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May 6, 2011—
General Electric and Rolls Royce announced Thursday that they will "bear all costs for continued development" of the F136 engine for the F-35 strike fighter through the end of Fiscal 2012.

"We believe so strongly in our engine and the need for competition in defense procurement that we have committed to self-fund F136 development costs for this fiscal year and next," said GE CEO Jeff Immelt in the companies' joint statement.

Previously they had committed to funding the engine's development on their own dime through the end of this fiscal year.

GE Aviation spokesman Rick Kennedy told the Daily Report Thursday that the two companies estimate spending "more than $100 million" to keep F136 engine work going through the end of next fiscal year.

"The [engine's] development program is being stretched out, especially given that the [F-35] aircraft program is also moving to the right," he said. "The objective is to develop the engine at a pace to be ready to compete in 2016."

GE and Rolls say the F136 is about 80 percent mature and about $3 billion in government investment has already gone into it.

They want the chance to vie against Pratt & Whitney's F135 for the rights to power thousands of future F-35s, potentially saving taxpayers many billions of dollars through sustained competition.

But first, the F136 would have to survive the Pentagon leadership's efforts to kill it as an "unneeded and wasteful" expenditure. Strapped to fund what are considered higher priorities, Pentagon officials say they cannot afford to spend hard cash up front in the near term on the F136 in the hopes of reaping potential, less firmly established savings later on.

The Pentagon last month terminated its F136 contract with the companies to advance the goal of killing off the engine and was successful in seeing that it received no Fiscal 2011 funding. That's why the companies are adopting self-funding.

Rep. Buck McKeon, House Armed Services Committee chairman, praised the companies' announcement during a speech Thursday at the Heritage Foundation in Washington, D.C.

"That sort of acquisition reform from the defense industry should be rewarded and applauded at every opportunity," he said. "I hope and would encourage the Secretary of Defense, members of Congress and our industry partners to support this innovative approach."

McKeon believes that engine competition for the F-35 makes fiscal sense and he supports keeping the F136 alive.

Last October, during a public appearance in Washington, D.C., Air Force Chief of Staff Gen. Norton Schwartz said if GE and Rolls have so much confidence in the F136, "it would be nice if they put a little bit more against that $1.9 billion bill that they'd like the taxpayers to underwrite" to complete its development.

Apparently, the companies heard him.