struggles with their first implementation of Azure Cloud OS.

Re:Repeating history

[Grishnakh]

However.. the GP didn't say that something better than jets will be around in 20 years. He just said that the tech in 20 years is likely to dwarf what we have now. And he's probably right. Look at the history of aviation.

So what? It looks a lot like the history of cars: lots of huge advances in the early years, and then it became mature and little changed.

What's changed with cars in the last 20 years? Very little really. Some engine advances to get somewhat more horsepower while keeping the same fuel economy, airbags have become commonplace and plentiful (first one or two per car, now a dozen it seems), and SUVs got really popular and then faded. Oh, fancy GPS navigation systems have been added. A 1991 model year car isn't really much different from a 2011 car; somewhat lighter, probably about as fast (the newer cars have more HP, but weigh a lot more so they aren't much faster if any), probably better occupant protection in a crash. All minor, incremental improvements except the GPS nav.

Planes are even worse. What was different about aviation in 1991? "Glass cockpits" were probably brand new back then, but that's it. Planes weren't any slower or worse-performing than they are now, and jet engines didn't use significantly more fuel than they do now. The improvements have been very minor and incremental.

In both industries, the biggest changes (glass cockpits, GPS nav, etc.) are due to the massive advances in the computing and software industries, which are new and going through that early stage where there's lots of changes very quickly. But all these do is make it easier for drivers/pilots to operate their vehicles, they don't affect the powerplants or performance much compared to 20 years ago. In fact, these things can easily be bolted into older vehicles. The military does this kind of thing all the time, upgrading the avionics in decades-old airframes.

And despite the fact that SST isn't worthwhile for passenger service, you're very unlikely to be able to sell a DC-8 to an airline today. Why? Because its technology sucks.

The DC-8 came out in 1958, which is 53 years ago, and was last made in 1972, 39 years ago. You're talking about 20 years, not 50.

If you could draw a simple graph representing technological improvement in an industry versus time, it would start out exponentially rising, but quickly decreasing its rate of increase, and at some point bending so that its rate of increase is very slow. Aircraft passed that bend around 4 decades ago. New engine technologies have been researched for decades: ramjets, scramjets, etc. Supersonic passenger planes have been built, and then scrapped, because they're simply not economical. It's very unlikely a major new technology will come along that will let us fly passengers for much less fuel than it takes right now, or at much, much faster speeds than they do now while using the same fuel. I think it's more likely that some other method of transport will come along (high-speed rail) and erode the market for passenger aviation.

Re:Repeating history

[iserlohn]

Contributing to building a research facility is not the same as doing R&D. The R&D he was talking about was already done - over decades of jet engine research. What they are in effect doing is buying that expertise for a measly $700 million.

Re:Repeating history

[tyrione]

I think you're delusional if you think something better than jet airplanes will be around in 20 years for transporting people long distances and between continents quickly.

We're going to be flying jets, just like we do now. They might have nicer avionics, and have better entertainment systems for the passengers, but that's it. Some more advanced countries might have high-speed trains for shorter and medium distances, but trains won't take you across oceans, and even the fastest maglevs aren't fast enough to compete with jets for cross-continent travel (like NY-LA), aside from their insane installation costs.

Don't tell me you saw a program on Discovery about an evacuated undersea tube and you think they'll have those everywhere in 20 years.

As a Mechanical Engineer I can tell you Jet Airplane Engines are very old technologies. We've been refining it for the past 50 years. That's it. If you think in 50-100 years we aren't using localized gravitational electromagnetic drives then you must think Positron Drives won't be seen in 50-100 years. Basic Drag and Lift with a compressed air force to give us a boost to stay in the air is not cutting edge.

Even this basic overview presented 13 years ago should give you a clue: http://physics.fullerton.edu/~jimw/nasa-pap/

Re:Repeating history

[AK Marc]

You either sell the tech to the Chinese, or they buy one and clone it. Selling the tech is more profitable.

From looking at Huawei and Cisco, Cisco should have done a deal because they lost their tech and got nothing from it. At least if Cisco got paid, they'd have gotten some money for their loss of tech.

Re:Repeating history

[Anonymous Coward]

If you truly believe this, you have the opportunity to put your money where your mouth is. Buy put options on GE's stock, immediately after it's risen from the short-term profit of this deal. Then, when the stocks decline in the longer term, exercise those options, and make a tidy profit.

If enough people did this, then the initial spike in the stock price would be erased, and companies wouldn't have an incentive to make short-term-over-long-term decisions. That's the way the market is supposed to work.

Re:Repeating history

[martas]

America's days as a technology power (except maybe for web development) are almost over.

Except for this tiny little thing called AI/robotics that is soon (inevitably) going to change the world, where he US leads by miles. The Japanese and Koreans have awesome hardware, but they ain't doing much in software.

Re:Repeating history

[h4rm0ny]

And then you introduce the issue of competition and the whole thing starts to look like a giant version of the Prisoner's Dilemma. Company X has to agree with China's conditions, else Compay Y will instead. Of course as we all know, the whole thing about prisoner's dillemma is that it falls apart in the long-term. Solidarity brings the best rewards over repeated trials, betrayal in the immediate future. America has done well with it's competitive system of companies, but this fails in the face of a unified outside force that can play them off against each other.

Re:Repeating history

[h4rm0ny]

The GP's point is that if the 747 is still viable today, and it is forty years old (not withstanding minor updates), then even if China can't build on the new technology beyond its current point (which is debatable), then having 2010 technology could keep them a significant player for decades to come.

Re:Repeating history

[minorproblem]

Its not that Americas day as a technology powerhouse is over. Its the wests monopoly on technological advancement that is over. We can't expect to have dibs on all the best technology forever, there are another 4 billion people out there that would like access to our technology also, people just need to adjust to the idea that the world is moving forward and changing and one of those big changes is that eventually technological innovation is shared.

Re:Repeating history

[aliquis]

If you think the government should step in and manage these corporations in a way that benefits the country, instead of the shareholders, then why not just transfer ownership of the company to the government? After all, we have a successful example of a society like this: it was called the Soviet Union. All corporations were owned and managed by the central government. As an American, are you advocating that system?

While I think you are correct and I doubt most Americans would want their companies ran by the government:

Here in Sweden we've had quite a few companies ran by the government, for good and bad. The government the last 4.5 year has sold plenty out and even more earlier when they had the change but anyhow. Personally I can't say all of it (government owned companies) has been bad. For instance railroads and electricity production may have been better that way. They sold out Vin & Sprit, makers of among other things Absolut Vodka. Don't really know if the short term profit from that is worth the long term loss of income from the company.

Anyhow, then we have Norway, where the government manage huge funds buying into companies. So most often not 100% owned by the government I assume but still to some extent.

Re:Repeating history

[knarf]

What's worse, China's society heavily values science and engineers. America's does not. Very few people go into engineering any more, except for software engineering. When was the last time you met an aerospace engineer? Way back in the early 90s when I was in college, we joked that AEs would never find a job, because it was a pretty dead industry. Very few engineering majors went into the AE school. ME (which a lot of jet engine engineers probably have) is a little better, but still not great. Go into any major engineering school, and look at the students: most of them are Chinese and Indian, and these days, they go back to their home country when they finish their degree.

Just like a society supposedly gets the government it asks for it will also reap the benefits - or lack thereof - of their attitude towards those who theorize, invent, design, produce, repair and improve.

Re:Repeating history

[pipingguy]

4) "air rage" is now common whereas it never happened back then.

I've flown at least 20 times in the US and Canada over the past four years and have not seen one incident of "air rage", nor have I heard of any "air rage" incidents from people I know personally who travel often.

Otherwise, I agree with most of what you have to say.

Re:Repeating history

[C0vardeAn0nim0]

China is not an evil empire. But it has shown a tendency to systematically suppress the lives of the lower classes in favor of the ruling classes for thousands of years. There's little evidence that this is different today.

how is this different from other nations exactly ?

Re:Repeating history

[AmiMoJo]

They can't just copy an existing design and manufacture it for half the price. Apart from the difficulty of selling such a product to other countries due to international laws on patents etc. you can't just build an aircraft and fly it. It has to be extensively tested and certified as safe. You have to develop complex documentation and procedures. There is on-going maintenance and you usually buy your engines from someone else which could present problems.

Besides that the actual manufacturing costs are probably not that much lower in China. The labour might be but they are a relatively small part of the overall cost. Materials, assembly facilities and factories, testing and so forth are what really soak up the budget. Maybe you could shave 10% off the final price of an aircraft but when you pay £18,000,000 for an average jet do you really want to take a chance on a new company that doesn't yet have the global network and long standing expertise like Airbus or Boeing does?

