02 Feb 2010
Rolls Royce is facing the scrapping of a major jet engine deal set to earn the company and its partners £30 billion over the next 20 years.
Despite strong lobbying by the British company over the past six months, Robert Gates, the US defence secretary, and President Barack Obama are determined to axe the proposed second engine for the Joint Strike Fighter jet programme.
The planes are set to become standard issue for the US, Britain and several other European countries over the coming decades.
Congress has already resisted one effort by the White House and Pentagon to cut the second engine, which Rolls Royce is developing with General Electric, in a bid to keep the promise of jobs in the US. Loss of the contract could also deprive Britain of hundreds or thousands of jobs.
Supporters of the second engine say it encourages efficiency and competition, but opponents say it has run over cost and behind schedule and was always a luxury. The main engine is being built by Pratt & Whitney.
Other British firms are involved in the F-35, which is a multi-national project involving eight countries.
A spokesman for the British embassy in Washington said: "We appreciate the strong US support for the JSF programme, which remains a central part of UK plans, and in which we have a considerable investment.
"Continued funding for the second engine programme is, as ever, a matter for discussion between the administration and Congress in the context of this year's US defence budget. But we continue to believe in the competitive advantages of a second engine."