Defense Cuts Could Cost Rolls-Royce

Published: Feb 02, 2006
Source: www.washingtonpost.com



During a regularly scheduled video conference with President Bush just before Christmas, British Prime Minister Tony Blair raised a sensitive issue -- a Pentagon budget-cutting proposal that could cost Rolls-Royce PLC, one of Britain's premier companies, billions of dollars.

Word had leaked that the Defense Department was recommending the elimination of one of two engines it is developing for the Joint Strike Fighter, the F-35 jet expected to become the most widely used fighter in the world. The move would save the Pentagon about $1.8 billion over the next several years, according to Loren Thompson, an industry official familiar with the proposal. But it has upset Britain, a close ally that has invested $2 billion in the project and is set to buy more than 100 of the planes.continue..