Re:Repeating history

[Zorpheus]

Yes but isn't it stupid to pay MORE for GE stocks after they give away their secrets to China?
The stock price is justified by the expectations in future earnings of the company. These expectations might increase if the present profits go up. But if GE is loosing the uniqueness of its knowledge, the expectations for the future should go down. The price-earnings ratio is a measure for the expected sustainablility of the earnings and should go down.

Re:Repeating history

[w_dragon]

Yes, but aircraft manufacturing requires very high quality parts. Even slightly lower quality bolts can cause problems, as with Partnair Flight 394. There's a reason that every important part in an aircraft, from the sheet metal to the tiny screws and rivets, is traced from the point that the metal is forged to the point that it is installed in a commercial aircraft. If you try to use low-quality parts in a plane you will have accidents.

Re:Repeating history

[w_dragon]

The 787 is going to use carbon fiber for the body of the aircraft, replacing the aluminum that has been used basically for the past 50 years. You don't think that's a major change?

Re:Repeating history

[TheDarkMaster]

Money does not have country, flag or language. Oh, and also no respect for human life.

Re:Repeating history

[Yoozer]

High-speed pizza delivery.

Re:Repeating history

[Compaqt]

Well, just their domestic market is going to be huge.

And London might not buy Chinese for a 10% discount, but Bolivia, Indonesia, and Vanuatu might.

Re:Repeating history

[drinkypoo]

Whoever made this decision at GE is an idiot.

That's easy for you to say from where you're sitting because you don't know shit. The Chinese were going to copy someone, this way they get a couple nickels to rub together. They're not going to give them the new shit they're working on, so by the time the Chinese have these rolling off of some assembly line somewhere, there will be some new hot shit. China probably isn't planning to sell a lot of airliners anyway; they want to use them for their own airlines, and just don't want to pay someone else for the planes.

Re:Repeating history

[Dishevel]

What makes it treason? Giving away important technology? Where do you draw the line? Was it treason when garment manufacturers moved manufacturing operations offshore? Is it treason to buy food produced in other countries? Is it treason to have software developed in India? Exactly what international trade is treason, and what isn't? How do you determine that? Some people seem to think buying a Japanese car is "treason", but buying an American car (made in Hermosillo, Mexico) isn't, even if the Japanese car is made in Mississippi. Do we need to seal the borders and stop all trade in order to not be treasonous?

Treasonous trade I would think is fairly simple. Not perfectly simple but still. Trading with an Enemy State that gives them technology that they can turn around and use to drop bombs on the US could be construed as treasonous without stretching much at all.

Re:Repeating history

[grumpyman]

Can't agree more - this is what western democratic capitalistic society gives us. It also gives us fast food, cheap gas, dollar store, cheap electronic gadgets, SUVs and suburbs.

Re:Repeating history

[h4rr4r]

It's not. A 1970 vintage 747 is not viable. It would have the engines replaced, all the cockpit gear, it would practically be a new plane.

Re:Repeating history

[Existential Wombat]

The Chinese will probably get their Dreamliner copy on sale before Boeing!

Re:Repeating history

[Kjella]

Maybe you could shave 10% off the final price of an aircraft but when you pay £18,000,000 for an average jet do you really want to take a chance on a new company that doesn't yet have the global network and long standing expertise like Airbus or Boeing does?

No, but the Chinese will. With the entire domestic market as well as international lines to and from China any planes they build are likely to see considerable flight time whether they get any initial foreign buyers or not.

Re:Repeating history

[spun]

American companies aren't "American" anymore. There is no real link between a large corporation and any nation or people. The rich of any country can and will continue to profit even as their country goes bankrupt. America may be competing with China, but American corporations are not. American corporations are not citizens, they are not our allies, and we have no longer have any interests in common. What is good for American corporations is not what is good for the American people, it is only what is good for the ultra wealthy. American corporations are not competing with China any more or less than they are competing with America.

Re:Repeating history

[rockNme2349]

Of course as we all know, the whole thing about prisoner's dilemma is that it falls apart in the long-term.

Wait, don't you have that backwards? The prisoner dilemma as I understand it is ONLY stable in the long-term. If you only perform one iteration of the prisoners dilemma, then the dominant strategy is to choose the "bad" move. However if you can account for there to be many iterations then the maximum profit is found in both parties performing the "good" move, which is easier for large corporations who only have a few rivals.

Re:Repeating history

[tokul]

engines are a little more efficient and quieter, but not by orders of magnitude,

Change difference is enough to keep older TU-154 planes outside of EU. Older military planes don't have a chance of surviving fights vs 4th or 5th gen fighters.

Re:Repeating history

[Grishnakh]

I was overstating it a little for dramatic effect, just like the bit about seats only being comfortable for toddlers (in reality, 4.5-foot tall people should be comfortable in them too). But you have to admit that it's true that air rage does happen now and then these days, whereas 30-50 years it absolutely never happened.

Re:Repeating history

[Grishnakh]

That just shows that stock buyers aren't very well informed nor making a very good decision in their purchase.

Re:Repeating history

[Grishnakh]

If your job is to make as much money in this quarter as you can, without worrying about subsequent quarters, then short-sighted actions are absolutely responsible.

Re:Repeating history

[radtea]

Where do you draw the line?

I draw the line at people asking "where do you draw the line?"

Re:Repeating history

[BJ_Covert_Action]

What's worse, China's society heavily values science and engineers. America's does not. Very few people go into engineering any more, except for software engineering. When was the last time you met an aerospace engineer? Way back in the early 90s when I was in college, we joked that AEs would never find a job, because it was a pretty dead industry. Very few engineering majors went into the AE school. ME (which a lot of jet engine engineers probably have) is a little better, but still not great. Go into any major engineering school, and look at the students: most of them are Chinese and Indian, and these days, they go back to their home country when they finish their degree. America's days as a technology power (except maybe for web development) are almost over.

What the fuck are you talking about? I will agree with your first two sentences in this chunk of text but the rest is utter rubbish. I happen to be an aerospace engineer. I went to one of the top engineering schools on the West Coast and I graduated only a couple years ago. Since I graduated, enrollment in my major has nearly doubled at the school. The student body is not primarily Chinese and Indian. In fact, in my graduating class, I would say that we had, approximately 15 minority students out of a graduating class of a just over one hundred. It is great that you and your friends used to joke about AE's not being able to find jobs, but it was a false joke. There are an enormous amount of AE jobs in existence in the USA, primarily due to the bloated DOD budget and Congress's ability to get an erection for anything that looks and sounds like it comes from science fiction. Furthermore, the commercial and civil space industry is starting to take off in the U.S., which is not occurring anywhere else save Europe (JAXA, India, China are all state funded). We have companies that are trying to grow and expand from nothing as we speak. That includes the little guys like Interorbital Systems and Armadillo to the medium players like SpaceX and Orbital Sciences. We have some huge megacorps that love to eat up fresh college AE's to staff their cubicle farms with people that can design FAA rated ashtrays and shit like that (Boeing, Northrup, Lockheed).

Dear God, I go to sleep every night happy that I chose the major I did because it seems like the one industry left that the U.S. actually does want to invest money in. This field also employs ME's, CE's, EE's, MATE's, IME's, and fuck only knows what other kind of obscure E's. Right now, becoming an engineer is a fantastic idea because the U.S. actually does have infrastructure (thanks to the development back in the 70's and 80's) and it needs people that can design maintenance fixes and patches for the infrastructure. I realize markets are bleak right now in a lot of fields but your little rant about AE's and ME's being jobless and in short supply is completely retarded. Just go on any job hunting website: Monster, LinkedIn, whatever, and search for jobs in Tech. and Engineering fields. There are plenty to go around.

I don't necessarily disagree with the rest of your post, but declaring that the only engineers left in the U.S. are jobless foreign kids has to be the single stupidest thing I've seen modded up on /. in awhile.

Re:Repeating history

[h4rm0ny]

Fair enough. I don't know much about planes. I was just clarifying what the earlier poster meant to someone who had misunderstood that point. I did begin with "if the 747 is still viable today..." for that reason. I may have sounded like I was putting that point forward myself, but it doesn't matter as I got an informative response. Thanks,
H.

Re:Repeating history

[h4rm0ny]

I disagree. I understand and get your point about American corporations not representing "America" (as viewed by the people generally), but regardless of their transnationalism, they are competing with China, because their Chinese equivalents are not similar transnational entities that regard their parent country as nothing more than a placenta to be discarded. Their Chinese rivals are closely tied to the government and people of that country in a way that American corporations are not. Your pointing out that American corporations do not represent the American people is the essence of my argument - the Chinese ones (sort of) do.

