updated 8/23/2005 8:11:17 AM ET 2005-08-23T12:11:17

General Electric Co. has won a $2.4 billion contract to develop an engine for the military's next-generation stealth jet fighter.

The contract is the largest military developmental contract in about 20 years for Fairfield, Conn.-based GE's jet-engine division, GE Aircraft Engines, which is based in this Cincinnati suburb and employs about 6,800.

GE was named the majority partner in a 60-40 joint venture with British engine-maker Rolls-Royce. The deal was announced late Monday by the Department of Defense under a Navy program that is administering development of the Lockheed Martin F-35, known as the Joint Strike Fighter.

The jet will be powered with Pratt & Whitney engines until 2012. After that, GE Aircraft Engines and Rolls will compete with Pratt & Whitney for engine placement on the F-35.

The United States and foreign air forces will select either the Pratt & Whitney engine or the GE/Rolls engine as they order individual batches of F-35s.

About 6,000 F-35s may be built over 30 years, GE said. Lockheed Martin is designing the plane to replace several aircraft including the F-16 and F/A-18.

"This is going to be the mainstay of our military engine business going forward," said GE's Jean Lydon-Rodgers, program director of the new F136 engine, which would be installed in the F-35 plane.

Bethesda, Md.-based Lockheed Martin has already produced a prototype of the plane, expected to cost between $28 million and $40 million apiece. The first planes are expected to go into U.S. service in two years using the Pratt & Whitney engine.

GE Aircraft Engines is expected to earn $13.3 billion in revenue this year, with about $3.8 billion, or 28.6 percent, coming from military contracts.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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