Howmet CEO 'Fine' With GE Aerospace Deal as Engine-Part Demand Strains Capacity

On Wednesday, Howmet Aerospace's CEO said he is comfortable with GE Aerospace's $12 billion acquisition of a castings company, even while the company's own efforts to satisfy booming customer demand for jet-engine parts are being severely tested.

GE Aerospace unveiled plans on Tuesday to buy Consolidated Precision Products (CPP) to tackle jet-engine supply bottlenecks. Shares of Howmet, a key castings producer, fell 10% in response.

CEO John Plant, speaking at the Jefferies Global Industrials Conference in New York, said Howmet remains sure of its own strengths, even as he anticipates GE will use the acquisition to expand its smaller rival CPP.

"You saw the intent yesterday—to develop it over the years. And I think we should be fine with that," Plant remarked.

"The question, of course, is whether future investment and additional capacity at CPP would hurt everyone else, be aimed at one of our competitors, or focus more on the turbine side versus the structural casting side," he added.

Demand for engine parts is skyrocketing as commercial aircraft manufacturers and defense contractors accelerate output. Howmet also makes blades and vanes for gas turbines used in data centers, a segment growing rapidly because of artificial-intelligence-driven power needs.

"It is testing us in many ways, because we hadn't expected to be building this amount of equipment," Plant said.

"The sheer magnitude of our capital expansion is certainly testing us."

Plant said he will present an updated outlook for Howmet's longer-term revenue targets within the next few earnings calls.

"My earlier statement was that from 2025 we would see our revenues double within a three- to five-year period," he explained. "I won't update that today, but an update will be coming at some point."