Re:Repeating history

[h4rm0ny]

We are in agreement but have a misunderstanding over terms. I am saying exactly what you're saying: "bad" behaviour is rewarded over one iteration. Over many, "good" behaviour is rewarded. I'm saying that American corporations are behaving as if they were in a game of only one iteration, whilst their Chinese rivals are behaving as if they were in a game of many iterations. As we are obviously in a game of many iterations (unless the world ends this year), the Chinese strategy is better, long term.

Re:Repeating history

[rockNme2349]

Thanks. That was my misunderstanding.

Re:Repeating history

[dila813]

Hey, too them it is just time for the pay off. They were totally on board with what the Democrats wanted for the last 5 years and now they want their reward. GE is pissed that the Cap and Trade bill didn't pass, that killed them. This is a consolation prize of sorts at everyone else's expense. Look for GE to spin off their wind mill mfg .... oh sometime around 2012

Re:Repeating history

[pipingguy]

No, I don't have to admit that, because 30-50 years ago this sort of thing might not have been reported. But a much smaller percentage of the population flew back then also.

As with most things (even more so since the web took hold with the mainstream population, what, 10 years ago?), the first question to be asked is:

Is "IT" ("IT" as an event, not 'Information Technology') _actually_ happening more/more often/getting "worse", or is reporting/willingness to report "IT" more common due to the increased communications possibilities, story ledes and people seeking attention in a 500 channel TV universe?

I do appreciate your point, thanks for the reply.

- Paul

Re:Repeating history

[Grishnakh]

While you have a point about things being reported, I think it's pretty safe to assume that air rage didn't happen much at all back then for several reasons. As you pointed out, a much smaller percentage of the population flew back then. Airline tickets were really expensive, and people actually dressed up when they flew. It just wasn't something that working-class people did; they took the bus instead. So not only were there far fewer passenger-miles per year, the lower classes weren't flying at all.

It is true that we tend to view the past through rose-colored glasses, thinking things were better. For instance, people complain that the newer movies suck, but lots of movies have sucked throughout the history of cinema, we only remember the 5% which were good (and maybe a few bad ones that were so spectacularly bad that they're funny).

But I don't think this is the case with air rage. It's a modern phenomenon, because 1) lots more people are flying much more often, 2) lots of people who couldn't afford to fly are flying now, and 3) flying conditions are much worse and more cramped now, which provokes more reactions from people. Rats are generally well-behaved with each other, but if you stick too many in a cage together, with insufficient space, they start attacking each other. Humans are no different.

Re:Repeating history

[cavebison]

What's really happening is this.

US corporations have been researching alternative energy solutions for transport for ages now. A lot of R&D has gone into it, and we're on the cusp of a new age of environmentally friendly power and transportation.

They have a deal with the US, European and SE Asian (Japan, Taiwan) governments to legislate for the significant reduction in use of the current technologies, down to the refusal of allowing such craft to enter their airports, on the grounds of EU regulations to be adopted world-wide. Must keep those greenhouse gasses down.

China has forked over a lot of US currency and largely can't operate their planes outside of China.

This is one phase in a multi-pronged attack against the Chinese economy, to ward off the possibility of China becoming a regional hegemon with its own advanced, powerful and long-range military ability rivalling that of the US, the result of which would be an incredibly unstable world.

I hope this is the case, as otherwise we're at the stage where capitalism exists for its own sake and nobody else's. Which basically puts China in the superior position into the future, since they are determined to use capitalism on their own terms and resolutely in the interests of China.

Re:Repeating history

[pipingguy]

Perhaps you are right, you make a good case. I'm Canadian, so maybe the flights I typically take are populated with a crowd that is, uh, "less outwardly animated." My apologies in advance if I've offended you in any way...

Re:Repeating history

[Grishnakh]

Did you make this up yourself?

I'm sorry, but if there were some alternative energy solution for transport that had been researched for "ages now", we'd have heard about it by now. At best, the only thing I've heard of (besides high-speed rail, which only competes with aircraft effectively for shorter legs, not for intercontinental flights or really long (NY-LA) ones) is running jet engines on alternative fuels, mainly vegetable-derived ones, which basically means diverting food production to fuel production, and really doesn't change the engines much at all.

One thing the west is NOT good at is keeping secrets like this. That's a downside to having an open society with free speech. OTOH, without the openness and ability to exchange information so easily, revolutionary new stuff wouldn't be developed as quickly.

...otherwise we're at the stage where capitalism exists for its own sake and nobody else's. Which basically puts China in the superior position into the future, since they are determined to use capitalism on their own terms and resolutely in the interests of China.

I think you're absolutely right about this.

Re:Repeating history

[cavebison]

I did make it up, yes. :) It's a story some (may be most) might like to be true, but it's hard to imagine happening even though China seems to be playing similar games. Capitalism is at fault here, since normally the west might stand up to them, but big companies want to trade and big companies buy policy.

Ironically, the US's biggest problem isn't communism, it's capitalism. :o

Re:Repeating history

[Grishnakh]

I think the US's biggest problem is widespread corruption and mismanagement, and politicians who work for entrenched corporations, not the voters.

If we had a well-managed government, they'd be doing strategic things to improve our economy in the long-term in the face of this competition, such as funding important new technologies, especially energy-related ones to get us off our addiction to foreign oil, and also mandating network neutrality and passing legislation to ensure Americans have inexpensive and reliable high-speed internet access. Instead, they pass laws to help their corporate buddies at the expense of the taxpayer, while looking the other way when corporations screw over taxpayers.

Globalization

[JasonFlanders]

Would China owned companies share any of their military technology with us? We are are simultaneously the strongest and most soft-headed country in the history of the world. How come talk of globalization somehow only includes us selling our shiz off?

Re:Globalization

[syousef]

Would China owned companies share any of their military technology with us? We are are simultaneously the strongest and most soft-headed country in the history of the world. How come talk of globalization somehow only includes us selling our shiz off?

Did you expect China to just keep selling you cheap toys and clothing? Eventually an emerging market...emerges.

Re:Globalization

[Musically_ut]

We are are simultaneously the strongest and most soft-headed country in the history of the world.

... and by we you clearly mean the Slashdotters.

Re:Globalization

[Ethanol-fueled]

We still have ITAR to be followed. It's how the State Department plays favorites.

I speak with authority because my employer makes such technology(in the sensors and lasers category) and the stuff we sell to China is reduced-accuracy by law.

Re:Globalization

[c0lo]

Would China owned companies share any of their military technology with us? We are are simultaneously the strongest and most soft-headed country in the history of the world.

What else you have for sale to balance the trade deficit? I mean, what? Music? Movies? MS Windows? What else that China would be interested in buying?

Strongest country? Stop deluding yourself... PR of C doesn't need to invade US of A... if it starts selling only 10% of the US Treasury bonds it owns and in 1 month the USD will be so weak, China will buy the entire US of A on closing-down-sale prices.

How come talk of globalization somehow only includes us selling our shiz off?

Because in a globalize market you live or die by the strength of your economy and not by the strenght of your army?

Re:Globalization

[satuon]

How can we know? They don't have any technology America doesn't have yet. May be they will share, if they have such tech in the future.

Re:Globalization

[drinkypoo]

PR of C doesn't need to invade US of A... if it starts selling only 10% of the US Treasury bonds it owns and in 1 month the USD will be so weak, China will buy the entire US of A on closing-down-sale prices.

The problem with that notion is that so much of the notional wealth of China is just that, notional; it's based directly upon the very debt that you propose China should "settle on". Remember, they know we're printing fictional money and sending it to them, and they don't care, because what happens to China in economic collapse? Better than what happens to the rest of the world. China can feed itself, unlike most nations out there. (People don't starve in China because there's not enough food any more than that's why people starve here.) On the other hand, China is not ready for that to happen, which is why when we start dumping currency, they respond. Some say that the USA is attempting to cause world economic collapse; it's hard to tell what else all this currency dumping is for.

Because in a globalize market you live or die by the strength of your economy and not by the strenght of your army?

In that case it would be insane for China to harm our economy. I don't necessarily agree with your statement, though.

Re:Globalization

[grumpyman]

That's the issue - maybe people didn't realize, in addition to cheap toys and clothing, they're already getting their TV, cell phone, iWhatever from China?

Re:Globalization

[c0lo]

Because in a globalize market you live or die by the strength of your economy and not by the strength of your army?

In that case it would be insane for China to harm our economy. I don't necessarily agree with your statement, though.

Would be insane to harm US economy now. Wanna place a bet for other markets taking US'es place as the preferred one for China - say, in about 2 years? Europe, Russia, even Africa (don't have to do anything more than Google for "China investments Africa").

