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Pentagon issues 90-day stop-work order on GE-Rolls engine

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The U.S. Defense Department on Thursday directed General Electric Co. and Rolls-Royce Group Plc to halt work on a second engine for the F-35 Joint Strike Fighter until there is more explicit direction in the fiscal 2012 budget.

About 2,500 jobs—including hundreds in Indiana—are tied to the engine's development. If GE and Rolls-Royce reach their projected peak production, that figure could increase to as many as 4,300 jobs, according to Rick Kennedy a spokesman for GE Aviation.

The Pentagon in a statement said the stop-work order applied immediately for 90-days, halting the expenditure of $1 million a day for an engine the military has said consistently since fiscal 2007 it does not want. The order doesn’t terminate the program, however, the Pentagon said.

Stopping the expenditure is “now the correct course” of action, the Pentagon said. The stop-work orders stays in place “pending final resolution” by Congress of the program’s future, the Pentagon said in a short statement.

There is no money for the alternative engine in any of the various pending legislation to fund operations this fiscal year.

The House voted last month to strip $450 million for the second engine from the fiscal 2011 Pentagon spending bill, which Congress has not yet passed.

More than half of the new Republicans in the U.S. House of Representatives joined in the 233-198 vote to kill funding

If the program is not funded, the decision could have a big impact on the Indianapolis operations of Rolls-Royce, which is the city’s second-largest manufacturer behind Eli Lilly and Co., with about 4,300 employees. Company officials estimated the engine program could have supported hundreds of jobs in Indiana.

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