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(Click to enlarge 2100×1500)

$3B taxpayer’s money already down the drain.

The Pentagon has issued a stop work order for a controversial second engine for a futuristic jet fighter, calling the engine, which has already cost billions, a “waste of taxpayer money” – but General Electric has vowed to press forward with development using its own funds.

GE has taken a never-say-die approach to the engine. GE chairman Jeffrey Immelt wrote a note to aviation workers after the February House vote to stop funding that said, “GE will continue to press our case in the U.S. Senate and elsewhere.”

General Electric has already shelled out millions in relentless pursuit of the engine contract, and its most recent vow to fight on is the latest evidence of the company’s aggressive strategy for Washington influence. It is an approach that has helped GE become the nation’s top corporate spender on lobbying, spending more than $238 million on lobbyists over the past 12 years.

An ABC News review of General Electric lobbying found that the company has more than angels on its side — it has an arsenal of former congressional leaders from both parties, including such well-known figures as former Sen. Trent Lott and former Rep. Dick Gephardt.

Last year, GE also hired Barack Obama’s former campaign manager, David Plouffe, as a consultant, according to Plouffe’s recently filed financial disclosure forms. It is unclear what Plouffe was hired to do, though his relationship with the president and senior White House staff is close to unparalleled. Plouffe is now back working as a senior advisor to Obama.

The DOD doesn’t want it, saying the Lockheed fighter is fine with the Pratt & Whitney engine. Congress doesn’t want it, but GE by golly is going to spend more millions lobbying to get the contract.

Why has Congress spent $3,000,000,000 on development of an engine the military says it doesn’t want? See the article for the video.




  1. sargasso_c says:

    An extraordinarily ordinary plane.

  2. bobbo, I just unplugged my shades says:

    Gates was great: “Only in Washington does “everybody wins” equal competition.”

    Its hard to tell but weren’t those two engines in competition for the contract and GE lost? And then they get paid to develop the engine anyway? Sounds like fraud/corruption/kickbacks to me.

    YOU KNOW: Standard conflict of interest policies would stop this==if Congress were anything other than a walking talking conflict of interest.

    Its all a long running fraud with the voters losing every year they vote their “values” rather than their pocket books. Silly Pukes.

  3. HG says:

    #1 “An extraordinarily ordinary plane.”

    Yes, but remotely “piloted” drones are the future. They’re much safer and provide a game-like abstraction of real face-to-face human combat. Sort of like “War of the Worlds” come true, eh? Sad.

  4. Dallas says:

    Well, we do need to entertain the sheeple at the air shows so they’ll give up healthcare and choose this instead.

  5. sargasso_c says:

    US aircraft have US-only weapons pods. Software, maintenance and upgrades are locked in to US companies. The big selling point of the Saab Grippen for example is that it does 98% of the F-35 at a fraction of the cost, has field interchangeable ordinance pods and you can source weapons from any country you are friendly with. There is also a carrier version in development. So there is competition, despite what GE say.

  6. CrankyGeeksFan says:

    This just was published in the New York Times March 25, 2011: http://nytimes.com/2011/03/25/business/economy/25tax.html?src=me&ref=homepage

    GE made $14.2 billion in profits worldwide and $5.1 billion in the U.S. GE has claimed a tax credit of $3.2 billion. They don’t pay federal income tax. GE’s inhouse staff is considered “the best tax law firm in the world”. GE’s CEO was named the head of the President’s Council on Jobs and Competitiveness in January.

    Great articles.

    [If you’re going to paste a link in a comment, get rid of the “www” so the whole link will be underlined. The browser can figure out what it is.   Ed.]

  7. KD Martin says:

    Its [GE’s] extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm.

    A former treasury official? And I’m stuck with Turbo Tax? Guess I need to make a few billion more next year.

  8. nobody says:

    #6 – thats the point, fighters are normally sold to foreign governments at cost. It’s the 20year contract for servicing, upgrades, support etc that makes the real money. It also ensures the customer doesn’t forget whose side they are on

  9. deowll says:

    Did any of you also catch the news that the Presidents good friend and staunch supporter, GE, didn’t pay a penny of tax on billions in revenue last year?

    While I feel that corporate the income tax is way to high at least in part because almost all nations charge less and that makes corporate taxes a sort of tariff against American manufacturers, I must state that selling GE enough loop holes they can drive everything through them is pure corruption in its most refined form.

  10. What? says:

    “We being good thing to life(tm)”, like death from above.

  11. Cap'nKangaroo says:

    Competition is a bad thing? Having no choice if a design flaw/fatigue problem/etc occurs is the best solution? The single engine provider wouldn’t have the US Air Force, Navy and Marines (not to mention all the foreign buyers of the F-35) over a barrel if the couldn’t meet production or wanted a higher price?