Re:Globalization

[purpledinoz]

No, because they have very little technology that is of interest to the US. Soon, China will start developing advanced technology on their own, and they will suddenly become sensitive to IP. But don't worry, the US will also steal the technology and force the Chinese to setup factories in the US in order to sell within the US.

Re:Globalization

[tyrione]

They are printing excessive amounts of their own to keep their currency price down. They've done this for over a decade.

Yep

[ShakaUVM]

Yep. This is how the Chinese have been doing their technology transfer without needing to pay billions in R&D themselves.

They go to a company and tell them that they'd like to build some nuclear reactors or high speed trains or something. The deal they make always goes like:
1) We'll buy the first two nuclear plants.
2) The next two you build using our people.
3) The ones thereafter you give us the plans to build, and we'll do it all ourselves, and pay you a royalty.

Now China has the plans to the AP1000, one of the most modern nuclear plants being built today, as well as a trained workforce in building it, all without having to do any of the R&D work themselves, or pay much more than just the cost of a couple plants (which they get to use anyway).

It's a very clever idea, and companies are all falling over themselves to give away their best technologies to China, since they're so eager for short-term profits, they don't realize they're shooting themselves in the foot, long term.

Re:Yep

[countertrolling]

...they don't realize they're shooting themselves in the foot, long term.

There is no long term. They will have cashed in their chips long before any trouble begins, then move to another casino

Re:Yep

[seifried]

Which is what Americans used to say about Japan after WWII (they just imitate stuff, they can't innovate!). The Chinese are moving up the food chain of manufacturing/R+D/etc. as we speak, pretending otherwise may make you feel better, but it won't alter reality.

Re:Yep

[Kalidor]

This would be great if it were true, but somehow I highly doubt it. GE's existing Chinese JVs in other businesses (consumer appliances for example) are making either what they are doing here, or stuff that is ahead of what can be done outside of China if only because of materials access.

Re:Yep

[Anonymous Coward]

They DO realize what they are doing... they just don't give a shit because keeping six houses ( Aspen, Catalina, Hamptons etc.) is mucho expensive! These executives don't care because they'll live in gated communities with a private police force to keep YOU out... once they've sawed off and sold anything of value in this country... it's a system that works well for the 1/2% in central America.

Re:Yep

[99BottlesOfBeerInMyF]

It's a very clever idea, and companies are all falling over themselves to give away their best technologies to China, since they're so eager for short-term profits, they don't realize they're shooting themselves in the foot, long term.

It's a very clever idea, and executives are all falling over themselves to give away their corporation's best technologies to China, since they're so eager for short-term profits and the individual profits and advancement, they don't care they're shooting the corporation they work for (but don't give a rat's ass about) in the foot, long term.

It's the mercenary attitude with which employees are treated and the reciprocal mercenary attitude of said employees that is responsible for this type of "short term is all that matters" strategy by multinationals.

Re:Yep

[Jah-Wren Ryel]

It's a very clever idea, and companies are all falling over themselves to give away their best technologies to China, since they're so eager for short-term profits, they don't realize they're shooting themselves in the foot, long term.

On the flipside, if these companies have management that's worth a damn, they will spend that money on R&D for the next generation of stuff. So far, China has been great at copying but pretty sucky at development. I remember very similar characterizations of Japan back in the 70s and 80s. Eventually Japan got good at development too, but by then they had lost the edge of low labor costs. Korea is further along that path than China is (look at LG and recent korean cars for example), but not yet where Japan is.

Re:Yep

[ShakaUVM]

>>One thing you did not take into account is while China takes the plans for the AP1000 or next gen doohickey, GE is forging on with their next idea. China, using this technique, will catch up, but they will always be 1 step behind. No more, no less

Well, the AP1000 is made by CBS (owner of Westinghouse), not GE (owner of NBC).

No matter how you slice it, they're getting a tremendous leg up in technology, and will be able to either continue R&D from a really good starting point, or will be able to just continue making cheap knock-offs of the AP1000, which has a reasonably good design.

Re:Yep

[Weezul]

There is ample evidence that this doesn't really work that way. They learn the underlying theory while working with the technology. Even if they don't push towards the most advanced stuff, they'll still seal up the market, blocking out the company that originally sold them the airplanes.

In the end, the U.S. and E.U. will need to impose tariffs to balance the trade with China, not much choice otherwise.

Re:Yep

[dbIII]

Now China has the plans to the AP1000, one of the most modern nuclear plants being built today

With the greatest possible respect, it's not even the most modern nuclear plant being built in China. It's a Westinghouse dinosaur and little more than a scaled down TMI without the containment that saved the place. The old Chinese stuff is better than that so all they are getting is information on a few components that are better.

Re:Yep

[CrazyDuke]

They are not shooting themselves in the foot. They are shooting future shareholders and their employees in the foot. They are making out like bandits and will bail to the next job once they get exposed for some other ...err... executive decision. ...or, when the ship sinks, whichever comes first.

Re:Yep

[ShakaUVM]

The big three designs right now are the GE ABWR, the Westinghouse AP1000, and the Areva EPR. The AP1000 is a simplified version, but it is a bit of a misnomer to call it a scaled down TMI.

Re:Yep

[Jah-Wren Ryel]

True, but was that a bad thing for Japan?

Of course not.

You get ahead through cheaper labor OR superior technology. Soon, the US will have neither.

Yeah, I think you missed the point. Japan is competitive with the US, but they are not even close to being overwhelmingly superior.
China's no more likely than Japan to get a leg up over the US in technology either.

Re:Yep

[Grishnakh]

Oh please. Next idea? GE makes jet engines, a very mature technology that hasn't changed significantly in decades. So what if GE comes up with an improvement that results in a 0.25% increase in fuel efficiency? 1) The Chinese, after becoming completely familiar with the tech, will make their own improvements, thanks to all the engineers they have (many of whom get their advanced degrees here in the USA). The USA, by contrast, can't get its citizens to go into engineering any more. 2) The Chinese jet engine will cost half as much as the GE one; some tiny improvement won't be worth double the cost.

Re:Yep

[Grishnakh]

Corporations aren't interested in future shareholders or employees, only current shareholders. Those are the people who own the company, and who call the shots. They want short-term profits, so they can sell their stock at a profit and bail out. The CEO is only doing exactly what the company's owners want him to do, his "fiduciary duty".

Re:Yep

[FooAtWFU]

Eh, we'll see how well the culture of conformity and top-down control which plagues China can face off against the disruptive innovation of America's best creative minds. Should be an interesting one.

Re:Yep

[TapeCutter]

Yes, and just as it's possible for the US and Japan to be first world nations, it will also be possible for the US and China to both be first world nations. Prosperity is not a zero-sum game(provided we don't all choke on the industrial waste).

Re:Yep

[zmollusc]

These companies will spend that money on either R&D or bonuses for the top management. It is too early to tell which.

Re:Yep

[dbIII]

You completely forgot pebble bed and what is going on in India, France etc etc. The mainstream US nuclear industry has been doing little more than fleece the taxpayer and slap a coat of green paint on those old designs for a looong time. Ignore the dinosaurs that are way behind even South African technology.

Re:Yep

[AK Marc]

They'll rip off your idea anyway. You have the choice to sell a couple while they are at it or not. Which should you choose?

Re:Yep

[Frangible]

Yes, because nuclear engineering is a growth industry, attracting America's best and most patriotic talent, where fission reactors follow Moore's law. Oh wait. Our nuclear batteries are actually worse than they were in the 70s.

Re:Yep

[argStyopa]

It's the accountants.
Because in their naked (and blind) pursuit of profits, #3 looks to be the most wonderful step of all.
"Look, we can make pure money and do nothing. We don't have to have pesky workers, complicated property ownership, and they've written us a hold-harmless from the liability issues, so we just sit there and watch the cash roll in!"

I watched this process in the early 1990s with (certain food firm with a giggly and squishy mascot hereafter referred to as "P") and it's subsidiary named after a large grass-colored fellow "GG"), one of the major US food brands, after they were purchased by a large British food and beverage conglomerate. They sold off their flour mills to ("the supermarket of the world") (to be operated under contract to P) and were selling off all their canning and food operations to small operators who would then produce GG-labelled product and send a royalty check to P. All P would have to do is occasionally go out and 'inspect' the facility to ensure they were making to GG's quality.

There's a reason a brand develops a reputation - the hard work and dedication of truly generations of committed employees. NOT so that later some whore-in-a-business-suit can come and sell the entire thing out leaving only a shell of a company collecting royalty checks from maquilladora-style companies across the border so they can clothe their product in the former firm's reputation.

In this Chinese case, it's not just themselves and their future that they're selling down the river, it's our national security.

