General Electric says it is willing to shoulder more of the cost of developing next-generation engines and fuel-saving upgrades for fighter planes, helicopters and warships as U.S. defense spending declines.
Jean Lydon-Rodgers, vice president of military systems at GE Aviation, said the company remained a dominant player in the military engine business, despite the cancellation last year of the F136 alternate engine it was developing for the F-35 Joint Strike Fighter built by Lockheed Martin.
For instance, GE engines power Boeing Co’s F/A-18 Super Hornet, which is generating continued orders in the United States and abroad and the F-15 fighter, which just got a huge Saudi Arabian order that will extend production to 2017.
The Pentagon’s plans to cut spending by $487 billion over the next decade pose challenges for defense contractors, but GE says it still sees great promise in its work on several of the U.S. military’s advanced research and demonstration programs for new, greener, sixth-generation turbine engines.
“Our investment as a defense contractor actually has to increase at this point in the process because of the very limited dollars available for new platforms,” Lydon-Rodgers told a news conference, adding that the company’s robust commercial business gave her more of a cushion for increased investment in next-generation military technology.
“I will admit these are challenging times, and the key for us is making the selective bets,” she said, adding that GE saw good prospects in combat aircraft and helicopters.
“We obviously have to be prudent in the investments that we make. We have to … figure out the best way to spend our money and to do it in the most synergistic way with our commercial engines.”
The company plans a core engine test in early June of the Pentagon’s next-generation jet engine early development program, the Adaptive Versatile Engine Technology (ADVENT), which would go 30 percent farther and burn 25 percent less fuel than current jet engines. A full engine test would follow in January 2013, she told reporters.
GE said it was increasing its share of the cost of developing the new engine technology and ramping up its engineering team, with an eye to delivering an engine by 2020.
GE, the largest U.S. conglomerate, invests about $1 billion each year in internal research and development, of which about $600 million was applicable to the military engine market, and expects to maintain that level of funding in coming years, company officials said.
Lydon-Rodgers said some developments, like new ceramic matrix composite materials, had grown out of the company’s military work, and were now helping GE develop better commercial engines. The robust commercial market, in turn, was making it possible for GE to continue investing in military engines, drawing on its experience with those same materials.
That in turn, reduced the risk on the military engines and help accelerate that development work, she said.
Lydon-Rodgers said GE’s investment in the alternate F-35 engine had not been wasted, given that it resulted in development of some new materials.
“All in all, those were investments that were wisely made,” she said. “They were selective bets at the time, but I also believe they are benefitting us as we move forward.”
The U.S. Army is hoping foreign sales will be sufficient to keep tank factories up and running until the Army needs them again in 2017.
At a Feb. 17 hearing of the House Armed Services Committee, Gen. Ray Odierno, chief of staff of the Army, told lawmakers the service is being aggressive in its Foreign Military Sales (FMS) program, with the hope that foreign buys will fill in any production gaps caused by the Army’s plans.
The Army says its M1 Abrams tank fleet is in good shape and it will not need to refurbish its current tanks until after 2017. This leaves a gap in work for the General Dynamics Land Systems production facility in Lima, Ohio.
At a minimum, the factory needs to build seven tanks a year to stay open.
This “is far beyond not just our fiscal ability, but is far beyond our need,” Army Secretary John McHugh told the congressional panel.
Odierno said it would cost the Army $2.8 billion to keep the production plant open between 2014 and 2017.
“Our tank fleet is in good shape,” the four-star said. “Because of the great support we’ve gotten over the last few years, we don’t need to reset before 2017.”
Odierno and McHugh did not name which countries may be interested in buying Abrams tanks.
The Army first asked to halt its buy of Abrams tanks in the 2012 budget request. However, it lost the fight and Congress provided an additional $255 million to buy 42 more M1 Abrams tanks in the budget.
The Army maintains that a temporary shutdown would result in savings for the government, while the company and several members of Congress say it would cost more to shut it down and reopen it than to just keep it open during that same time period.
“How can the Army be sure that the production lines, and particularly the skilled workers, are going to be there after such a lengthy shutdown?” Rep. Silvestre Reyes, D-Texas, asked.
McHugh said the Army is concerned about the same issue and is working with the Defense Department to identify where the most acute vulnerabilities are in the industrial base.
He said DoD is conducting a study that looks at every tier and every sector of the defense industrial base, with the goal of finding a way to address these problems jointly, rather than each service going it alone.
“We’re willing to pursue any reasonable path to ensure that those particularly critical jobs remain vibrant,” McHugh said....