NEW YORK—Pratt & Whitney [UTX] is facing some challenges with its military-engine business as Pentagon programs including the F-22 fighter jet and C-17 cargo hauler wind down, a top executive said yesterday.
David Hess, president of the Connecticut-based company that devotes one-quarter of its work to military engines, touted progress on high-profile programs including the F-35 Joint Strike Fighter at the Jeffries 2011 Global Industrial and Aerospace & Defense Conference. Still, he acknowledged Pratt & Whitney’s military-engine deliveries are “down this year slightly.”
“We have a little bit of a challenge as we look at our overall military-engine business ahead of us here, (as) some of the legacy programs like the F-22 (come) to an end, (ramp) down,” he said.
Pratt & Whitney delivered its last F-22 original-equipment-manufacturer engine in June of this year, as airframe builder Lockheed Martin [LMT] builds the final jets for the Pentagon, which in 2009 truncated its buy of them at 187 copies. Pratt & Whitney’s engine orders also are slowing for the Boeing [BA]-made C-17, which the Pentagon plans to stop buying at 223 aircraft.
Hess described the C-17 engines’ buyers as shifting from the Pentagon to “purely international sales going forward.” U.S. law bans the sale of fifth-generation F-22 fighters outside of the United States.
Still, Hess told the conference he expects to see “some healthy growth in the C-17 aftermarket.”
“They’ve been flying C-17s obviously very hard in Iraq and Afghanistan and elsewhere around the world, for military and humanitarian missions in those instances coming in for overhauls…starting next year,” he said.
Hess also optimistically pointed to Pratt & Whitney’s work on the F-35 program and other developmental government aircraft.
The overall Joint Strike Fighter effort is under close scrutiny on Capitol Hill, with Senate Armed Services Committee Chairman Carl Levin (D-Mich.) and Ranking Member John McCain (R-Ariz.) looking into cost overruns and questioning the program’s future. Also, attendees at the Manhattan conference acknowledged yesterday uncertainty about Pentagon weapons programs as a new congressional committee prepares to meet to weigh additional longterm defense-related cuts on top of the $350 billion in reductions President Barack Obama approved last week.
Still, Hess said Pratt & Whitney has “made great progress” on the F135 engines it built for the F-35, which are beyond the development stage and now in production. The F135 is “performing very well” in a F-35 flight-test program Lockheed Martin has underway now, and has “no significant technical issues at all,” he said.
A cost-reduction program Pratt & Whitney instituted two years ago for the F135, to control rising costs facing the Pentagon, “is right on track,” he reported. The cost of the fourth low-rate-initial-production (LRIP 4) engines came down by around 14 percent, Hess said, adding he expects LRIP 5 “will be down again for that number.”
Hess touted Congress’ decision to end funding earlier this year for the alternate F-35 engine, General Electric [GE] and Rolls-Royce’s F136. The move, he said, gives his company “even more earnings and revenue growth opportunity on the Joint Strike Fighter program.”
The Pentagon’s decision to award the aerial-refueling tanker contract to Boeing in February also helps Pratt & Whitney, which is slated to build the engines, he said.
Hess cited additional, longer-term growth opportunities for his company’s military-engine business, including its involvement with Northrop Grumman’s [NOC] X-47B demonstration program for unmanned aircraft to operate off aircraft carriers.