HEINZ TRANSCRIPT (part 3): The benefits of 2 engine makers

This is the third part of the transcript from yesterday’s press conference with F-35 program chief Brig Gen Heinz. He had explained that his current models can not accurately project the benefits of a competitive engine war between the Pratt & Whitney F135 and the General Electric/Rolls-Royce F136. But I questioned his reasoning. Since the F135 and F136 are already funded, wouldn’t the competitive benefits already be built into the baseline program? Click on the jump to read Heinz’s reply.


ME: Isthere anyway to calculate – and have you calculated – how those competitivebenefits – you know, how it can improve that margin, and how many tails are youtalking about, plus or minus?

 

HEINZ: Thereis no specific way. What happens is you have to make some number of assumptions.And the aussmptions are tha tcomep wil have some benefit. Now I think I willhave some historic precedence, if you go back to the engines wars for the F-16.I think I can see from the timeframe of when there was no competition to thetimeframe of the early years when it started there was almost a 20% pricereduction. And so can Ithen translate that to what was the potential for f135 vs f136?  I don’t know but at least we should some otherassumptions. … I do believe there will be a difference in benefits from competition. I can’t tell you what thatwill be today.



I actuallybelieve it’s okay to go forward with the premise that at some point in thefuture we make an assumption that says it’s cost neutral and take the cost partout of the equation and weight the rest of the benefit.

 

REUTERS: So[reducing] operational risk is one benefit?

 

HEINZ: Ithink operational risk is one benefit. I also truly believe that you’ll see muchmore technology push from 2 manufactures because they are always going to becompeting with each other to try to win back more quantity. And part of the wayyou do that is you either produce more efficient blades, introduce fuelsavings, you introduce thrust growth –a whole bunch of other benefits thatresult. Lower operating cost. More technology insertion sooner because thecompanies are willing to make the investment to try to get market share.

 

ME: To playa little devil’s advocate with that -

 

HEINZ:Sure.

 

ME: — inthe original engine war you had a single company that started out and thenanother company that was called on to enter the market and was funded, and thenthe price came down. In this case you already have two manufacturers alreadycompeting. So how would you get that – presumably, the competitive benefit hasalready been built in to their program since they are already in competition.And if one goes out, could the price of the one that’s not in competition anymorerise 20%? Wouldn’t the competitive benefit already be built into the program?

 

HEINZ: Ithink because of the difference in the development timeline that it has not yetbenefited. Pratt is not truly competing with GE yet for the market sharebecause I only have Pratt engines up through LRIP 4. or through LRIP 3. We’regoing to introduce, if Congress fully funds in the FY10 budget, 4 GE motors butthat’s four out of over 30 motors I am buying next year. So they are justbeginning to have competition. My point is that I do not believe yet that Prattfeels compelled to act as though they are in competition, which they would saydifferently – I’m sure they would. But I think the real competition occurs whenno kidding you’re both making the engine, and you’re both getting a chance tobid on that price in a particular lot and that’s when you see the real benefit.And that’s what has not yet occurred.

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4 Responses to HEINZ TRANSCRIPT (part 3): The benefits of 2 engine makers

  1. ELP 3 June, 2009 at 11:00 pm #

    The F-16 isn’t the best of comparisons. It was an effort driven by Congressional Pork. Note that the two-engine setup for the F-16 was not a perfect drop in setup, You had to have big mouth and small mouth F-16s (except for a few early Block 30s that tried this out with the small mouth GE)… and other appliances were motor maker specific. Not really a comparison to a F135 or F136 which is supposed to be drop in.

    We had two engines for the F-16 in the 90′s during the procurement holiday. You know what caused a big engine related grounding?…. A PowerPoint warrior trying to find “savings” in an engine sustainment program that was funded well and operating well. The little group thinkers pulled money from that program for something else and about a year later planes started engine failing and being grounded.

    Since there was no perfect drop-in setup between GE and PW you couldn’t just chuck in the other engine vendors motor. Also the F-16 goofs deployment logistics because you need to take two different motors to war and match them to a specific mixed community of GE or PW jet squadrons at the war theater.

    So using the F-16 two motor topic as a comparison shows the persons absolute lack of knowledge on the topic.

    It will be interesting to see where this all goes… the GE/Rolls F136 may turn out fine. Problem is that it is behind the PW on its tick off’s of testing. For example all the flight tests have been with a PW motor. So at some point there will be a whole sector of flight testing just to get the F136 motor up to qual.

    If the F-35 program gets into trouble because it couldn’t get airframes built in enough quantity early- on to keep price/cost down because we had to fund the F136 motor…. Well, we were warned.

  2. irtusk 4 June, 2009 at 1:28 am #

    try not to let your hatred of the F-35 overwhelm you and instead actually pay attention to what he said

    > Also the F-16 goofs deployment logistics because you need to take two different motors to war

    well we seem to have managed it just fine for over 20 years

    > Since there was no perfect drop-in setup between GE and PW you couldn’t just chuck in the other engine vendors motor

    he never said you could

    the competition was at the time of procurement, they would either buy a batch of block X0 (GE) or block X2 (PW) fighters based on who submitted a better bid

    he specifically said “I think I can see from the timeframe of when there was no competition to the timeframe of the early years when it started there was almost a 20% price reduction”

    are you saying he’s lying?
    have you looked at the charts and determined he misinterpreted them?

    they instituted competition and suddenly there was a 20% price drop

    that seems pretty clear to me

    and as you so wonderfully pointed out, you will be able to swap engines in the F-35 unlike the F-16, thus there will be EVEN MORE COMPETITION for the F-35

    suddenly that 20% price drop looks pretty conservative

    > Since there was no perfect drop-in setup between GE and PW you couldn’t just chuck in the other engine vendors motor

    again you make the argument that an alternate engine is EVEN MORE VALUABLE to the F-35 than the F-16

    if the alternate engine was worth it for the F-16 (and it was), it will be even more beneficial for the F-35 since the ability to swap engines BOTH increases competition AND allows for the fleet to keep flying if one engine is grounded

    > So using the F-16 two motor topic as a comparison shows the persons absolute lack of knowledge on the topic

    no, it just establishes a baseline that even with the limits on competition, they still achieved a 20% cost savings

  3. ELP 4 June, 2009 at 12:01 pm #

    The concept of the F-35 alternate engine for any airframe. THAT is a great thing if you want to go that way. THAT is the only combat justification for an alternate engine jet, that you can put in either a PW or a GE in any airframe during war.

    The F-16 had groundings via engine type and guess what? They couldn’t just put in a PW engine in a GE airframe or vice versa. Savings is pretty hard to gain when you have to take two motor types and two airframe types of the F-16 on all those deployments over the years and have no clean swap out. No wonder the USAF is broke with thinking like that. Saving one color of money while wasting 3 other colors of money. A DOD tradition.

  4. irtusk 4 June, 2009 at 2:37 pm #

    > The F-16 had groundings via engine type and guess what? They couldn’t just put in a PW engine in a GE airframe or vice versa

    so you’re saying you don’t support buying any more F-16s? glad to hear it

    > THAT is the only combat justification for an alternate engine jet, that you can put in either a PW or a GE in any airframe during war.

    even on the crude level, if one engine is grounded, it only affects part of your fleet instead of ALL your fleet

    > No wonder the USAF is broke with thinking like that

    So, how much does carrying a 2nd engine actually cost the USAF?

    Does that cost overwhelm the lowered procurement price?

    Until you can actually show some numbers, your argument rings hollow

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