GE Overhauls Locomotives Amid Sale Talks

GE Transportation is undergoing a dramatic transformation.

At A Glance

Established more than a century ago, GE Transportation is a division of the General Electric that began as a pioneer in passenger and freight locomotives. Headquartered in Chicago, today it has:

  • More than 65 service sites worldwide
  • $4.7 billion in revenues and $1.1 billion in operating profit (2016)
  • Three primary divisions: Equipment (rail, mining, marine, stationary power and drilling), Services and Digital Solutions

The parent, General Electric, founded in 1897 by Thomas Edison is moving away from its household image of an industrial and consumer products giant; it’s taking giant strides toward a “digital industrial” reputation – a fact underscored by its $7 billion in software sales in 2016.

And that blending of heavy industrial with digital is permeating GE Transportation – one of its oldest verticals which has been making transportation equipment such as locomotives for more than 100 years, never mind that GE is looking to divest this line of business.

The quiet evolution underway at GE Transportation is bringing about “game changing” innovation to its locomotives. In fact, it has among the smartest locomotives on the market –with the newest series fitted with hundreds of sensors capable of processing more than a billion instructions per second!

Credit: GE Transportation

“GE Transportation has been using sensors and analytics for its locomotives very early on,” says Tom Davenport, Digital Fellow at the MIT Initiative on the Digital Economy and President’s Distinguished Professor of IT and Management of Babson College, “to figure out, say, where are the best places to maintain its locomotives or to specify the best speed at which to drive locomotives to maximum efficiency.

Prof. Tom Davenport

“Now, there are more possibilities for analytics. You can monitor a variety of conditions on tracks, see if there are cracks in wheels, etc.”

Most importantly, analytics play a big role in safety and predictive maintenance – prompting many, including GE Transportation’s own customers, to experiment with sensor technology.

The Rail Safety Improvement Act of 2008 calls for passenger and freight railroads to install “positive train control” technologies – systems to automatically stop a train to prevent accidents– by 2015, according to the Association of American Railroads. The deadline has been moved to the end of this year, and further extensions are available through 2020 to allow for testing.

“Many of the rail companies such as Norfolk Southern and Union Pacific are doing the same kind of work with sensors, so it’s unclear who’s going to take lead in freight-oriented railways; everyone has their own approach to predictive maintenance of assets,” Davenport said.

“I do think GE is leading the innovation in this area.”

Newest Offering: EdgeLINC

Last October, GE Transportation launched EdgeLINC.

It is the newest offering from the company whose goal is to enable a locomotive, through the use of sensors, to continuously gather data about itself and its environment, making it “aware” so a railroad can make better decisions.


“EdgeLINC offers computing and analytics on the edge, giving rail operators actionable information to make real-time decisions,” said Garret Fitzgerald, GE Transportation’s VP and General Manager of Transport Intelligence. 


For example, when sensors on locomotive gather data on various functions, say vibration or noise, EdgeLINC collects that data in the cloud and organizes into a model “twin” that allows analysis that replicates the machine’s performance. This digital twin model is then used to diagnose faults and predict the need for maintenance, ultimately reducing or eliminating unplanned downtime.

At its heart, EdgeLINC which has an industry standard IoT architecture, enables device-agnostic device management, configuration and edge analytics of real time data.

For example, it helps railroads manage their devices and make smarter decisions right at the point of decision, say, by a railway crew approaching a tunnel. By monitoring assets in real time and reporting on asset performance – it helps minimize downtime (idling of locomotives), damages, and most importantly, maintenance costs.

EdgeLINC Interface Credit: GE Transportation

GE Transportation has teamed up with SAS and Infosys to develop EdgeLINC. The solution already is being deployed on more than 1,000 locomotives by a Class 1 railroad in North America, Fitzgerald said, although he declined to name the customer.

EdgeLINC is capable of running on GE’s GoLINC platform, the company’s flagship networking and communications system, as well as other third-party devices. GoLINC was launched 7 years ago as a mobile data center on board a locomotive, collecting and processing information from sensors both on and off the train.

GE Transportation’s other digital solutions aimed not just at locomotives but the entire railroad system include Trip Optimizer, LocoVision, Movement Planner and Yard Planner, among others.

For example, the Trip Optimizer is automated, cruise control system that crunches data on route, road conditions, etc. to make an optimal fuel plan, resulting in 10% fuel savings on average. It has logged more than 300 million auto miles, saving customers more than 200 million gallons of fuel.

The Movement Planner and Yard Planner solutions use advanced algorithms to optimize a railroad’s entire network, say, from figuring out train routing to yard activities, to enable more trains to run on tracks at faster speeds with less congestion.

Credit: GE Transportation
What a GE Transportation Divestiture Would Mean

GE is exploring various options to divest $20 billion in assets over the next few years, which includes divesting its transportation arm.

The revamp comes in the wake of CEO John Flannery’s bid to improve GE’s stock market performance which has been lackluster for more than a year as it grapples with weak global demand for industrial equipment.

GE CEO John Flannery

“GE is ahead of competition in the transportation space, its closest competitor is Siemens in rail, more in light rail than heavy locomotives,” Davenport said. “It’s sad to me that for all its innovative actions, the company is being derailed by performance problems related to energy and overhang from GE Capital.”

Last month, it was reported that GE is considering combining its rail division with Wabtec, a company that builds locomotives and offers services to the rail transit markets. The transportation unit could be worth as much as $6.8 billion in a sale, Julian Mitchell, an analyst at Barclays Plc, wrote in a note to clients on April 17.

GE Transportation accounts for $4.7 billion of the parent company’s $123 billion annual revenue (2016).

Credit: GE Transportation

Last summer, it announced plans to shift international kits and locomotive production from Erie, Pa. to Fort Worth, Texas. However, all locomotive prototyping, component manufacturing, engineering, design and development will remain in Erie.

The 1-million-square-foot facility in Fort Worth is also used to modernize aging locomotives – in fact, it’s the biggest such facility in the world. Here, old locomotives are given a makeover – ranging from simple changes such as control system upgrades to complex ones such as the transformation of an aged DC locomotive into an AC locomotive outfitted with digital technology.

These changes haven’t distracted from its innovation plans, reiterated Fitzgerald.

“From the standpoint of our team’s ability to continue development of solutions, either our short-term or long-term vision, there hasn’t been any impact,” Fitzgerald said.

“However, if any divestiture plays out, or we were to stand as an independent, standalone company, we will be just as close to Predix,” he added, referring to GE’s industrial IOT platform developed by GE Digital which supports IOT applications across verticals, including transportation. “We have had phenomenal access to our global resource center, our funding is more than in prior years.

“If a divestiture is coming, we plan to go forward as a preferred partner with GE Digital.”

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