Alternate Engine: Facing Defeat, GE Resorts To Falsehoods

A deficit-conscious House of Representatives has refused to fund the “alternate engine” General Electric wants to build for the F-35 Joint Strike Fighter, and the Senate is likely to follow suit. GE’s campaign to secure federal subsidies for its unneeded engine is in jeopardy — which isn’t surprising, since the Pentagon has said for five straight years that it’s a waste of money. In desperation, GE has begun polluting the public debate with falsehoods about how much money its engine could save.

A case in point was the full-page advertisement in last Wednesday’s Washington Post, which stated, “According to the non-partisan GAO, competition in the JSF engine program will deliver 21% savings, which equates to $20 billion for taxpayers.” The ad includes a page from the relevant GAO report, helpfully highlighting the reference to “Total savings of about 21 percent in overall life cycle costs.”

All of the other government agencies that have looked at the alternate engine have come to less positive conclusions, labeling purported savings as “unlikely” or “marginal.” But if you read the GAO report on which General Electric based its ad in the Post, it turns out even GAO doesn’t think 21 percent savings are possible. The 21 percent savings are unsubstantiated claims about an earlier program that GAO acknowledges it has not analyzed in depth. The actual savings GAO thinks possible from the current program are in the 10-14 percent range — but you wouldn’t know that from reading the ad because GE has cropped the picture so you can’t read the full text on that page of the report.

So no one anywhere in the government is suggesting savings on the scale that GE claims. Not only has General Electric misrepresented the findings of the GAO report, but it has compounded the falsehood by applying the imaginary rate of savings to an inflated dollar value for the program — which GAO puts at $62 billion in 2002 dollars, not the $100 billion the ad states. And most of the money in the lower figure would fall outside any competition, because it consists of spare parts and support that only one company can supply. When you look at the amount of money actually available for competitive bidding and the rate of savings GAO actually calculated, you come up with a very small fraction of the amount GE claims (and even that is purely speculative).

It’s sad to see a storied company like General Electric engage in such tactics. Apparently the real facts supporting the case for buying two different engines for a single-engine fighter just aren’t very persuasive. That would explain why both a Republican and a Democratic administration have opposed GE’s engine, and why Pentagon analysts say they can’t construct a business case for buying both engines. They already have an engine that works fine, and that’s all they need — just like on every other plane the military services have developed for the last quarter century. But at least GE is honest about one thing: if Congress wants to keep developing its unneeded engine in the near term, it’s going to cost taxpayers money that won’t be available for more pressing needs. The “life-cycle” savings GE claims come in the distant future — when our kids are working to pay off all that money we owe China.