The FME manufacturing plant floor
in Beloit, Wisconsin.
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Power Plant Partnerships
How Fairbanks Morse Engine collaborates with international licensors
BY PAUL RODEN
www.sname.org/sname/mt
F
or more than 47 years, our company, Fairbanks
Morse Engine (FME), has licensed engine technology from European engine companies. These
arrangements have supplemented our own diesel engine technology and supported our manufacture
and sale of engines and parts to the United States Navy
and other customers.
FME has a long history of building internal combustion engines in Beloit, Wisconsin. Once a supplier
of locomotive diesel engines and various other products, we are now a primary supplier of propulsion and
electric power diesel engines for the United States
Navy and the United States Coast Guard. We build
the largest medium-speed diesel engines in North or
South America for power generation, nuclear power
plant emergency backup, oil and gas operations, and
U.S. government shipbuilding programs.
Since the late 1960s, we have been a licensee of
SEMT (Societe d’Etudes de Machines Thermiques) Pielstick, a French diesel engine manufacturer. These
engines, built in the U.S., became known as “ ColtPielstick” engines, which proved to be successful in
maritime operations.
In addition, during the early 1990s, we collaborated with German engine manufacture MAN Diesel
and Turbo on the development of dual-fuel capabilities
in their medium-speed diesel engines. Based on this
collaboration, MAN and FME entered into a license
agreement in 1995 for medium-speed diesel engines for
the military market. Under this license agreement, we
manufactured and sold engines and parts for the navy’s
dry-cargo ship known as T-AKE (MAN 48/60 medium
speed diesel engines) and later the Mobile Landing
Platform known as MLP (also MAN 48/60s).
In 2006, MAN Diesel and Turbo acquired SEMTPielstick as a division. Our license agreements, and
strong personal relationships, still exist with each part
of the MAN organization.
Conditions and restrictions
A license agreement for engine manufacturing is simply
a contract between the owner of intellectual property (in
this case an engine design) and a manufacturer wishing to build that engine under certain conditions and
restrictions. Some of these conditions and restrictions
for an engine license agreement include the term length,
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Power Plant Partnerships continued
An FME technician inspects components.
specified engine models, geographic region/market and agreed upon
royalty payments. In the case of our license agreements with MAN,
the license has specifically been applied to sales within the United
States for U.S. government programs. An earlier agreement with
SEMT-Pielstick additionally allowed for the sale of large mediumspeed diesels into the U.S. power generation market.
A primary benefit of the license agreements with SEMT-Pielstick
and MAN is the expansion of the FME product portfolio into larger
powered engines. Our in-house products range roughly from 1 to 3.5
MW, whereas the Pielstick-licensed products exceed 22 MW.
An additional benefit of our license agreements is the access they
provide to overseas engine design talent. Each company has benefited from mutual learning and collaboration, which also has resulted
in benefits to the U.S. government. This collaboration has been reinforced through personal relationships and frequent overseas travel by
both parties. To be successful, the licensing arrangement must include
a strong collaborative spirit and mutual trust.
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In recent years, we have integrated several licensed mediumspeed diesel engines into the manufacturing process at our Beloit
plant. The process begins by establishing a chartered project
manager responsible for forming the integration team and completing necessary milestones. The integration team is made up of
a core team, including representatives from purchasing, sales,
engineering, design/drafting, and manufacturing engineering.
Additionally, there is an FME support team with representatives
from logistics, facilities, finance, quality, service, and training. The
project manager directs the tasking associated with learning the
engine, sourcing all components, and bringing it into production.
All of this involves significant collaboration with the corresponding divisions/departments at the licensor.
The tasks that go into integrating the product are extensive, but
at a minimum, they require that everyone begin with an in-depth
knowledge of the program-specific requirements, including any
that may be in place from the classification societies. This is the first
step in ensuring that all requirements are met. We then go through
the process of obtaining the bill of materials and drawings from the
licensor. These are then reviewed to gain a thorough understanding
of the engine specifics, costs and component sourcing.
Next, there must be a full understanding of the licensor’s manufacturing and assembling procedures. This is gained through a
review of the established work instructions, standards, project manuals, and operating manuals.
If classification society certification is required, we work with
that society (in our case, the American Bureau of Shipping) to
understand the requirements and develop the necessary test
plans to ensure certification. In the case of recent government
programs, we have qualified the licensed engines to Steel Vessel
Rules and Naval Vessel Rules, as applicable. In addition, we performed the necessary shock, vibration, and electro-magnetic
interference testing to meet navy requirements.
Determining sourcing
As production planning continues, there are additional tasks for the
integration team. This includes determining the actual sourcing of
the components. Like other manufactures, we have detailed “ makeversus-buy” criteria to assist in deciding whether it makes sense to
manufacture the components or obtain them from other sources. The
license agreements often require that some components (for example,
turbochargers) be obtained from the licensor. As material sourcing is
determined, it is then entered into our procurement system.
