GE likely to fight F136 jet engine cancellation

WASHINGTON, April 26 (UPI) -- General Electric has indicated it will fight the Pentagon's decision to terminate a contract for developing an extra engine for the F136 Joint Strike Fighter jet engine despite opposition from U.S. President Barack Obama and senior military leaders.

GE comments in response to the U.S. Department of Defense Monday insisted the project still enjoyed support in Congress and the Pentagon decision failed to take into account full consequences of the termination.

"While we are deeply disappointed by the (Defense Department's) 'Notice of Termination,' GE and Rolls-Royce remain committed to the (engine) and the significant benefits it brings to the American taxpayer and our fighting men and women," GE spokesman Rick Kennedy told ABC News.

Kennedy said GE and Rolls-Royce will continue to work on the jet program and, with support from Congress, will continue pursuing the project for inclusion in the 2012 budget.

"We continue to be encouraged by the bipartisan support for the engine on the merits of its performance and value," Kennedy told ABC News. "There is a significant willingness in Congress to revisit the (engine) funding debate as the consequences of terminating the engine are being fully understood."

Critics of the program said influential congressional supporters could continue to back it as the project was pushed forward by a massive lobbying campaign.

The cancellation affects the General Electric/Rolls Royce Fighter Engine Team. A Pentagon news release said, "The Department of Defense (Monday) notified the General Electric/Rolls Royce Fighter Engine Team and the Congress that the F136 Joint Strike Fighter engine contract has been terminated."

It said, "The stop work order ended the expenditure of $1 million per day on an extra engine that the (Pentagon) has assessed as unneeded and wasteful."

Although the statement was intended to bring finality to a decision that provoked controversy over several years, the GE reaction indicated the controversy could go on.

Obama identified the engine as a symbol of wasteful spending. Other critics in the administration and the military decried it as an unnecessary duplication of work that was already contracted to Pratt and Whitney.

Defense Secretary Robert Gates said in May 2010 the project had been rejected by the previous White House.

"The Bush administration opposed this engine. The Obama administration opposes it. We have recommended for several years now against funding this engine, considering it a waste of money," Gates said. "To argue that we should add another $3 billion in what we regard as waste ... frankly, I don't track the logic."

Congressional backers of the program argued the taxpayers would benefit by having two defense contractors competing to develop propulsion systems for the fighter jet, as that could bring the price down.

But critics said there were no guarantees of savings and cited the enormous extra expense.

ABC News said the competing arguments helped fuel "one of the most costly lobbying and PR campaigns in Washington in recent memory." The clash came to a head when congressional leaders and the president negotiated the 2011 budget under a threat of government shutdown.

The Center for Responsive Politics said GE spent more on lobbying over the past decade than any other U.S. company.

The GE.com Web site, accessed Tuesday, made no mention of the termination.