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. Last Updated: 07/27/2016

GE ToutsRybinsk Alliance

Top executives of U.S. General Electric Co. and Russia's troubled Rybinsk Motors said Wednesday a recently signed joint venture to produce aircraft engines marked a promising start to an industrial partnership.

"GE has an intention to invest many millions of dollars as the business grows and production orders are received," Tracey Homburg, vice president for the aircraft engines division of GE, told a press conference.

GE, the world's largest jet engine producer, signed a $600,000 agreement earlier this week with Rybinsk to set up a venture to produce engines for Kamov helicopters and Sukhoi civil aircraft for the Russian and CIS markets. But Homburg said there would be no mass production until next year because potential clients lacked money to buy.

Russia's other leading engine manufacturer, Perm Motors, already is cooperating with America's United Technologies aeroengine division Pratt & Whitney on production. But Homburg said they were not in direct competition because the firms were mostly producing different types of engines.

The 50/50 joint venture will be run by three American and two Russian directors, with the chairman appointed by GE.

"This is but the beginning," said Sergei Kiselyov, deputy general director of Rybinsk Motors. "It will offer us an opportunity to learn from their rich experience."

Rybinsk has seen its orders tumble since the end of the Cold War dried up military demand, and has also been the center of a privatization dispute, which ended with the government backing away from plans to sell of a 37 percent stake in the company.

GE already has been buying parts from Rybinsk for almost two years and has set up a quality certification system at the plant, Homburg said.