US Army plays down Thielert threat to Sky Warrior

By Jim Wolf

WASHINGTON, April 24 (Reuters) - Brig. Gen. Stephen Mundt, director of U.S. Army aviation, played down Thursday the possible collapse of Thielert Aircraft Engines GmbH, maker of engines for the U.S. Army's flagship MQ-1C Sky Warrior unmanned aerial vehicle.

"It's not the only engine that I know of," Mundt told a handful of reporters at a Pentagon briefing on army aviation issues. If necessary, the army would seek another engine supplier, he said.

"That's happened before in other systems," added a Mundt aide. Mundt said he had been unaware of the Hamburg, Germany-based company's plight until asked about it by a reporter at the briefing.

In Hamburg, Thielert AG (T3CGn.DE) said Thursday its aircraft engine subsidiary had filed for insolvency. The unit's ability to stay in business permanently had hinged on a restructuring with the support of investors, it said.

Thielert shares plunged as much as 72 percent Thursday after its supervisory board dismissed management board members Frank Thielert and Roswitha Grosser and said financial statements for 2003, 2004 and 2005 were probably incorrect.

The company also said investors who had intended to support Thielert, which makes the lightweight heavy fuel Centurion engine for the Sky Warrior, were no longer wiling to provide assistance for a restructuring.

"The restructuring measures to deal with the company's liquidity crisis therefore cannot be implemented as planned," Thielert said in a statement.

Sky Warrior is being developed by General Atomics Aeronautical Systems Inc, which did not immediately return a phone call seeking comment.

The aircraft is designed to boost the army's intelligence, surveillance and reconnaissance capabilities in places like Iraq and Afghanistan. It could also carry "Hellfire" missiles.

Earlier this week, Defense Secretary Robert Gates complained that U.S. military services were not moving quickly enough to boost the use of such drones over the battlefield.

Mundt said he was sending remotely piloted drones "forward" as fast as he could under the circumstances, with more than half of them already there, while necessary training continued at home on others.

The U.S. Army currently plans to buy 17 Sky Warrior aircraft and seven "One System Ground Control Stations," according to General Atomics.

The total program, including follow-on production, is estimated to be worth over $2 billion, the company added in an April 15 news release.

A derivative of General Atomics' combat-proven Predator drone, the Sky Warrior costs about $6 million per airframe, Mundt said. (Reporting by Jim Wolf, editing by Gerald E. McCormick)