GE Fights To Keep Joint Strike Fight Program Alive

By Colin Clark
Editor, AOLDefense

WEST PALM BEACH, Fla. -- General Electric, desperate to keep the second Joint Strike Fighter engine program alive in the face of Defense Secretary Robert Gates’ stop-work order, cannot spend its own money on the engines without government permission.

This may cripple the joint effort by GE and Rolls Royce to keep the F136 program going during the 90-day stop-work period that began March 24. The program had been spending about $1 million a day. Right after the Pentagon issued its stop-work order, GE pledged to spend its own money to keep the F136 engine program alive.

GE spokesman Rick Kennedy confirmed that the company is in a very hard place.

“We cannot work with the hardware. Fortunately, we were in between key engine test phases and weren't planning to run engines until mid-April. There's much design work to do driven by testing results. So that's good. But the stop work limits our ability to have engines ready for the next testing phase,” he said in an email after I asked him about the restrictions on the company’s ability to do anything with the existing engines and the hardware associated with them. His final word was a master-stroke of understatement: “It's a challenging period.”

The head of defense acquisition, Ash Carter, said right after the order was issued that the order was not irreversible and stressed that the Pentagon knew Congress would make the final decisions on the program.

But the stop work order was clearly an escalation of the battle over the program, which has received congressional funding for the last few years in the face of determined opposition from the White House and senior defense officials.

“The stop work order will remain in place pending final resolution of the program’s future, for a period not to exceed 90 days, unless extended by agreement of the government and the contractor,” the March 24 statement from the Gates Pentagon said. That last subordinate clause– “unless extended by agreement of the government and the contractor” -- may contain the key to what may be the final conflict in the second great engine war.

Given that the statement also said the second engine program “is a waste of taxpayer money that can be used to fund higher Departmental priorities, and should be ended now,” there would not seem to be much wriggle room for GE.

But the consensus of observers I’ve spoken with in the last two days is that the F136 engine program is not dead yet. It has powerful supporters in the House and Senate. They will do their utmost to slip funding into the next funding bill required to keep the government going. And there’s a decent chance they will insert legislative language requiring the government spend the money and let work continue on the F136.

The Joint Program Office overseeing the JSF program has not responded to our request for comment.

Launching in Spring 2011, AOL Defense will provide news, insight and tools about the defense sector. Follow Colin on Twitter at @colinclarkaol

Comments

[Morgantheaxe]

09:26 PM on 04/04/2011

Ok people try and wrap your heads around this. We spend more on our military than the countries with the next ten largest militaries COMBINED. If we cut our defense spending by 75% we would still spend more than China and Russia spends on their militaries COMBINED. Social Security is not paid for by federal taxes and is paid out of it's own trust fund. Medicare is not paid for out of federal taxes and is paid out of its own trust fund. You pay seperate premiums for Social Security and Medicare, so neither should be included in the federal budget and wasn't prior to the Vietnam war. They were included to dillute the impact of the military on the federal budget. Veterans benefits and services were also take out of the military budget and scattered among other federal programs. If you put Veteran's services back in the militaries budget and take out Social Security and Medicare as they did in the Eisenhower Presidency you see that the military eats up over 55% of the federal budget. We have robbed the social security and medicare trust funds to maintain this obscene military spending. Now they want to take more away from you, your parents, and your children to continue with this obscene spending. You and your familys deserve better. You do NOT have to take it.

[p456]

01:02 AM on 04/05/2011

Money and more money buy's allot of peace of mind.

[YoBear]

12:29 PM on 04/04/2011

Hard to feel sorry for a large company that evades taxes. Shame on you GE.

[donethridge]

01:56 PM on 04/04/2011

I agree with your opinion. Fact is, we (Congress) let them evade taxes. Then again, they have the best lobbyist a good tax refund can buy.

[Morgantheaxe]

09:29 PM on 04/04/2011

Amen. 5 Billion taken in and no taxes paid. Oh and they take huge amounts of your tax dollars in.

[baldmelon]

04:51 AM on 04/04/2011

anyone that votes for funding war materials should be handed a gun and an airplane ticket. if they believe that killing is so important let them go straight to the front lines. wars and the manufacturing of war materials will last about as long as a ice cube on the surface of the sun.

[otop016]

11:25 AM on 04/04/2011

Simpleton posts like yours are so comical. Let's cut the 'war materials' programs increasing unemployment by the millions. I guess all the newly unemployed can work green jobs, huh?

[donethridge]

12:03 PM on 04/04/2011

Not a bad idea on your part. How about fully funding education sparky? You know, those simpletons in parts of Europe go to college tuition free. Naturally that would NEVER work here, right?

[Marlo Stanfield]

10:39 PM on 04/03/2011

OK...so the department of defense doesn't want the engine. The White House has decided that they don't want the engine. And GE is "fighting" to keep the engine project alive? Does that mean the bribes are in the mail? Or do the powers that be take Paypal now?

