June 16, 2010 / 4:55 PM / 9 years ago

UPDATE 1-Gates says GE-Rolls Royce F-35 engine falls short

* GE denies engine falls short on performance

* GE, Rolls Royce building alternate F-35 fighter engine

By Jim Wolf

WASHINGTON, June 16 (Reuters) - U.S. Defense Secretary Robert Gates said an alternate engine for the multinational F-35 fighter jet appears to fall short on performance and would cost at least another $2.9 billion to develop.

“We think that the engine does not meet, probably does not meet, the performance standards that are required,” Gates, who opposes the second engine as unnecessary, told the Senate Appropriations Committee on Wednesday.

The alternate engine is being developed jointly by General Electric Co (GE.N) and Rolls-Royce Group Plc (RR.L).

A GE spokesman, Rick Kennedy, disputed Gates’s comments. “The engine is not falling short of requirements — it’s meeting and exceeding requirements,” Kennedy said in an email.

Gates’s comments were good news for United Technologies Corp (UTX.N), whose Pratt & Whitney unit builds the engine being used in early F-35 production models.

President Barack Obama, consistent with Gates’s advice, said last month he would veto any legislation to fund a second engine for the F-35, which is being built by Lockheed Martin Corp (LMT.N).

Obama’s comments came after the House of Representatives adopted its version of a fiscal 2011 defense spending bill that included $485 million to keep the alternate engine alive.

Several top lawmakers, including the chairmen of the House and Senate Armed Services committees, have questioned whether Obama would use his veto over the second engine or any move to fund more Boeing Co (BA.N) C-17 cargo planes if he were presented with a military spending bill that delivered other important initiatives he has sought.

Gates cautioned lawmakers, “It would be a very serious mistake to believe the president would accept these unneeded programs simply because the authorization or appropriations legislation includes other provisions important to him and to this administration.”

He said the F-35, co-developed with eight foreign partners, was meeting its performance parameters even though its development phase has been extended and the Pentagon’s early purchase plans have been slowed amid efforts to put the program back on track.

“What we think we have endured (in the F-35 program) is primarily management and production problems, a lack of adequate execution on the part of the Defense Department itself,” he said.

Kennedy, the GE spokesman, also disputed the estimate of spending needed on the alternate engine, saying “we strongly disagree with the $2.9 billion estimate.”

Last month, GE said it would take another $1 billion to complete development of its alternate engine, disputing the Pentagon’s assessment that at least $2.9 billion would be needed over the next six years to prepare it for a full engine competition.

GE said last last month its test program was on schedule and that the engine was “exceeding all of its performance goals.” It mentioned thrust, temperatures and operability. (Reporting by Jim Wolf, editing by Lisa Von Ahn and John Wallace)

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