* Offer on about 100 engines in low-rate production run
* 2nd GE-Rolls test engine offline after sensor incident
*Source: DTN News / Reuters By Andrea Shalal-Esa
(NSI News Source Info) WASHINGTON, USA - September 2, 2009: General Electric Co (GE.N) and Rolls-Royce Group PLC (RR.L) representatives met top Pentagon officials
on Tuesday to offer a fixed-price deal on about 100 low-rate production engines for the F-35 fighter.
GE and Rolls-Royce are scrambling to shore up support for the second F-35 engine program, which Defense Secretary Robert Gates and President Barack Obama have singled out as unnecessary in the tightening budget environment.
"We have to demonstrate true savings on the Joint Strike Fighter program. We have to show that by financing a second engine that it will more than pay for itself over time," GE spokesman Rick Kennedy told Reuters.
He said the deal would cover low-rate production engines to be built from 2012 to 2015. Without the F-35 business, GE would be out of the large fighter engine business, he said.
Gates reiterated his opposition to the second engine on Monday in Fort Worth, Texas where Lockheed Martin Corp (LMT.N) builds the F-35. He said Obama's advisers would recommend a veto if the fiscal 2010 budget had second engine funding.
Lawmakers who back the program argue that continuing work on a second engine will provide competition and lower costs on the massive $300 billion fighter program in the long run.
Kennedy called the unsolicited fixed-price offer a "huge commitment" for the companies given that the F136 engine is still in development. Under such a deal, GE and Rolls would pay for any unexpected problems that arose, unlike a cost-plus deal in which those costs would be shared with the government.
That could be significant, given that Pratt & Whitney, a unit of United Technologies Corp (UTX.N), has seen the cost of development on its F135 engine soar by nearly $1.9 billion since 2002, according to the House Armed Services Committee.
The F135 engine for the short takeoff vertical landing version of the fighter needed engineering changes after problems arose during testing several years ago.
Pratt last week said it was investing a considerable amount in engineering changes and improved production processes to drive the engine's cost lower in the longer term.
Marine Corps Brigadier General David Heinz last month cited significant cost growth on the 30-year estimate for the Pratt engine, saying it was slated to rise to $8.3 million per engine from $6.7 million, the biggest increase since 2001.
Heinz has said he backs the president's drive to stop funding the second engine, but in June he said competition for the engine could lower costs and bring faster technology development, while averting the risk of fleet-wide grounding.
on Tuesday to offer a fixed-price deal on about 100 low-rate production engines for the F-35 fighter.
GE and Rolls-Royce are scrambling to shore up support for the second F-35 engine program, which Defense Secretary Robert Gates and President Barack Obama have singled out as unnecessary in the tightening budget environment.
"We have to demonstrate true savings on the Joint Strike Fighter program. We have to show that by financing a second engine that it will more than pay for itself over time," GE spokesman Rick Kennedy told Reuters.
He said the deal would cover low-rate production engines to be built from 2012 to 2015. Without the F-35 business, GE would be out of the large fighter engine business, he said.
Gates reiterated his opposition to the second engine on Monday in Fort Worth, Texas where Lockheed Martin Corp (LMT.N) builds the F-35. He said Obama's advisers would recommend a veto if the fiscal 2010 budget had second engine funding.
Lawmakers who back the program argue that continuing work on a second engine will provide competition and lower costs on the massive $300 billion fighter program in the long run.
Kennedy called the unsolicited fixed-price offer a "huge commitment" for the companies given that the F136 engine is still in development. Under such a deal, GE and Rolls would pay for any unexpected problems that arose, unlike a cost-plus deal in which those costs would be shared with the government.
That could be significant, given that Pratt & Whitney, a unit of United Technologies Corp (UTX.N), has seen the cost of development on its F135 engine soar by nearly $1.9 billion since 2002, according to the House Armed Services Committee.
The F135 engine for the short takeoff vertical landing version of the fighter needed engineering changes after problems arose during testing several years ago.
Pratt last week said it was investing a considerable amount in engineering changes and improved production processes to drive the engine's cost lower in the longer term.
Marine Corps Brigadier General David Heinz last month cited significant cost growth on the 30-year estimate for the Pratt engine, saying it was slated to rise to $8.3 million per engine from $6.7 million, the biggest increase since 2001.
Heinz has said he backs the president's drive to stop funding the second engine, but in June he said competition for the engine could lower costs and bring faster technology development, while averting the risk of fleet-wide grounding.
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