By Michael Roknick
Herald Business Editor
GROVE CITY —
General Electric Transportation said Tuesday it signed a $90 million deal to build locomotive engines in Kazakhstan. GE’s Grove City plant will supply parts to the overseas plant, GE said.
The deal, signed with Transmashdiesel LLC and JSC National Co. Kazakhstan Temir Zholy’s subsidiary, JSC Remlokomotiv, will create a joint venture company to produce diesel engines in Astana, Kazakhstan. The city is the capital of Kazakhstan and is the country’s second largest city.
The agreement is subject to government and regulatory approvals.
GE’s Grove City plant is currently being expanded to produce more diesel engines and that expansion will work in tandem with the Kazakhstan deal, the company said.
“We really don’t expect any change for the Grove City plant other than there will be an uptick in orders,’’ said Michael Ricci, a GE Transportation spokesman.
The Grove City plant currently employs 850 with 150 new jobs expected to be added early next year. Even without the expansion GE is Mercer County’s largest industrial employer.
In outlying the plan, GE said the joint venture will produce about 400 of its Evolution Series diesel engines a year to serve rail, marine and stationary power customers in the Kazakhstan greater region. Partners in the deal will invest $90 million to build a new 97,000 square foot diesel engine plant that would become operational by the end of 2014.
KTZ owns a company, JSC Lokomotiv Kurastyru Zauyty, which already operates a 460,000 square foot locomotive assembly plant in Astana. That plant can assemble about 100 Evolution Series locomotives a year.
The new joint venture intends to manufacture, sell, service, and provide spare parts for the diesel engines.
GE’s Evolution Series diesel engine is the company’s most successful and technologically advanced, fuel efficient, and low emissions engine to date. GE has produced over 5,000 of the engines since its introducing in 2005. The engine is equipped with 12-cylinders that produces the same 4,400 horsepower as its 16-cylinder predecessor allowing it to consume less diesel.
GE Transportation is currently headquartered in Erie but the company previously said it was moving the headquarters to Chicago.