Wednesday, April 13, 2011

Arrogant GE (GE) Refuses to Halt 2nd F-35 Jet Engine

Government Electric General Electric and partner Rolls Royce (LSE:RR) are arrogantly ignoring the fact that the Pentagon issued a stop-work order for a second engine for the Lockheed Martin Corp (NYSE:LMT) F-35 fighter jet the two companies are working on, a culmination of five years of battling to get the work stopped by the Pentagon.

GE spokesman Rick Kennedy said in a statement, "We will work closely with our congressional supporters to bring competing JSF engines to the fiscal 2012 budget process."

"With the development program nearly complete, we have no intention of abandoning this engine."

In an unproven and dubious statement, Kennedy added that House and Senate leaders were encouraging the company to continue the battle, saying lawmakers would look at the issue again in the fiscal 2012 budget.

As the Pentagon said, this is "a waste of taxpayer money that can be used to fund higher departmental priorities."

United Technologies Corp (NYSE:UTX) unit Pratt & Whitney responded to General Electric allegations it had cost overruns of $3.4 billion, saying $2.7 billion of that was from changes in requirements by the Pentagon; an assertion the Pentagon doesn't deny.

General Electric is also attempting to make it look like they are victims of the government in that the initiative was encouraged by lawmakers for General Electric to start work on the second engine. The problem is, of course, is the Pentagon has said for five years they don't want it. What part of no and taxpayer was doesn't no-tax-paying General Electric get?

General Electric has gone to way of government projects which offer tax breaks as their major focus, probably the reason they've performed for miserably under CEO Jeffrey Immelt.

Maybe General Electric needs to get some swagger back again by competing in markets not guaranteed by taxpayer dollars and subsidies, as it may find they have to actually work at generating revenue and earnings, not have it handed to them on a silver platter by its lawmaking buddies.

General Electric closed Tuesday at $20.01, falling $0.17, or 0.84 percent.

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