Hartford Business Journal

www.HartfordBusiness.com April 20, 2015 • Hartford Business Journal 3 Pratt's $10B Plans Military, service key to jet engine maker's growth By Brad Kane bkane@HartfordBusiness.com E ast Hartford jet engine maker Pratt & Whitney has mapped out an ambitious five-year plan that is projected to add an extra $10 billion in revenues. Pratt President Paul Adams unveiled his blueprint to grow the company's annual sales from $14.5 billion to $24 billion by 2020 at the firm's annual media day in early April. While the bulk of the plan includes boosting sales of its PurePower family of engines to com- mercial airlines, Pratt also wants to expand its military business and revamp its service contracts for all products to maximize profit- ability and customer satisfaction. In 2013, the number of Pratt commercial engines installed on airplanes worldwide reached its lowest level in 35 years due to a decline in the company's legacy products. That trend, however, will reverse itself in a big way as Pratt ramps up sales of its next generation of engines starting next year; by 2025 the number of Pratt commercial engines installed on aircrafts will reach record levels, Adams said. "We've got a great product that creates great customer value," Adams said. "We've got a great backlog." While commercial engines make up the majority of Pratt's $57 billion backlog, the company wants to generate additional revenues by taking the technology it devel- oped for the U.S. military's F135 joint strike fighter program and selling it to more foreign nations. "The [F135] program is in really good shape…We are going to continue to add cus- tomers," said Mark Buongiorno, Pratt vice president for the F135 propulsion system. Military superiority The F135 program began when the U.S. Navy, Air Force, and Marines needed a fight- er jet to replace the F-16, F-18, and the Har- rier aircrafts. So Lockheed Martin and Pratt designed three different versions of the same jet — the F-35 — that could do conventional takeoffs and landings for the Air Force, take off from aircraft carriers for the Navy, and perform vertical takeoffs and landings in combat zones for the Marines. Once the Marines start operating its ver- sion of the F-35 this summer, all three ver- sions of the jet will be in service. Pratt and Lockheed will produce 2,443 single-engine jet fighters for these three branches of the U.S. military by 2039. In addi- tion, eight other countries (Australia, Cana- da, Denmark, Italy, the Netherlands, Norway, Turkey, and the United Kingdom) partnered on the program, and will need 3,100 more air- craft in the next 24 years. "This will be the fighter for generations to come for all key Western nations," Adams said. To grow the F135 program beyond the initial partners, Pratt wants sell the fighter to more U.S.-sanctioned foreign militaries, Buongiorno said. Japan, South Korea, and Israel already have signed on. Pratt delivered 46 engines for the F-35 in 2014, but the company plans to more than quadruple that production level; it wants deliver more than 200 engines annually by 2020, Adams said. Foreign military sales, however, are extremely complicated and sensitive, Buon- giorno said. Not only is Pratt limited to sell- ing to Pentagon-approved countries, but each country weighs military purchases based on its own political and cultural systems, as well as its desire to ally with the U.S. Once the purchase is made, Pratt also must provide certain concessions, including on the production of the product, said Joe Syl- vestro, Pratt's vice president for manufactur- ing operations. When Italy decided to participate in the F135 program, for example, the country Continued (Left) A Pratt & Whitney employee works on one of the East Hartford company's jet engines. (Right, top) Mark Buongiorno, Pratt's vice president for the F135 propulsion system, said he is working to sell single-engine jet fighters to more U.S.- sanctioned foreign militaries including Japan and Israel. (Right, bottom) Pratt & Whitney President Paul Adams discusses the companies five-year plan to grow revenues by $10 billion. A Pratt PurePower engine going through testing. P H O T O | C O N T R I B U T E D P H O T O | C O N T R I B U T E D H B J P H O T O | B R A D K A N E H B J P H O T O | B R A D K A N E You'd be surprised how much more your staff can do when they're not driving to work. Your Commuter Connection Teleworking can make your staff more productive. Plus, it reduces the number of cars on the road, reducing traffic congestion and improving air quality for everyone in Connecticut. CTrides helps businesses throughout Connecticut build and formalize teleworking programs for individuals, teams or an entire staff. Let us help you – absolutely free. Visit CTrides.com or call 1-877- CTrides. A service of the CT Department of Transportation. CTRD-0172 TeleworkAd10x3.375R2.indd 1 3/11/15 10:52 AM

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