    The future US military will have two fighter-class jets, the F22 and the F35. The P&W F119 engine powers the F22 and its derivative (the P&W F135) is the military’s choice for the F35. Any problem with one that requires grounding the engine will most likely require grounding of the other.

    How screwed would the US Air Force have been if Airbus did not compete with Boeing for the air refueling tanker contract? The original lease deal was highway robbery. After a couple more tries (and calling do-over when it lost), Boeing finally came back with a bargain basement price. This would never have happened without the competition.

  12. nobody says:

    #12 – I think that’s a common axiom in military procurement. Why build one when for only three times the price you can build 2!

  13. KD Martin says:

    nobody said,

    “#12 – I think that’s a common axiom in military procurement. Why build one when for only three times the price you can build 2!”

    Wasn’t that from the movie “Contact?”

  14. foobar says:

    BTW, GE pays exactly $0 in US corporate income tax.

  15. MikeN says:

    No coincidence they pay zero income tax.
    Don’t worry under the fascist government being planned, GE will serve the state as well. They have already committed to buying half the production of the Chevy Volt.

  16. Cursor_ says:

    Oh but corporations have our best interests at heart right?

    That’s why so many conservatives want to limit government and let the private sector take over.

    Its a good thing right?

    Cursor_

  17. Specul8 says:

    Seems to me that our biggest problem is Lobbying.
    It’s just another word for organized, legal bribery.

  18. Animby - just phoning it in says:

    I understand that I am simply naive but it seems to me that procurement should work a little differently.
    1) establish a need
    2) go to bids
    – bid price to include all research and development
    – bid must also include demonstration of ability to fulfill contract
    3) award contract to best bid
    4) enforcement of bid terms
    – on time delivery else penalty assessed
    – no exceeding bid price except if major changes by contractor
    – performance as specified in bid terms; penalties for failure

    Ahhhhh. A dream, I know.

  19. Animby - just phoning it in says:

    Sorry – what I meant to include in my comment is that we should not pay for development. That cost should be built into the bids.

    Development of top secret weapons? That should be covered by the Pentagon’s black budget. We know they have one.

  20. bobbo, I just unplugged my shades says:

    It used to be the fact that competitors were paid to develop a product to meet certain specs as presented in a working model. This approach allows for the creativity of the for profit private sector while recognizing the reality that no company has the assets, lack of business savey, to invest millions in a prototype on a 50/50 or lower bet they will win the contract.

    Blackops/Skunkworks is an alternative that has worked nicely as well and more fitted for products we don’t plan on selling to the world market.

    As usual, not one rule fits all but a multitude of approaches. Its a good thing.

  21. Dallas says:

    #16 Here we have MikeN, sheeple blogger at large, complaining about the very outcome he votes into office.

    Fueled by corporate dollars, the GOP and Teabaggers installed a Supreme Court allowing UNLIMITED for corporations to pick and choose their government and legislation.

    We have not even begun to see the outcome of this disaster. However, the ignoramus are quick to complain about the fallout.

  22. jescott418 says:

    GE never paid a cent in taxes too. Go figure.
    More Obama BS. When are taxpayer’s going to learn their is no such thing as different in Politics. Obama is just more of the same. Reward big buisness and make tax payers pay for it!

  23. bobbo, I just unplugged my shades says:

    Good call Dallas. But aren’t sheeple more passive than the active malice MikeN foists on society by his active shilling?

    I guess after several years, we have a question Pedro might actually have some insight on?

    Ha, ha.===Just kidding!

  24. Animby - just phoning it in says:

    #24 Bobbo – Please do not feed the trolls.

    # 22 Dallas said, “GOP and Teabaggers installed a Supreme Court”

    Dallas, please name one justice whose appointment was aided by the Tea Party.

    Just one.

  25. bobbo, I just unplugged my shades says:

    #26–Ready==interesting point. I wonder what the largest “legislative” body is? and the larger something gets, the more it has to be divided up and parsed out–don’t know if anything run by hoomans is ever much different than anything else run by hoomans.

    #27–Animby==since I seconded Dallas, I feel your criticism is directed at me as well. Dallas and I recognize it was the “Republican and the Teabagger” PHILOSOPHY of corporatising America against the interests of the common man that Consolidated United represents. for any error in this analysis that you want to quibble about, there is no doubt the harm this decision will cause to America has not even nearly begun to play out.

    Think a turd in a punchbowl but you can still drink out of the far end. Surely you can see farther than the end of your nose?

  26. deowll says:

    Aminby, a huge part of the problem is that they do keep changing the requirements.

