General Electric Company Announces $50 Million Investment in a High-Volume 3-D Printing Operation in Alabama

Last week, General Electric's (GE -2.38%) aviation division made it official by announcing that it selected Auburn, Alabama, as the location for its new high-volume 3-D printing operation. This facility will be the first of its kind to mass produce 3-D printed components for the jet propulsion industry. More specifically, GE will use the 3-D printing operation at this facility to manufacture fuel nozzles for its new Leap jet engine.

So, yes, investors in 3D Systems (DDD 2.31%) and Arcam (NASDAQOTH: AMAVF), GE's announcement brings us one giant leap (pun intended) closer to learning which company's or companies' printers will be included in the industrial giant's 3-D printing capacity ramp-up. 3D Systems and Arcam are the only two publicly traded companies that manufacture printers that can print in both titanium and inconel, which are the two most widely used metals in the aerospace industry.

Source: GE.

$50 million is earmarked for the 3-D printing operation
While GE's plans to use 3-D printing to produce fuel nozzles for its Leap jet engine have long been known, last week's announcement provided some new information. Importantly, we now have a dollar figure for GE's initial investment in 3-D printing at this 300,000 square-foot facility: $50 million.

Here's what GE had to say about the number of printers and the installation timeline:

Equipment installation will begin in late 2014 and production of additive components will begin in 2015. By the end of 2015, the plant could have as many as 10 printing machines with the potential to grow to more than 50 printers and occupy a third of the facility at full capacity.

Since GE plans to start installing printers and related equipment later this year, it will need to start ordering them very soon. In fact, Greg Morris, general manager of additive technologies, told Reuters, "We're in the final stages of selecting the equipment manufacturers."

GE's 3-D printing plans for the Leap jet engine 
General Electric's big push into 3-D printing started when it bought Morris Technologies in late 2012. This acquisition gave it a full-scale 3-D production facility near its aviation division's Ohio headquarters. At that time, Morris was equipped with 35 3-D printers, mainly composed of privately held EOS's direct metal laser sintering, or DMLS, systems, along with at least one or two of Arcam's electron beam melting, or EBM, systems.

Then in mid-2013, GE announced that it planned to use 3-D printing to produce the fuel nozzles for the new Leap jet-engine, each of which will contain 19 nozzles. The Leap engine is being made by CFM, which is a 50-50 joint venture of Snecma, a subsidiary of France-based Safran, and GE. This is a mammoth undertaking, as GE needs to fabricate 85,000 nozzles for the engine orders it had in hand at that time, and expects its annual production to eventually require 45,000 nozzles.

A full-size mockup of the CFM LEAP-X. Source: Wikipedia. 

GE plans to use current technology to ramp up its production while also working with original equipment manufacturers to develop new higher-capacity systems. The company was reportedly testing laser sintering systems from both 3D Systems and privately held Concept Laser. Given this fact and that Morris' facility is composed primarily of EOS's DMLS systems, it appears that GE plans to use laser sintering technology.

However, it seems likely that Arcam could also be involved in GE's capacity ramp-up, at least at some point. That's because Avio Aero, which GE acquired last year, has been a major buyer of Arcam's EBM systems for many years. Even if GE decides to only use laser sintering to produce its fuel nozzles, Arcam could still be included in GE's plans for Auburn. That's because GE has 3-D printing plans for this facility that go beyond the Leap engine.

GE plans to increase the size of the former Morris Technologies facility
Additionally, GE's statement contained this nugget:

All development of additive components will remain in Aviation's Additive Technology Center (ATC) in Cincinnati, OH, which is also expected to grow over 300% in size in the coming year. The ATC will demonstrate a component's manufacturing readiness before needing to scale for full rate production.

This probably means that GE plans to add some additional printers at this location, too; the facility reportedly had 35 printers when GE acquired it. So investors in 3D Systems and/or Arcam could be seeing some printer orders for this facility as well.

Foolish final thoughts
General Electric is already the world's largest user of 3-D printing technologies in metals. Additionally, GE had previously announced that it planned to invest "tens of millions" in the technology as part of a larger $3.5 billion investment in its aviation supply chain over the next five years. Given that it just earmarked $50 million for the Auburn facility, it seems likely that its "tens of millions" figure could prove conservative. GE also recently announced plans to start using 3-D printing in its power and water business, which is its largest industrial division.

Regardless of exact figures, one thing is for certain: GE's might and massive investments in 3-D printing mean that its actions should significantly shape the 3-D printing space going forward.