* GE-Rolls ready to spend $100 mln of their own
* Pentagon says opposition to 2nd engine has not changed
(Adds quotes, Pentagon reaction, background, byline)
By Jim Wolf
WASHINGTON, May 5 General Electric Co (GE.N)
and Rolls Royce Group Plc (RR.L) asked the Pentagon on
Thursday to let them resume development, at their own expense,
of a controversial alternate engine for the multinational F-35
At stake is potential business that General Electric and
others put at more than $100 billion in coming decades. It is
also a challenge to President Barack Obama and Defense
Secretary Robert Gates, who have dismissed the interchangeable
engine project as unaffordable and a waste.
The Defense Department killed the competitive engine
program last month in a boost for United Technologies Corp
(UTX.N), whose Pratt & Whitney subsidiary builds the engine
powering early production F-35s.
The Defense 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
The radar-evading F-35, built by Lockheed Martin Corp
(LMT.N), is the Pentagon's costliest arms purchase at some $382
billion for what are now due to be 2,443 planes.
GE and Rolls are prepared to spend more than $100 million
of their own money to fund the second 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 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 Sept. 30.
The Pentagon has said it would cost $2.9 billion more to
develop the alternate engine to the point that it could vie
with Pratt & Whitney for orders. The Defense Department maintains that it does not foresee a payback for the
investment. Its backers say it could save billions of dollars
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,"
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 Defense,
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 miliary spending bill.
Eight countries have joined the United States to co-develop
the F-35 -- Britain, Italy, the Netherlands, Turkey, Canada,
Australia, Denmark and Norway.
McKeon also criticized a plan announced by Obama last month
to trim $400 billion from the $10 trillion or so in projected
U.S. national security spending through 2023.
Any savings that are identified by the Defense Department
must go back into defense, he said, and "not to any other pet
project that the Obama administration deems a higher priority
than our security."
(Reporting by Jim Wolf; Editing by Gerald E. McCormick and Tim