I'm an ardent capitalist, but watching this made me sick to my stomach.

Re:Yep

[Luckyo]

It's worth noting that this is also how USA became a technological superpower - copying and stealing from Europe.

This is in fact the case with most scientific leaders - they jump-start their catch-up with pretty open theft of inventions, and as their own engineers become more and more adept at technology they eventually become inventors who are stolen from themselves.

Re:Yep

[vbraga]

it will also be possible for the US and China to both be first world nations

I don't know if this is really the correct answer. I'm Brazilian and this used to be a question discussed by our economists in the 70s (it's uncommon today, since economical discussion is more based on orthodox knowledge).

Take Celso Furtado O Mito do Desenvolvimento Econômico (The Myth of Economical Development, in English - I don't think there's a translation available):

1) The myth of economic development versus the need natural resources for economic processes: it's a myth to think that economic development, and its benefits, will some day reach everyone in the world if the model of economic development does not change. For instance, there are not sufficient natural resources available for every person in the world if one considers the economic model on which economy was based in the 1970s and is also based currently, i.e. the model where consumerism and individualism are the base for corporate actions. For instance, if every person had money to buy a car, our cities would be completely frozen. The critics on the myths of economic development were based on a report for the Club of Rome, which is summarized in Abstract of The limits to Growth: a report to The Club of Rome;

2) About poverty: in countries that do not have "central" economies (countries that are not the base for giant corporations), at most 10% of population could reach the level of wealth achieved by people in the richest countries. Peripheral economies, which would not create an independent and more complete economy, would continue to be poor countries, with increasing differences between poor and rich people inside this societies;

3) About the World economic superstructure: The world superstructure of capitalist economy (mainly IMF and GATT, which originated WTO (World Trade Organization) would, on the one hand, increase control over the world economy, also increasing freedom for capital's flows and for big corporations' actions, and, on the other hand, would decrease the number of possible options available for governments, mainly for poor country's governments. This is the kind of development that has been taking place for the last 30 years.

(From Wikipedia).

My home country used to grow at China-like rates in the 70s and used the same technology acquisition technique (locally known as "import substitution"). The local regional aircraft company (Embraer) was founded on technology transfer agreements with American and Italian companies. It's now a competitor in the regional aircraft market and may generate unemployment in places like Canada, which is the another competitor.

If a emerging power grows faster than it's internal market (like in all export-driven growth) then it's not a zero-sum game - it can potentially be a negative-sum game. Someone's going to lose jobs and market share so the companies from the emerging market can grow. People doesn't care when it happens in less prestigious economy sectors, like textiles. But it's going to happen not only on this kind of industry but also in high tech too - like software in India, and so on. The freed resources like people and capital can maybe create another kind of industry and do innovation but I don't think something that is bound to happen.

Re:Yep

[TheDarkMaster]

Corporate executives who are able to see the long term? Where did you see that? :)

Re:Yep

[Peeteriz]

China is leading in the production of creative minds - many of them educated in US universities; while US citizen enrollments in engineeering subjects is falling.
Not only US seems to be losing the front position - it seems to be losing the engine with which to move forward.

Re:Yep

[drinkypoo]

So far, China has been great at copying but pretty sucky at development. I remember very similar characterizations of Japan back in the 70s and 80s.

The executives of Japanese auto manufacturers of the 70s and 80s would like to have a word with you, but they're too busy eating sushi off the bodies of expensive whores.

Re:Yep

[drinkypoo]

No matter how you slice it, they're getting a tremendous leg up in technology, and will be able to either continue R&D from a really good starting point,

Uh what? If someone handed you the complete plans to the latest BMW, would you be able to continue BMW's R&D? It doesn't work that way and it never has which is why China is still buying everyone else's technology instead of developing their own. Whatever the reason they are unable to match the technical development even of the USA, which has allowed its education system to atrophy and has always had to hire a significant percentage of its finest scientists and engineers from outside.

Re:Yep

[drinkypoo]

The problem with your assessment is that what we have seen throughout time is that China makes the product not superior but inferior to the original, but churns out four times as many of them for half as much money. In most cases this is a workable solution, save for the secondary effects (pollution, slavery.) This is something to worry about if you're sharing fighter jet technology with them for fear they will spam you (although frankly I think that SAMs beat SPAM in this case) but not an issue with commercial airliners which have to be trusted before they can be sold.

Re:Yep

[nedlohs]

Because Japan doesn't have a culture of conformity or anything like that.

Re:Yep

[Pauldow]

>>

Well, the AP1000 is made by CBS (owner of Westinghouse), not GE (owner of NBC).

Westinghouse Nuclear is now owned by Toshiba. The Westinghouse name has been divided up a bunch of times.

Re:Yep

[grumpyman]

Agree - but I think there's a unspoken sentiment here that we'll eventually be trailing, because we enjoyed our fast food, SUVs, cheap toys too much that we forgot to catch up.

Re:Yep

[Kjella]

It's a very clever idea, and companies are all falling over themselves to give away their best technologies to China, since they're so eager for short-term profits, they don't realize they're shooting themselves in the foot, long term.

Oh, they probably do. But the other possibility is that some major competitor takes the deal, cashes the short term profit and you're just as screwed long term. In any market with strong competition it is unlikely that all will refuse. Like with high speed rail they didn't sign one deal, they signed deals with French, German and Japanese companies. The Chinese aren't stupid, they present it like "The pie is now being cut. Do you want a piece of it or don't you?" and if they experienced a real lockout they could just throw enough rumors out there until someone panics and signs a deal "before anyone else does". There's not really all that many good options here.

Re:Yep

[CrazyDuke]

...whatever helps you sleep at night.

Re:Yep

[Grishnakh]

Hey, I don't think it's a good thing for society either. I'm just calling it like it is. The system is set up this way, and the people running these companies are just doing what the system rewards them for the most. If the Citizens don't like it, they need to change the system, but I don't see that happening any time soon.

Typo in summary

[dbIII]

Boeing's new state-of-the-art 787 Dreamliner

Shouldn't that be late-of-the-art 787 Dreamliner
Also wasn't there a court case a while ago about Boeing getting the results of some industrial espionage into Airbus? Hasn't there been speculation that some of the Boeing problems were due to blind copying without knowing why parts of the most recent Airbus were designed that way? Are the Chinese really getting anything new that they couldn't get from elsewhere anyway?

Re:Typo in summary

[0123456]

Also wasn't there a court case a while ago about Boeing getting the results of some industrial espionage into Airbus? Hasn't there been speculation that some of the Boeing problems were due to blind copying without knowing why parts of the most recent Airbus were designed that way?

Aren't the Dreamliner's problems largely due to the massive use of composites? If so, what would Boeing be learning from Airbus?

Re:Typo in summary

[dbIII]

If so, what would Boeing be learning from Airbus?

Not enough apparently. To make things worse the US taxpayer allegedly footed the bill and provided the people for the industrial espionage. With the Chinese buying the stuff outright we at least know what they've got and that they should get it right. The second part is important because budget airlines will buy the cheapest stuff they can get their hands on and you don't want a Chinese made engine coming through your roof.

Re:Typo in summary

[mister_playboy]

you don't want a Chinese made engine coming through your roof.

Donnie Darko, is that you?

Re:Typo in summary

[dbIII]

I thought of that when I wrote this post. In the movie I seem to remember it coming vertically through his ceiling as if the plane it had been attached to had been standing still. I should have written "through your wall".

Re:Typo in summary

[icebrain]

The composites are actually a fairly minor part of Boeing's current problems. What's biting them much harder is poor program and supplier management. Schedules and milestones were set by marketing, not by engineering, and assumed a best-case, everything-will-work-as-it's-designed-and-all-our-suppliers-will-be-on-time basis. Schedules were ridiculously unrealistic (rollout to delivery in less than a month), and lots of corners got cut to meet deadlines and show "visual progress" on paper (like rolling out an empty shell of an airplane to meet marketing's deadline, but then having to take it all back apart again to put the missing components in). It's like they tossed everything they knew about building airplanes out the window and started with new ideas that weren't held up by the "hide-bound traditions of the past".

The composites are responsible for part of the delay, but system integration, configuration control, and overall poor planning are what's really killing them. It's a classic case of there never being time to do it right, but always time to do it over.

Turnabout?

[jklappenbach]

Perhaps we might start demanding that every Chinese company wanting access to American markets must locate offices here, staff them with US workers, and share their technology in turn. We did that with the Japanese...

Re:Turnabout?

