Pratt & Whitney Co.’s CEO says the United States’ drive to pare its military budget may slow the growth of Pratt’s sales of engines for the upcoming F-35 Joint Strike Fighter, Reuters reports.
“Certainly with the deficit, there’s going to be pressure on military spending,” David Hess, who heads the East Hartford division of United Technologies Corp. told reporters in Hartford. “We may see the ramp up of the Joint Strike Fighter program be a little bit slower than we had anticipated, but it’s still going to be a growth program for Pratt.”
As for the company’s geared turbofan – its latest generation of jet engines developed in Connecticut – Hess said Pratt will use less of the supply chain from Connecticut and more on international sources than its current supply chain, although some of the parts will have to come from in-state.
While the development of the geared turbofan for its various uses will be done in East Hartford and Middletown, mass production of the engines will be done close to customers, such as Bombardier in Canada and Japan’s Mitsubishi.
Defense Secretary Robert Gates on Thursday outlined plans to cut the nation’s defense spending by $78 billion over five years, including restructuring the plan for the F-35, made by Lockheed Martin Corp.
Pratt has been battling in Washington against rivals General Electric Co. and Rolls-Royce Group’s proposed alternate engine for the aircraft, which the Obama administration says is unneeded but GE officials say could cut the program’s costs over time by offering competition.
The company, which also makes engines for corporate jets, expects it to take at least another year for demand for business aircraft to recover from the hit it took during the worst economic downturn since the Great Depression.
“We’re through the trough and we’re starting to see recovery. We expect to see stronger recovery in 2012 in business jets,” Hess told reporters after addressing a meeting of the Connecticut Business & Industry Association.
Corporate jet makers including Textron Inc. have also been hit by the drop in demand.
UTC CEO Louis Chenevert in December told investors he expects Pratt & Whitney to record “flattish” sales and see its operating profit decline by about $50 million in 2011, reflecting sluggish demand for engines for business jets.
The slow recovery in demand reflects the sluggish condition of the U.S. economy, Hess said.
“It’s a little bit slower than we’ve seen in the past because corporate profits are recovering slower than they have after previous crises,” Hess said.
