GE, Rolls Royce seek to complete second F-35 engine


General Electric Co and Rolls Royce Group Plc asked the Pentagon on Thursday to let them resume development, at their own expense, of the controversial alternative engine for the multinational F-35 fighter jet.

At stake is potential business that General Electric and others put at more than US$100 billion in coming decades. It is also a challenge to President Barack Obama and Defence Secretary Robert Gates, who have dismissed the interchangeable engine project as unaffordable and a waste.

The Defence Department killed the competitive engine program last month in a boost for United Technologies Corp, whose Pratt & Whitney subsidiary builds the F135 engine powering early production F-35s. Congress removed US$450 million of funding allocated to the engine, leading to its official termination on April 25.

The Defence Department’s stance on the program “has not changed,” said Cheryl Irwin, a Pentagon spokeswoman, in response to the GE-led team’s renewed push to keep its engine alive.

The radar-evading F-35, built by Lockheed Martin Corp, is the Pentagon’s costliest arms purchase at some US$382 billion for what are now due to be 2,443 planes.

GE and Rolls are prepared to spend more than US$100 million of their own money to fund the F136 engine’s development through the end of fiscal 2012, GE spokesman Rick Kennedy said in an email.
“GE and Rolls Royce are simply asking that they are provided — at no cost to the government — access to the engines, components, and testing facilities to continue their development work,” he said. The engine is at present owned by the government.

The companies have been shut off from the hardware since the Pentagon finally stopped work on the program, five years after it started seeking to do so as a belt-tightening move. Lawmakers omitted funds for the project in a long-delayed budget deal last month to cover U.S. spending for the remainder of fiscal 2011, that ends September 30.

The Pentagon has said it would cost US$2.9 billion more to develop the alternate engine to the point that it could vie with Pratt & Whitney for orders. The Defence Department maintains that it does not foresee a payback for the investment. Its backers say it could save billions of dollars over time. However, GE said development cost for the 80% complete engine would be around US$1 billion and it would cost another US$800 million to start production.

The chairman of the House of Representatives Armed Services Committee, Howard McKeon, hailed the GE-Rolls self-funding offer as a “smart, viable solution to a tough problem,” referring to the Pentagon budget squeeze.
“I will accept and support their approach,” he said in remarks at the Heritage Foundation, a conservative research group that was kicking off its “Protect America Month.”

Letting the companies wrap up the development work using their own funds would “break up a monopoly, potentially harvest billions in savings, while fielding a more capable, more robust fighter jet — all at zero cost to the American taxpayer,” McKeon said.

The California Republican described the proposal as a watershed that could change the way certain big arms systems are developed and funded by the Pentagon.
“I hope and would encourage the Secretary of Defence, Members of Congress and our industry partners to support this innovative approach to providing our troops with the resources they need to succeed,” McKeon said.

A House Armed Services panel that oversees air and land forces voted Wednesday to force the Pentagon to reopen the engine competition if Pratt & Whitney seeks more money to boost its engine’s performance for the F-35. It did so in its recommendations on a fiscal 2012 military spending bill. GE has said its F136 engine is meeting or beating expectation while Pratt & Whitney’s had cost overruns of US$3.4 billion. Pratt & Whitney has attributed US$2.7 billion of the overruns to changes requested by the Pentagon.

Pratt & Whitney is worried that full funding may again be granted for the alternative engine if General Electric and Rolls Royce get their way. “This is a US$3 billion Trojan horse,” a consultant for the Connecticut-based company said. “What they’re really trying to do is get under the radar screen [and] keep the government on the hook as long as they can.”

Meanwhile, cost overruns affecting the entire F-35 programme remain a concern for the Pentagon, which has restructured the US$382 billion program twice in two years to get a grip on technical issues and repeated cost overruns.

Pentagon acquisition chief Ashton Carter has repeatedly underscored his continuing cost concerns about the program. Last month, he told lawmakers that costs were growing too fast on both the overall F-35 program, and the F135 engine being developed by Pratt & Whitney. He said cost overruns on the airframe were proportionately higher than on the engine.

Carter also included the program as one of 14 weapons programs that will be subject to tougher oversight.

The Pentagon estimates that the average cost of each F-35 warplane will be about US$90 million, up from early estimates of US$50 million per plane. Lockheed projects the average price of the Air Force variant will be around US$65 million.

Eight countries have joined the United States to co-develop the F-35 — Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway.