FARNBOROUGH, England (Reuters) - Engine makers fighting over a potential $100 billion market to power the Lockheed Martin Corp F-35 fighter jet traded barbs at the Farnborough Airshow in England on Tuesday, far from the halls of the U.S. Congress where the matter will be decided.
Dave Hess, president of United Technologies Corp’s Pratt & Whitney unit, acknowledged that his company was actively lobbying lawmakers on the issue but insisted the rival team of General Electric Co and Britain’s Rolls Royce was spending “orders of magnitude” more.
Jean Lydon-Rodgers, president of GE Aviation’s military business and former head of the GE-Rolls engine team, said the issue was clearly an “enormous priority” for both GE and Rolls, but he rejected Pratt’s criticism as “unfair” since General Electric’s lobbying efforts extended to other issues.
Both teams lauded progress on their respective engines, and argued their cases forcefully.
Pratt & Whitney is trying to shore up support for its F135 engine, but some U.S. lawmakers are trying to maintain funding for an alternate engine being developed by GE and Rolls Royce in the face of a veto threat by President Barack Obama.
The issue has resurfaced in each of the past four years, but many analysts say the rhetoric and lobbying activity appear to have reached a fever pitch this year.
Lawmakers on the U.S. House defense appropriations subcommittee are expected to address the issue during a subcommittee markup next week, but the issue may drag on for several months until the fiscal 2010 defense budget is finalized by Congress.
Even Democrats who favor the second engine program face a tough choice this year, given a major push by Obama and Defense Secretary Robert Gates to cut unneeded weapons programs in the face of mounting budget pressures in the United States.
Richard Aboulafia, defense analyst with the Virginia-based Teal Group, said it was not surprising that the engine makers had taken their battle to the road, given that the F-35 was the only major new fighter development project in sight.
“It’s bizarre, but there’s a lot at stake,” said Aboulafia, who was also in England for the air show. “This is it. This is all that’s on the horizon.”
Aboulafia noted that the size of the potential market was huge, given that Lockheed expects to sell thousands of the new fighters over coming years, and engine makers relied on investment in military projects to help technology developments in the commercial sector.
Backers of the second engine argue that it makes sense to maintain competition for the engines to drive prices lower in the long run by keeping both teams on their toes, especially since the GE-Rolls engine is 75 percent complete.
Pentagon officials say they just don’t have the money to pay for continued work on what they are now calling the “extra engine,” and dispute reports that show savings over time.
Hess showed reporters a chart listing over a dozen aircraft programs that only had one engine and said the only other warplane with two engine suppliers was the F-16.
But Lydon-Rodgers argued that the Pratt program was already $1 billion over budget, and the decision to stick with a sole source engine was “bad government” at a time when the Obama administration has called forcefully for competition on other weapons projects.
Reporting by Andrea Shalal-Esa; Editing by Steve Orlofsky
Our Standards: The Thomson Reuters Trust Principles.