AIRSHOW-F-35 engine makers trade barbs at air show

By Andrea Shalal-Esa

FARNBOROUGH, England, July 20 (BestGrowthStock) – Engine makers
fighting over a potential $100 billion market to power the
Lockheed Martin Corp (LMT.N: ) 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 (UTX.N: )
Pratt & Whitney unit, acknowledged that his company was
actively lobbying lawmakers on the issue but insisted the rival
team of General Electric Co (GE.N: ) and Britain’s Rolls Royce
(RR.L: ) 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.

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(Reporting by Andrea Shalal-Esa; Editing by Steve Orlofsky)

AIRSHOW-F-35 engine makers trade barbs at air show