    They will start off wanting a nice little remote controlled plane with a wireless connection for a camera. We could have done that for less than 50,000 but by the time they got through it had the wing span of a full sized plane, could fly staggering distances, was highly stealthy and they were sticking weapons pods on the things.

    Of course we now have so many sizes and types of drones that I’m not sure we even know how many we do have. I do know that most of what we originally wanted done could have been achieved with something vastly cheaper than much of what we are now making.

    Simple fact, Fed gov spending is going to implode because in the not to distant future we are either going to be spending much less money or the value of the money we do spend is going to be almost nothing or even nothing.

    The reason is very simple. We are running the Fed gov on borrowed money or quantitative easing which is just inflating the supply of paper on the books and once lenders decide that buying our dept is not going to pay off for them they will stop buying our dept which leaves quantitative easing and the more paper in circulation the less it will buy.

    What about raising our taxes? Dudes we are heading for the point where 100% of GNP would not cover what we are spending.

  27. bobbo, I just unplugged my shades says:

    Just for grins, can’t find a chart of the size of the ruling bodies around the world, so I just looked at China. I could easily be wrong, but it looks like a country of 1.3 Billion is governed by a body of 9? Not the same thing of course.

    http://fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country-profile/asia-oceania/china

    What do the experts say on the “span of control” for most activities? I seem to recall Peter Drucker saying it was around 20. Good to compare with the military and its organization? Browswer not connecting right now or I’d look some more.

  28. Glenn E. says:

    “DOD doesn’t want it…. Congress doesn’t want it”

    That’s just bureaucratic code speak for “come bribe us”, “bribe the living sh*t out of us”. The top DoD brass don’t care whether something is cost effective or practical. And certainly the US Congress hasn’t a clue. They rely on the DoD to advise them. And the advice they’re getting is probably, “ring the god damn dinner bell as hard as you can”. IOWs, make sure GE wines and dines you well, before “caving in”, and demanding DoD accepts their expensive new engine. How do you think that dangerous flying death-trap, the V-22 Osprey, got pushed thru? With the millions they spent making that a workable design, they got have built hundreds of the older aircraft it “replaced” (CH-46E and CH-53D). But wait! They haven’t actually given up on the older workhorses. There’s a program to upgrade their design to the CH-53X Super Stallion. And have them really by 2021. So the term “replace” is a matter of lobbying, not logistics and engineering. Actually it’s pure BS for public consumption.

  29. Animby - just phoning it in says:

    #28 Bobbo – I have a knee jerk reaction to Dallas. His automatic response to anything is to blame the Republicans. As if every Democrat in the Congress has a wallet untainted by graft. Why is it so many members of Congress enter office as upper middle class and leave worth millions? While it’s true there are more Repubs on the Supreme bench, a quick search will show they all tend to vote more liberally than expected.

    #28 deowll, you are, of course, correct and you’ve put the situation into words even I can understand. As a frequent contractor to the State Department (USAID) I well know the abrupt and sweeping changes the government will ask for. And, if you ever want another contract, you better find a way to do them. Admittedly, they are generous with additional payments to cover any increase in costs but, to me, it just shows poor planning. They should think before they ask for bids.

    # 31 Glenn E. said, “That’s just bureaucratic code speak for ‘come bribe us'” I am in harmony with your comment but I think it’s a bit overboard in this case. Gates has always been against this project and has never been shy about saying so. While I’m not overly fond of the man, I don’t think you can point to any hint of graft on his watch.

    As for the congressturds pushing for this project, I think you’re probably right on the target. Only, not so much direct payments as GE donations to campaign funds, and thousands of GE employees going to the polls to vote for jobs, jobs, jobs, jobs – theirs. And, of course, when they leave Congress, they will undoubtedly find high paying jobs with GE or one of it’s divisions. Most will probably come back to DC as lobbyists.

    Bobbo – I’m not defending the Repubs or the Tea Party and certainly not the Dems. I hate them all! More or less equally. You know the scenes in the movies of people in Jail talking to their families or attorney through a glass on a monitored telephone? I would support a law that made a similar method the only one permitted for lobbyists and Congress.

    Or better, yet, reduce the $175K salary they start at, to a subsistence level and reintroduce the citizen representative. Two term max and at least 10 years before they can work with a government contractor. They have a better health plan than most citizens, luxurious facilities from meals to gyms (for which they pay a pittance) and – did you know they only have to serve for five years before they are eligible for pensions? The whole representative government system is just out of control.

    I’d better stop before I say something that gets me on the no-fly list…

  30. bobbo, I just unplugged my shades says:

    #32–Animby==good post. Please copy me specifically on the one that does get you on the no-fly list, I’d love to read it.

    But please educate me: where can I find the evaluation that all the members of the SC vote more liberally than expected?

    I could take a page or two parsing THAT statement.

    Ha, ha.


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