[CodeBuster]

The Chinese will simply sell to European middlemen who will then turn around and sell to us at even higher prices. This won't work. The Japanese dealt with the US because they needed us to defend them against foreign aggressors. Remember that Japan depended upon the United States for defense against military attack, including nuclear attack from either China (who still have scores to settle with the Japanese) or Russia, in the decades following WWII. They were willing to put up with US import quotas and tariffs because they needed us. The Chinese, who neither need nor want US military protection, are not likely to be so accommodating.

Re:Turnabout?

[c0lo]

Perhaps we might start demanding that every Chinese company wanting access to American markets must locate offices here, staff them with US workers, and share their technology in turn.

Yeap. Le'me guess China's answer: are US workers willing to get only USD200 a month? No? Well, will gladly pay them USD3000. (hmm... not that will help them too much after we'll be dumping on the financial marker all the US treasury bonds we own.... actually, might come even cheaper than the chinese workforce).

We did that with the Japanese...

Well, well... did the Japanase also had almost 1 trillion dollars worth of US public debt and had a trade balance in their favor of a quarter of a trillion/year?

Re:Turnabout?

[giorgist]

Yep ... imagine your lifestyle with out chineese goods :-)

This US is simply a junkie to chineese goods, that is why China can demand more and more from you.

Re:Turnabout?

[drinkypoo]

Perhaps we might start demanding that every Chinese company wanting access to American markets must locate offices here, staff them with US workers, and share their technology in turn. We did that with the Japanese...

Perhaps you haven't noticed that the Chinese are having to buy all their technology. What technology are you expecting them to share? New developments in fireworks? Advanced noodles?

Re:Turnabout?

[grumpyman]

I think it's a great idea.

Trading The Crown Jewels... For What?

[cmholm]

This is even more bone-headed a move than Boeing farming out airframe subassemblies. This is one of the few areas where we have a competitive advantage, and they're going to give it away so that they can sell a few more engines. I don't care if the rationale is that Rolls Royce, SNECMA, P&W, or if it's the price for lower labor costs at a PRC plantsite, or whoever will do it if "we" don't.

When a technology firm is selling off their IP, it's obvious that they are out of the business of developing new IP, and are just milking the efforts of their predacessors. What a sad sight.

Re:Trading The Crown Jewels... For What?

[b4dc0d3r]

On the other hand, I'd like an engine at the lowest price. Are you going to sell it to me, or is Boeing? Hmm, guess I'm going with Boing. I'm a poet and I didn't even know it.

Capitalism, it's what's for dinner. Want something else? Go be born to someone else, or embrace a different economic system. Mmm, capitalism. Goes down easy, comes up hard.

Re:Trading The Crown Jewels... For What?

[cmholm]

Re: "Giving up" on the Chinese market... it's like dealing with Walmart: you can either say "no" now and work at adding more value to the product to survive; or, you can sign on the dotted line and watch them suck your margins in-house.

Granted, offsets are a major part of international aerospace. But, offsets to - say - Finland and offsets to China are two all together different birds.

Re:Trading The Crown Jewels... For What?

[Anthony Mouse]

Capitalism, it's what's for dinner. Want something else? Go be born to someone else, or embrace a different economic system. Mmm, capitalism. Goes down easy, comes up hard.

It wouldn't be a problem if it was just capitalism. The problem is that China is a company and a country. There is nobody there to enforce antitrust laws. You like your cheap stuff today, but what happens if they dump cheap goods on the market below cost until everyone else goes bust, and then raise the price once no one is left who knows how to make it?

You can see where this is going...

[Jeremi]

"The Capitalists will sell us the rope with which we will hang them." -- Vladimir Ilyich Lenin

Re:You can see where this is going...

[PPH]

"The Capitalists will sell us the rope with which we will hang them." -- Vladimir Ilyich Lenin

Not if we can smoke it instead.

Re:You can see where this is going...

[DigiShaman]

Lenin might very well be correct. But, when all the capitalists are hung, how will they survive after they are long gone?

They don't. Capitalist create and exploit resources. Under capitalism, the pie of resources grows with the system. Under communism, the system tends to partition the pie without actually growing it. Eventually, it shrinks as it's raped and plundered.

Should the western capitalist system fall, I really hope for China's sake this all part of their bigger plan to re-take the #1 spot in Super Power status. If not, they will be fucked with civil war at worst, and at best a fractured mainland. Their system as it stands doesn't seem very sustainable.

Re:You can see where this is going...

[martin-boundary]

They don't. Capitalist create and exploit resources. Under capitalism, the pie of resources grows with the system.

BWAHAHA.

Seriously, that's funny. Resources grow with the capitalist system? I need some self-growing oil, can I subscribe to your newsletter?

No. Resources don't grow any better under capitalism than under any other system. That's just nonsense designed to confuse people like you who don't understand physics.

Re:You can see where this is going...

[DigiShaman]

Actually, the oil is out there. Lots of of it in fact. Once it gets expensive, coal gasification can be used to produce fuels that we would normally get from crude.

Look, it's all elementary. The resources are out there. If and when we start to run dry on Earth, we will recycle. If that's not enough, will just bring more back from outside our planet. It all comes down to law and the rule of man. While physics plays a very *small* part in this, the primary (if not only) limitation is the type of governance that a nation is governed by.

Re:You can see where this is going...

[nickmalthus]

China is more of a Fascist government than a Communist one these days and this is all very reminiscent of when some American corporations and banking institutions collaborated with the Nazi's to reap huge military buildup profits in a down global back in the 1930's.

Re:You can see where this is going...

[vadim_t]

Physics plays a very fundamental part:

For how much would you buy an apple? You might pay $1. You might pay $1M, if it's the last apple on the planet. But no matter what, you woulnd't pay two apples.

Same way, bringing oil from asteroids will cost a lot more in oil than it will bring. So at some point, oil ceases being an energy source and becomes an energy store perhaps.

Re:You can see where this is going...

[muckracer]

> All their designs are going to be littered with English

I can see it already:

"In case of emerlincy please to push great buffon with vigor for happiness immediately!"

Re:You can see where this is going...

[satuon]

I don't understand why people talk about China as if it's an enemy and as if it's planning to go to war with the US next year. It isn't. First of all, America has nuclear weapons. Does anyone seriously believe China will ever want to go to war with a nuclear power? Why would they want to do that? The motives of the Communist Party are easy to figure out - they want to keep the status quo, so officials can stay in power and have their jobs. If democracy ever came, all the Communist Party officials would be unemployed. They don't stay communists because they believe in Marxism and hope to spread it to the entire globe through war, or they wouldn't be pusing in the direction of a market economy.

Remember, even if China's GDP becomes twice as big as America, this won't make the american nuclear stockpiles magically disappear. So what are people harping about?

Re:Don't Trust the Chinese

[MrEricSir]

I'm sure they say the same thing about us. Just swap "communist" with "capitalist" and "melamine in milk" with "trans fats in french fries."

Amoral business practices are not limited to a single culture or country.

Good deal for China

[DNS-and-BIND]

China is getting a great deal on this. Not only do they get investment, but they get the tooling and most importantly first-hand knowhow to build reliable high-performance jet engines. China has had lots of trouble mastering jet engines. They are very tricky to get right, especially for them to last a long time and not be replaced every 1000 hours. Apparently just because your net.agents stole the plans from poorly-secured GE desktops doesn't mean you actually know how to use the knowledge.

The unnamed state-owned company that GE will be giving money to isn't even identified in the article. This is because state-owned company means that it is an arm of the Chinese government. Americans unfamiliar with the Chinese SOE and searching for an American equivalent merely need think of GM: owned by the government and not so much worried with making profit as keeping workers employed and achieving national political objectives. These SOEs are a major part of the Chinese economy (even though "journalists" like to tell us that China has gone all capitalist now) and doing a JV (joint venture) with them is putting on lipstick and stockings and getting into bed with the government. Whatever happens next, you know you're getting fucked. We are all aware, of course, that under Chinese law JVs are required to be owned 51% by the Chinese partner? And that there is a long list of broken companies in the last ten years that went into JVs and ended up lying by the roadside, lipstick smudged and used condoms hanging out of their asses? Look up Danone vs. Wahaha for a well-known example. GE's slogan, "imagination at work", should serve it well as it goes shopping for lingerie and a nice water-based lube for the pleasure of its new Chinese husband.

Re:Good deal for China

[Anonymous Coward]

You have a disturbing fondness for graphic rape analogies.