In determining the sourcing of materials and components, there
is close cooperation between the engine manufacturer and licensor.
This collaboration becomes critical in the selection and qualification of U.S.-based suppliers of engine and system components that
serve to maximize U.S. content while ensuring that the technical
standards of the licensor are met.
The production phase involves extensive onsite training from
the licensor and includes the development of quality plans, quality
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control inspections, gauging requirements, and visits from the classification society. Issues specific to the start of manufacturing in
Beloit include the determination of proper machine tooling, shop
tools, jigs, fixtures, assembly stands, and lifting devices to ensure
the most efficient assembly process. There is simultaneous preparation for engine testing, which includes a review of our emissions
permits and any necessary test stand conversions.
Throughout the manufacturing process, there must be extensive
collaboration between the manufacturer and licensor to ensure all
products are delivered to meet the quality and performance standards of the engine.
During the in-service phase, collaboration continues to be
critical as the original equipment manufacturer (OEM) works to
support the product in meeting the customer’s expectations. This
often involves defining the preventive maintenance actions that are
necessary to ensure that reliability goals are achieved. Corrective
maintenance is an additional area in which technical collaboration
is required, to ensure the resolution of any problems or failures that
may result during operations. As the OEM works with the customer,
they may collectively come up with improvements. As the licensee
has no rights to modify the engine design, they work closely with
the licensor to include any design improvements and upgrades that
would improve performance.
An additional benefit of the licensee/licensor agreement is that
the licensee gains access to the global license community for not
only technical expertise, but also for the acquisition of certified
parts or service. This can be beneficial to the customer in times of
parts shortages or repair emergencies. The worldwide license network facilitates parts and service needs by naval ships that may be
located anywhere around the globe. The licensor/licensee community can additionally leverage the value of combining component
purchases into larger volume lots from suppliers, thereby achieving lower prices and greater availability and inventories.
Collaboration between licensee and licensor is not limited to just
the manufacturing and in-service phases. We have had additional
success with MAN in collaborating during the design phase. Examples
of this include the development of the sequential turbocharging (STC)
design and the expansion of dual-fuel capabilities into MAN products.
In the mid-1990s, we worked with SEMT-Pielstick on the development and application of STC on the PC2.5 engine for the LPD-17
ship propulsion platform. STC allows for one turbocharger to provide pressurized intake air during low-load operations, with the
second turbocharger coming online at higher power levels. This now
common design allows for more efficient operation at lower engine
load. The design process included engine design modifications with
SEMT-Pielstick, as well as turbocharger development with MAN,
to arrive at an expanded operating envelope that would meet the
navy’s required ship operating profile. We performed much of the
design work through licensor collaboration, as well as joint prototype performance testing to verify the low speed/high torque profile
at greatly improved fuel consumption rates.
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Based on our knowledge and success with “gasifying” opposed
piston engines, we worked collaboratively with SEMT-Pielstick/
MAN on joint dual-fuel engine development from the 1970s through
the 1990s. This resulted in new dual-fuel capabilities for the PC2.2,
PC2.3, PC2.5, and PC2.6 Pielstick engines—first in the 5% pilot
fuel configuration, then in the FME 1% EnviroDesign configuration. We did further joint product development of the MAN 32/40
EnviroDesign dual-fuel engine in the 1990s.
Challenges to collaboration
In pursuing a business strategy there is rarely only upside, which can
be particularly true when it is a joint business strategy with another
company. The fact that a licensee and licensor remain separate companies, with their own strategies for going to market, can challenge the
collaboration process. This is not insurmountable, however, and is best
mitigated by respecting the licensing contract and maintaining focus
on those areas in which each company can mutually benefit through
cooperation and collaboration.
As indicated previously, license agreements are typically written
to be restricted to particular markets or geographic areas. In the case
of our license with MAN, the agreement is designed to provide access
to specific markets and geographies where we believe both companies
are stronger than one. The result of this is a competitive advantage for
defense shipbuilding in the U.S. Our companies also have developed
strategic relationships to pursue markets outside of the defense shipbuilding market. During summer 2014, we decided to partner in the
U.S. power generation market, where we believe the combination of
our customer centricity, application engineering expertise, and service footprint partnered with MAN’s state of the art gas engine product
portfolio offers customers a greater value than the competition.
These international license agreements have been of great value
to each of the companies involved, and to our customers. Successful
execution of such arrangements depends on effective collaboration
at all levels of each of the companies. MT
Paul Roden is vice president for Washington operations at Fairbanks Morse Engine.
The author would like to thank the following individuals for their contributions
to this article: Patrick Bussie, FME director of business development; Frank
Aboujaoude, FME engineering manager; and George Ferriter, FME sales manager.
Deeper Dive
To learn more about the history of Fairbanks Morse
Engine, and the development of the power plants that led
to today’s engines, check out “FME Through the Years” at
www.sname.org/mt/webexclusive.
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