[O Dannyboy]

05:26 PM on 04/04/2011

So, so many ways for the disloyal rich to steal from the people.

[hindesky]

07:58 PM on 04/03/2011

GE should not be allowed to get any government contracts till they start paying taxes.

[Mister Grumpy]

07:30 PM on 04/03/2011

Maybe GE can use some of that $2 Billion it received as a tax refund?...........

[Y2KCockroach]

03:13 PM on 04/03/2011

This is just a prelude to the budget fights that are to come.

If and when the Congress ever gets serious about balancing the budget, "defense" contracting and Pentagon budgets are going to take a huge hit (no way around it, as anyone who can do basic math has already figured out). At that point the "defense" industry is going to unleash its "army" of paid lobbyists and spin-doctors, bombarding the American taxpayer with all manner of b.s. in support of the MIC's addiction to tax dollars (eg. patriotism, nationalism, the "red" threat, the "yellow" threat, the "Muslim" threat, the "aliens from outer space" threat, the "loss of technical advantage" threat, the "loss of jobs" threat, etc.).

I personally don't see how our politicians have the gumption to stand up to the MIC and cut their addiction to public dollars. For the past fifty years (with a few exceptions during the Clinton years) the choice has always been fiscal insanity in this country. What is there to suggest it will be any different going forward?

I have seen the greatest threat to our children's prosperity and security, and it is not beyond our borders....

[April22]

02:24 PM on 04/03/2011

GE is like horse sh__, they are everywhere.

GE is one of the largest and most diversified corporations in the world dealing in electrical and electronic equipment, aircraft engines, wastewater reclamation, treatment and reuse, oil and gas technology-based equipment and services for the entire oil and gas industry - from drilling to production, transportation, refining, processing petrochemicals and plastics, agrichemicals, and finances for business loans, leasing and real estate, and I am sure there is more.

As of 2010, GE was operating in 100 countries in the US, Canada. Mexico, Latin and South America, Europe, Middle East, Africa, and Asia/Pacific countries with an annual income of $156 billion.

http://business-ethics.com/2010/07/25/1843-ge-citizenship-report-looks-toward

http://www.gewater.com/who_we_are/our_locations/index.jsp

[Thomas River]

11:59 AM on 04/03/2011

Boehner and his TP pals should be at the front lines of efforts to close this totally unnecessary program down and save the taxpayer money.

Instead, he is the #1 proponent to SAVE the program.

More proof that the so-called deficit hawks in the GOP are nothing but frauds.

[Morgantheaxe]

09:38 PM on 04/04/2011

Well hell yah he is...they build it in his district. Budget cuts are for everyone else dont ya know.

[Al Louis]

11:29 AM on 04/03/2011

Too many post drinking their own kool aid. As an organization that employs 150K+ American tax payers, you should all be rooting that this program goes forth. GE is a part of the American fabric. This competitive engine supports thousands of engineers, scientist and support personnel all across this country directly and indirectly. On another note, being a former military fighter, it's not about the lowest bidder but rather the absolute best equipment. Enough with the shortsightedness, if we allow ourselves to rely on good enough, then we will certainly get past on technology from other countries. A few already believe we can be beaten. Wake up liberals, complaining about one of our own industrial successful businesses is not the way forward.

[smokeystover39]

12:44 PM on 04/03/2011

Yawn

[Mag7]

01:10 PM on 04/03/2011

Al, GE lost the contract and Pratt and Whitney won, which also employs thousands of US taxpayers, just not so much in Boehner or Lieberman's states. Yes, GE makes great engines, but you as former military should know that two separate engines with two sets of technicians in the field and two sets of assembly tooling means double training and installation costs. It would be a political solution only, and not of any benefit whatsoever to anything else, including reality.

[SeanN]

11:23 AM on 04/03/2011

More corporate welfare. The defense budget is larded with it. Shame on GE, and shame on anyone who goes to bat for this program.

[kenhamlett]

10:34 AM on 04/03/2011

"GE is fighting for the program." I doubt that they will have to fight too hard. Their CEO is the new head of the President's Council of Economic Advisors. So, in between sharing stories with the administration about how he exported a record number of jobs and managed for the corporation to pay no taxes, he can show them an advance copy of his bid for the jets. George W. Bush and Dick Cheney must be so proud.

[mcmutter]

09:52 AM on 04/03/2011

the current f-18 is plenty good .... at 1/3 the cost .... a proven design .....

[Mag7]

01:04 PM on 04/03/2011

It's one of the best obsolete planes out there.

[mcmutter]

09:51 AM on 04/03/2011

this is your government dole in action .....

corporations fighting to make expensive military cr.ap we don't need .....

[bordway]

08:07 AM on 04/03/2011

Keep spending your own money GE, stick em in storage. See, since you make enormous profits from building these "extra" engines then pay so little if any actual taxes, we don't have any money left. We're tapped out. We may need a spare one of these days then you can pull one off the shelf. You know, JIT.