Aboulafia is a bit of a divisive figure in the industry, but I agree with his brief synopsis here;
Big engine, big questions
The A400M engine selection by itself speaks eloquently about the state of transatlantic defense relations. The general perception, probably accurate, is that the North American bid never had a chance, and that Airbus’s objective in encouraging this bid was to pressure European engine contractors on price. The Pratt & Whitney Canada bid was about 20% lower than the EPI bid, and although EPI did not meet Pratt’s price, it came down enough for European politicians to help make the case for a European solution.
Yet EPI has a difficult ride ahead. The company, a consortium comprising Rolls-Royce (28%), France’s Snecma (28%), Germany’s MTU (28%), and Spain’s ITP (16%), must create the biggest turboprop ever built outside the old Soviet Union. The first engine is scheduled for delivery in August 2005, with a first flight in September 2007, a very aggressive development schedule.
The TP400 will be an all-new engine, unlike the original TP400 proposal, which was based around Snecma’s M88 core and rejected because of poor anticipated performance. Developing a new geared turbine in this size class—greater than 11,000 shaft horsepower—will have numerous risks attached. It is unlikely that EPI will make any money on this $2.8-billion contract. And, of course, there is the big risk that the A400M program will be shelved. But if the program succeeds, with production of about 800 engines, this work would be a considerable boost to the European engine industry.
Still, subcontracting this engine to a non-European company would have spread risk and costs outside Europe. Pratt & Whitney Canada had proposed a well-defined project using the core of its PW800 jet, and the company is the historic market leader in turboprop engines (although Rolls-Royce manufactures the C-130J’s 4,600-shp AE2100, currently the largest turboprop engine). Pratt’s proposed A400M engine, the PW180, would have had a high degree of European content—about 75%, according to company officials.
One of the motivating factors behind a European engine selection was the same transatlantic tension that in part engendered the A400M itself. To be fair, the U.S. market has always been difficult for European industry. Yet the appearance of favoritism in this engine selection, along with a hasty rebuff to a North American competitor, will contribute to that tension. It can safely be assumed, for example, that Pratt’s sister company, Sikorsky, will have an easier time arguing that the U.S. should ignore any bids from European helicopter manufacturers until military contracts become a two-way street.