Re:Good deal for China

[martas]

s/rape/prostitution/g

Fonterra 2

[Master Moose]

I hope this does not work out like Fonterra’s joint venture to try and get a share of the Dairy industry and China: baby Deaths due to too much melamine in infant formula.

http://www.foodtechnology.co.nz/articles/nov08/articles/melamine.php

I am not sure how this relates to making aeroplanes but to say, there are a lot of dodgy things that seem to go on in china http://www.fonterra.com/wps/wcm/connect/fonterracom/fonterra.com/our+business/news/media+releases/fonterra+believes+hong+kong+claim+has+no+foundation (how much lead paint and Spider hero merchandise adorns the shelves of your local dollar store)

On the other hand, anyone who has flown a few hours with a screaming baby will be happy for a melamine meal.

They'll get all the latest tech

[countertrolling]

All full of worms and backdoors

Re:but, but...

[amiga3D]

You know, these guys are so greedy and so shortsighted, a dangerous combination. I swear they'd sell a mugger the gun to rob them with.

Seems foolish

[Andy Smith]

Sharing militarily-valuable technology with a potential military enemy doesn't seem wise.

Reminds me of Master of Orion

[CrazyJim1]

You could research new technologies, spy for new technologies, or get in a petty war with one other race to share all your technologies with them.

Re:Very stupid...

[Jeremiah Cornelius]

stupid^H^H^H^H^H^H greedy

There goes america's last export

[outsider007]

Planes are about the only thing the US exports anymore. Soon we won't even have that.

Re:There goes america's last export

[Grishnakh]

Wrong. America exports lots of other stuff, such as huge quantities of corn and coal. Oh wait, you were talking about high-value manufactured goods. No, we might as well give up on that stuff. Maybe we could sell our cutting-edge military tech to China? That's about the only thing we have left.

Re:There goes america's last export

[outsider007]

agriculture exports don't count because they're subsidized. Which means we lose money on them.

Re:There goes america's last export

[Frangible]

This *IS* cutting-edge military tech. China's jet engines in their recent stealth fighter are relatively obsolete, old designs. With the technology to make significant improvements in their aerospace designs, it's not just commercial applications that benefit, but military ones as well.

Re:China Rising

[dbIII]

Is China the Beast of Revelations? With it's growing power and weight, one has to ponder...

No, and neither was 13th century Venice when they became more powerful than Constantinople.
China is less powerful now on the world stage than it was a couple of centuries ago so I think you can put Revelations away. China is still recovering from Mao which hit it harder than the Japanese could. China increasing in global influence is expected. The US decline in global influence was because idiots have been in charge for too long. Ignore China, just worry about your own country and don't jump at shadows to turn a good faith into an armageddon cult.

Oooh goody!

[PPH]

Maybe we can sell them those exploding electrical panels.

Re:but, but...

[CrazyDuke]

It's not shortsighted if one expects to bail long before the company smashes into the ground. They aren't making these decisions as some sort of happy-crappy, lets all hold hands and sing along unit. They are doing this for themselves as individuals and no one else, no conspiracy required. In fact, I would imagine a actual conspiracy would just get in the way because of the infighting amongst the individuals for control of the group. As far as they are concerned, we are the morons for caring about things like this and expecting them to act differently because of it.

Re:China Rising

[VortexCortex]

Is China the Beast of Revelations?

Nope, but they'll get to meet him if they don't deliver my next shipment of Cup-O-Abominations before noon tomorrow.

We'll see

[Brett Buck]

Of Obama has any common sense at all, he will get this stopped using ITAR.

Stupid or facing the inevitable?

[perpenso]

I can't believe that GE is this stupid.

stupid^H^H^H^H^H^H greedy

Let me start by saying that I am naturally skeptical of this sort of deal. However let me offer the logic that may be behind this decision ...

Basically GE has competition and believes that if they decline the offer then a competitor may accept it. In this scenario they lose in both the short term and the long term. To prevent the tech transfer GE and its competitors must essentially establish a cartel and coordinate their actions. The problem is that cartels almost always fail, some member almost always cheats. The "cheating" may not even be greed based, one member may be losing in the market and about to fail so it sells off its tech (or itself) to avoid going out of business. The cartel not only has to coordinate to prevent tech transfer but it would also have to coordinate to keep all members at some minimal level of health. So it is highly likely that someone is going to transfer the tech. GE's logic may be that since someone will most likely do it, they might as well be that someone.

Essentially they may believe that the long term is already lost and that the short term is the only potential win.

Personally I agree with the philosophy that decision makers should be thinking long term except when short term survival is in question. However what does one do when the long term options seem to all be bad? Emotionally I want to say that GE is being dumb or greedy but I can't honestly say that this is the case, a lot more info is needed.

Re:Stupid or facing the inevitable?

[Frangible]

There are other ways of preventing the transfer of technology. High-grade encryption and things like generation 3 image intensifier-based night vision devices are subject to export control.

I think it's very easy to see how advanced jet engines, avionics, and control systems fall into "dual use" military and commercial applications. The US has always prevented companies from selling out our best technology, because the US government, like any other government, exists due to long-term investment, not short-term.

And before you mock these regulations for being cold war relics, know that they have kept and created tremendous numbers of American jobs in the engineering and manufacturing sectors.

If China doesn't get AN/PVS-14D night vision monoculars, why should it get advanced aerospace technology?

It wasn't so long ago that selling advanced technology to communists would've gotten you brought in front of Senator Joseph McCarthy. "Fellow traveler" I believe the term was, wasn't it? Selling out American jobs to communists? Oh, snap. I have to admit, it'd be pretty damned amusing to see the GE executives in this case whimpering on the stand as they were convicted of treason. Ah, they just don't make punishments and protect America like they used to.

Re:Stupid or facing the inevitable?

[perpenso]

There are other ways of preventing the transfer of technology. High-grade encryption and things like generation 3 image intensifier-based night vision devices are subject to export control.

That is not a company decision, it is a government decision. So I don't think it applies to whether GE is being short sighted or rational. It also fails to restrain GE's competitors that are not US companies (ex. Rolls Royce). Such regulation may merely guarantee that GE loses in both the long and short term and do nothing to prevent the tech transfer since the tech is not exclusive to the US.

Again, I'm not comfortable with the deal but I'm not sure what a better move for GE would be.

"NYT Reg Required"?

[artor3]

It's a bit off topic, but I don't think NYT requires registration, and I was certainly able to access their article without logging in.

So they have no one to blame but themselves

[Fallen Kell]

So they can't blame anyone but themselves when in 2-5 years from now China stops buying those parts because they have reverse engineered them and make them on their own now and dump you now that they have taken the tech they wanted...

Re:So they have no one to blame but themselves

[TripHammer]

I'm not so sure. GE has a large presence in other technologies in the Chinese market on top of a long history in avionics. Any theft would jeopardize other lines of business and the long standing relationship with GE. Relationships are highly valued in the East.

Open source ...

[giorgist]

Well think of it this way,
all this technology is going open source :-)

Why not, let it be that way. many things are going that way. Music CDs are dying and you can only make money through live performaces.

Simply put China is a huge market, and so they have huge leverage ... and it works. Many countries buy weapons via technology transfers with France, Germany, Russia and the US. It's an old trick

Re:How about the Japanese?

[Grishnakh]

Actually, they were setting the standard, as far back as the 80s and even before: their automotive technology in the 70s was already ahead of the American automakers (check out the history of the Honda CVCC engine).

Unfortunately, they made some serious economy screw-ups in the 90s, and while they're still leading in many areas, they've also moved much of their manufacturing to China, and will probably be eclipsed just like the USA.

Short term gain and

[couchslug]

...long term pain. This is epic stupidity.

The American Empire is dead

[plopez]

This story and the Goldman Sachs story convinces me of that fact. From this time forward all you will see is a few sporadic twitches and spams, but it's over.

Re:Don't Trust the Chinese

[Grishnakh]

B.S.

The melamine thing was by one company, and was punished by the government.

Overall, they absolutely do have morals in business, which is why they're so successful: their moral is to do things that will benefit their country in the long term, without worrying about what benefits their shareholders in the short term. They'd rather spend more money to acquire a technology which will make them the leader in that technology in 20 years, than to work out a deal that costs less in the short term but doesn't give them a giant strategic advantage later.

Maybe that doesn't sound so good because it isn't good for your country or you personally, but they don't care about that. Like anyone else, they're self-interested, except that they do a lot more for their country than Westerners.

Re:Lenin had it figured out.

[epyT-R]

and the communists will build the gallows.....

ideologues of all types always justify taking freedom from everyone else under the guise of defending it.

Re:China Rising

[Grishnakh]

The US decline in global influence was because idiots have been in charge for too long. Ignore China, just worry about your own country and don't jump at shadows to turn a good faith into an armageddon cult.

Worrying about your own country isn't going to improve conditions there, when the leaders are corrupt and the voters absolutely moronic. I think better advice would be to find a good place to bail out to. Get out while the gettin's good, as they used to say.

Re:but, but...

