GE, Rolls Royce drop effort to build F35 engines

Reuters News
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Posted: Dec 02, 2011 11:48 AM

(Reuters) - General Electric Co and Rolls Royce are dropping their effort to build an alternate engine for Lockheed Martin Corp's F-35 joint strike fighter, giving up on what they said could be a $100 billion market.

The decision to end their funding of the project beyond 2011, which the companies announced on Friday, is a boost for United Technologies Corp's Pratt & Whitney unit, which builds the engine used in F-35's early production models.

The Defense Department earlier this year canceled funding for the second engine. That led GE and Rolls Royce to say that they would fund it themselves for the rest of this year and fiscal 2012.

"The decision, reached jointly by GE and Rolls-Royce leadership, recognizes the continued uncertainty in the development and production schedules for the JSF program," the companies said.

GE said the companies spent tens of millions of dollars on the project in 2011. Since 1997, the government handed out about $3 billion for alternate engine development, GE said.