Pratt & Whitney says drive to lower F-35 costs "burned in our brain"

WASHINGTON Wed Mar 6, 2013 10:27pm EST

A U.S. Marine F-35B Joint Strike Fighter Jet sits in a hangar after the roll-out Ceremony at Eglin Air Force Base in Florida February 24, 2012. REUTERS/Michael Spooneybarger

A U.S. Marine F-35B Joint Strike Fighter Jet sits in a hangar after the roll-out Ceremony at Eglin Air Force Base in Florida February 24, 2012.

Credit: Reuters/Michael Spooneybarger

WASHINGTON (Reuters) - The head of Pratt & Whitney's military engine business said on Wednesday that driving down the cost of the F-35 fighter jet was "burned in our brain," but cuts sparked by U.S. budget woes could slow the effort.

Bennett Croswell, president of Pratt & Whitney Military Engines, said he met with the Air Force general who heads the Pentagon's F-35 program in Australia after he accused Pratt and F-35 prime contractor Lockheed Martin Corp (LMT.N) of trying to "squeeze every nickel" out of the U.S. government.

Lieutenant General Christopher Bogdan told a conference on Tuesday that he had spoken with executives at Lockheed and Pratt & Whitney several times in the past few days and had received assurances that they had "heard my message.

Croswell said Pratt, the United Technologies Corp (UTX.N) unit that makes the F135 engine that powers the F-35, began a "war on cost" in 2009 that was already yielding results. He noted that Pratt had invested heavily to cut the cost of the engine by 40 percent since the first one was delivered.

"Since we launched that 'war on cost' in 2009, that message was burned in our brain from the very beginning," Croswell told reporters. "I concur with the general; he's right. We've got to continue to drive the cost down of this system."

The Pentagon plans to buy 2,443 of the new radar-evading fighter jets in coming decades, with the total cost of developing and procuring the planes forecast at $396 billion.

Pratt submitted a proposal to the Pentagon's F-35 program last June for a sixth batch of engines, and looked forward to beginning negotiations on that contract, Croswell said.

Current plans for the sixth batch of 39 engines include 23 conventional engines for the U.S. Air Force and international customers, seven carrier variant engines for the U.S. Navy, six engines for the Marine Corps' short takeoff, vertical landing planes, and three spare engines, according to a Pratt spokesman.

BUDGET CUTS

Croswell said the company would have to get updated pricing data from its suppliers, who account for 80 percent of the work on the engine, if the automatic U.S. budget cuts that took effect on March 1 result in a reduction in the number of F-35 jets to be built in fiscal 2013.

Air Force and Navy officials have said the program might lose four to nine jets, depending on how the cuts are implemented. Bogdan has said that his top priority is funding the F-35 development program, which is only about a third complete.

"We have made a proposal for a certain number of engines, and if that number of engines gets adjusted, then we'll have to re-propose," Croswell said.

Congress is still negotiating with the White House about possible alternatives to soften the impact of the mandatory budget reductions, about half of which would come from the U.S. defense budget. It remains unclear if the cuts will be averted.

Croswell said he expected negotiations about the sixth F-35 engine contract to proceed more quickly than the last time since Pratt had already signed a $65 million agreement with the Pentagon on maintenance of those planes.

The company also agreed to shoulder 100 percent of any cost overruns on the fifth batch of engines, which meant there was less new ground to cover in the next contract, he said.

Pratt reached agreement with the Pentagon last month on the fifth batch of jet engines to power 29 jets and three spares, a deal that lowered the cost of the engines by 5.5 percent.

Croswell said the company expected to lower costs further in the sixth batch, although he declined to say by how much. If the number to be purchased declined, he cautioned, the savings could well be less than currently proposed. "Potentially it could reduce the reduction," he said.

(Reporting by Andrea Shalal-Esa; Editing by Dan Grebler and Paul Tait)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (7)
tmc wrote:
That’s just funny! Burned in, yeah right. Reuters can do better than reprinting press releases.

Mar 06, 2013 10:14pm EST  --  Report as abuse
GDSAVTHQN wrote:
Time to re-think the whole program. We’ve lost most of our original NATO partners due to budget cuts. The plane dosen’t perform very well. Drones seem to be the way of the future. If past history is predictive the actual cost could be times more than the estimated cost which is already an impossible amount. Do we really need more junk rotting in an aviation desert park? Kill the proigram.

Mar 07, 2013 1:42am EST  --  Report as abuse
dotap wrote:
Nice PR piece, Reuters. Great example of way beyond triple think too, maybe made it to quintuple. I am gradually reading you less and less because of pieces like this and your assistance to our man, Grover Norquist, when down.

Mar 07, 2013 7:29am EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.