[c0lo]

You know, these guys are so greedy and so shortsighted, a dangerous combination. I swear they'd sell a mugger the gun to rob them with.

No, bad choice of words. The muggers you speak of are, in fact your banker and your retailer selling you goods "on the tab". You may want to think twice before pissing them off.

US of A could not be helped to stop using the rope to hang themselves, even before they started selling the rope to China. With a trade deficit of more than a quarter of a trillion in2010 alone and a public debt to China close to 1 trillion, I don't know how to put it in other words.

Re:How about the Japanese?

[magarity]

People were saying the same things about the Japanese in the 1950,s and 1960's.

Except that Japan is a parliamentary democracy with regular and peaceful ruling party changes. Ask the latest Nobel Peace Prize winner if its just needless hand-wringing to worry about the Chinese authorities getting their hands on yet more latest tech.

oh yes it does: export controls and arms traffic

[r00t]

I'm guessing that GE will be violating the export control laws related to arms control. If not, then we need to adjust the law. We do a piss-poor job of enforcing our laws, but that doesn't mean they don't exist.

I'd toss in a charge of treason as well, and not be wimpy about serving up the punishment that is explicitly mentioned in the US constitution.

Re:This needs to be blocked.

[91degrees]

Just because it took the west 50 years to get somewhere, doesn't mean it would take China the same amount of time. They can get a modern engine and have a good model of what does work. The original designers had to go through a lot of incremental improvements to get one of them.

Re:How about the ...

[TaoPhoenix]

Engine Analogies!

The Japanese went like a regular-gas engine. They ran through the whole improvement cycle faster, let's say within 40 years. But they're reaching their limits.

China is like the electric engine. Much slower to really get rolling, lots of startup bumps. But watch out, once they slam that gearshift into 5th it will be all over.

Re:How about the ...

[Grishnakh]

Are you talking engine performance, or the history of the development of these engines?

If the former, you have it backwards. Electric motors have peak torque from 0rpm, and peter out after that. It's gasoline engines that suck at low speeds and do better at higher speeds (up to a limit of course).

Now for engine development, you'd be right. While electric motors have been around longer than gasoline engines, they've really improved a lot in the last couple of decades thanks to stuff like brushless DC technology, while gasoline engines progressed rapidly in the early 20th century but aren't making much progress at all now (unless they're mated with an electric motor).

Re:Don't Trust the Chinese

[jandersen]

They have no morals in business... because of the Communist mentality that they were brain washed when they were little.

Unlike Enron, Halliburton, ...

The idea that morals are irrelant is a very capitalist and, dare I say it, American one. Isn't is in America that you go to business school to learn that the only thing that matters is shareholder profit? That if you have a clear suspicion that your company's products are harming people's health, you ignore it until a court ruling forces you to do otherwise? And so on - this is not about Communism, mate.

What kind of a business man will put melamine in milk - this is the same type immoral thinking that they have.

The kind of business man that has gone to business school in America. Bear in mind that these businesses have arisen after China have opened up their markets; their managers have gone to mostly American universities to get their MBAs - they have learned their ways from you guys. What you are saying is that people and community should matter more than profit - very, very Communist ideas, if I am any judge.

Re:but, but...

[Frangible]

No need to shortsell -- the government will bail them out. Don't worry.

Re:no shortage of latent asshole imperialist today

[Frangible]

Tell me, exactly which country in the world practices this mythical "fair trade" you speak of? How does it work? Magnets?

Traitors

[elkto]

Some of the technology that GE seems so willing to part with came from US tax dollars under the defense budget. It is not theirs to give.

Japan and China are very different situations. China does not play the same game as anyone else. They are stealing from the Democracies of the world while forcing their population to be subservient to a Socialist/Communist government which holds them back. The Japanese moved from Imperialism to a Representative Democracy.

In short, GE should be held accountable to treason.

Re:How about the Japanese?

[AmiMoJo]

The Chinese, just like the EU and Russia, are going to look at every new aircraft that comes out of the US in detail. Because it has to maintained and pass safety regs most of its secrets are actually wide open anyway. This has always been the case - Boeing admitted that if the British had not done tests on the Comet jet airliner and figured out why the broke up in mid-air their own aircraft would have had the same flaws. This was back in the 50s.

It makes sense to license technology to the Chinese if possible. They will have it anyway soon enough, the only question is do foreign companies that developed it first get a cut? Aircraft stay in production for decades and royalty payments on patents are worth a lot.

PS. Actually Japan has had only one ruling party change in the last 50 years, but that is besides the point. Plus the Japanese put a lot into R&D, you just don't hear about it as much because they localise products for overseas markets. Seriously, how many people think of their Playstation to be a Japanese product? Or their Samsung mobile phone as Korean?

Re:How about the Japanese?

[vbraga]

The Liberal Democratic Party ruled Japan for nearly 54 years from its founding in 1955 until its defeat in the 2009 election, except for an 11-month period from 1993 to 1994.

This doesn't sounds like regular party changes to me.

Re:oh yes it does: export controls and arms traffi

[Compaqt]

>I'd toss in a charge of treason as well

Wha??

The US isn't at war with China.

GE, business school, etc

[jkeelsnc]

Another US company selling off our technology to the Chinese to make a quick buck. And yes, what another user said about business schools is true. I know because I went to one RECENTLY. And the mantra is "Take care of your stockholders and their return before anything else". Even accounting books will tell you that the corporation's primary objective is to earn a profit for the stockholders first and pretty much everything else is secondary. That includes employees and customers. They are important but only in so far as making a profit for the shareholders. I think the answer is that corporations and the government here have long since sold us all off to the far east. The chinese are pretty clever and before long they will be the biggest economy and the largest "superpower" in the world. How do we turn this all around? The people of this country have to take the government back for us. How to do that though when almost all the politicians are corrupt and they to are only interested in a quick buck in their back pockets? I'd like to think it would stop short of armed conflict or revolution.

Size

[Compaqt]

China has the advantage of being much larger than either the US or Japan. They can afford to just throw things on the wall to see what sticks.

An educated population of a half billion (not there yet), with geniuses being 1 in 100k, that's 5000 geniuses to fuel innovation.

Re:Don't Trust the Chinese

[Intrepid imaginaut]

Bear in mind that these businesses have arisen after China have opened up their markets

But China hasn't opened up its markets?

Racism at its most obvious

[Maury Markowitz]

It seems that everyone here is perfectly OK with the Chinese making our salad shooters, but god forbid we get them to build something that's only a decade old.

Considering all the technologies involved are routinely licensed around the world (for instance, to Canada and the UK) and no one says a word, the conclusion is inescapable that this is nothing more than the latest Yellow Peril.

Re:Racism at its most obvious

[gtvr]

Actually, I'm not all that happy with them making our salad shooters. And it has nothing to do with racism, it has to do what is best for my country, and doesn't help a totalitarian state.

security violation

[k6mfw]

It seems to me if I as a commoner were to share jet technology, I would get a quick visit from the FBI... and be charged with many crimes and ITAR violation as well. Alrighty so I haven't RTFA like everyone else, but I don't think I need to, I just have a bad feeling about this. Oh well, that's my Gripe Of The Month.

Alternative explanations

[robi5]

1. Maybe the Chinese already possess the secrets and want to legalize it on moral grounds.

2. Maybe GE is planning to indirectly increase their sales of medical imaging products.

3. Maybe GE actually thought about all pros and cons and came to the conlcusion that the deal is worth it.

4. Maybe China will get richer and buy more of GE's and other Western companies' stuff.

5. Maybe new technology will supercede the current one in five years.

6. Maybe those Chinese planes will be safer with GE tech than without.

where have I heard this before?

[otaku244]

ITS A TRAP!!!!!

Re:Don't Trust the Chinese

[jandersen]

But China hasn't opened up its markets?

Let's consider this; 30 years ago it was very difficult for foreigners to enter China, let alone do business there - now people travel there all the time and big business is happening all the time. How does that not count as "opening up"? OK, so they haven't just opened the floodgates and let everybody from everywhere come and wade all over the place, but that is little different from, say EU or the US, as far as I can see.

Going going gone

[lsatenstein]

Just like the needle trade, the textile trade, the small appliance trade, and essentially all the USA's manufacturing trades, all have become deeply rooted in China, along with the lucrative jobs (lucrative according to China's cost of living). So Americans, Just realize that there will be no long term future or jobs that you could take to retirement, unless you live in China. Even if GE supplies the products from the USA in the sense that the design is American, but the components are foreign, how long will it be before all of the work, from conception to product is gone there too. And I guarantee that hackers will get into GEs computer systems and copy the designs from GE's systems. Short term gain for long term pain.