Obama cuts target $465M GE-Rolls Royce engine

The Pentagon will scrap $465 million in funding for the Joint Strike Fighter alternative engine in a move sure to roil supporters in Congress.

President Obama singled out the elimination of the engine’s funding in remarks Thursday on the budget, which proposes $17 billion in cuts. About half of those cuts come to defense programs, most of which were previously announced.

Obama said the alternative engine built by General Electric and Britain’s Rolls-Royce  is one of several “unnecessary defense programs that do nothing to keep us safe.” He also noted the Pentagon has resisted funding for the engine for years.

“The Defense Department is already pleased with the engine it has,” Obama said. “They do not want — and do not plan to use — the alternate version. That’s why the Pentagon stopped requesting this funding two years ago. Yet it’s still being funded.”

Pratt & Whitney built the first engine for the Joint Strike Fighter and has been lobbying for several years to eliminate funding for the second engine. GE and Rolls-Royce have put up a fierce fight to continue its funding.

The stakes are high for the companies. If funding is eliminated for the second engine, they could be effectively shut out of the largest fighter-jet market for the next 40 years, several defense industry sources said.

After several fiascos with the F-14, F-15 and F-16 fighter jets, which relied on one engine made by Pratt & Whitney, Congress more than a decade ago started an alternative fighter-engine program. The battle to build the two engines became known as the "great engine war."

The result of such battles is that one company receives a certain percentage of the engine contract and another the rest. Congress has provided funding to GE and Rolls-Royce for the alternate-engine program since 1996.

The decision on the alternative engine is one of several in the budget that could make European allies unhappy. The United Kingdom is one of the most significant partners in the JSF — and the decision to scrap the Rolls-Royce engine already caused tension during the Bush presidency, which tried without success to get Congress to end the program.

The cancellation of the presidential helicopter could also reverberate among allied countries that have eyed the Pentagon for contract opportunities. The presidential helicopter has been under contract to Lockheed Martin and Agusta Westland, a British-Italian venture.

Citing delays in the schedule and increasing costs, the White House canceled the presidential helicopter. The Obama administration allocated $85 million for 2010 to cover termination costs, efforts to look at other alternatives for a new helicopter and to extend the life of the current, decades-old presidential helicopter.

The president’s decision will not pass through Congress without a fight. A significant number of lawmakers believe that the White House should keep the current contract and buy a less sophisticated version of the VH-71.

Feathers could also be ruffled by the decision to scale down the C-27J procurement (also known as the Joint Cargo Aircraft program). The cargo plane is under contract with Alenia’s American arm. Alenia is a unit of the Italian conglomerate Finmeccanica.