GOP House takeover is bad news for UTC in engine fight

WASHINGTON–Dave Manke, a top lobbyist for United Technology Corp., isn’t looking forward to watching Nancy Pelosi hand the House Speaker’s gavel over to the GOP.

It has nothing to do with Manke’s political leanings, and everything to do with the pitched battle UTC and its subsidiary, Pratt & Whitney, have waged to nix funding for the so-called “alternate engine,” a component of the F-35 Joint Strike Fighter.

With Republican gains in the recent election, that fight just got harder.

UTC’s Pratt & Whitney makes the main engine for the JSF plane. But Congress has long provided funding for an alternative engine being developed by General Electric in partnership with Rolls Royce.

Pratt and GE have each spent gobs of money on a lobbying and public relations blitz over the last year, as lawmakers wrangled over whether to keep or kill the alternate engine money, a $485 million provision.

Among those who have gone to bat to preserve the GE-Rolls funding: the GOP’s presumptive new House Speaker, John Boehner, and the likely new House Majority Leader, Eric Cantor.

“We’ve had a lot of supporters who are now going to be in more prominent positions,” said Rick Kennedy, a spokesman for GE. “It’s helpful.”

GE is building its alternate engine at a plant just outside Boehner’s congressional district in Ohio. And Rolls Royce is headquartered in Cantor’s home state of Virginia, where the company is also building a new manufacturing facility.

In addition, many of the senior Republicans poised to take the helm of key House committees–the armed services and defense spending panels–are also supportive of GE’s position.

“The House was tough terrain to begin with,” said Rep. Joe Courtney, D-2nd District, a member of the Armed Services Committee and a Pratt ally in the alternate engine fight. “Having a Speaker whose district is wedded to the alternative engine is going to make it even tougher.”

But Manke says that while the incoming House leadership has lined up with GE and Rolls, he’s not so sure the newly-elected Republican rank and file will follow suit.

“You’ve got 60 guys coming in who ran against government waste,” he said, “We’re going out to all their offices where we have any connection at all and educating them on the issue.”

And in Pratt’s newly-honed pitch, Manke says he’s got a fresh advantage: the “earmark” label.

Top House Republicans have embraced a moratorium on earmarks, the pet projects that channel money to a lawmaker’s home district. A similar move is afoot in the Senate.

Earlier this week, the Wall Street Journal, in a story about the possible ban, included a graphic featuring the alternative engine funding (along with federal money for wool research and Carnegie Hall) as some of the pet projects supported by earmarks.

“This gets interesting for the Republicans if they’re anti-earmark and say we’ve got to cut government spending,” Manke said. “The question is will their members push back a little bit and say [to leadership] ‘You’re embarrassing us because this looks like a big earmark.'”

Democrats like Rep. John Larson, D-1st District, have signaled they would use the alternate engine fight to highlight tensions within the GOP over spending.

But GE is already fighting back on this front. As with Pratt, the company hasn’t waited for newly-elected lawmakers to be sworn into office before lobbying them on this multi-million dollar legislative tussle.

“We need to make sure people understand this is not an earmark,” said Kennedy, the GE spokesman. “An earmark is something that’s designed to benefit one district and to be procured non-competitively, and we are just the opposite of an earmark.”

He noted that the alternative engine money “benefits numerous districts across the United States,” and argued that it “drives competition,” where killing it would provide a monopoly to Pratt.

When the JSF program began, defense officials wanted two engines for the fighter aircraft. But since 2006, Department of Defense officials have said they no longer wanted the GE-Rolls Royce fall-back, saying the Pratt engine was on track and it was a waste of money to build both.

Congress has flouted DOD’s position, responding to GE’s pitch that the alternate engine was key to maintaining competition in the defense industry and that competition would help keep costs down for the JSF program.

The fight took on new intensity earlier this year when Defense Secretary Robert Gates said he would seek a presidential veto of the defense spending bill if it included the alternate engine funding or money for a C-17 cargo plane.

Courtney said the new make-up of the House will shift the battlefield. “It’s really going to come down to a Senate-White House play to advance Pratt’s position,” he said.

Manke said the White House veto threat gives him comfort in light of the new political landscape in Congress. But neither side would predict how the battle will unfold.

“I’m kind of nervous talking about it,” Manke said, “because frankly, these are unprecedented times and … very few things are playing out as they normally would.”