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New Pratt engine holds high risk factor

With so many dark blots on the Canadian aerospace scene, Pratt and Whitney Canada Inc. has long been the darling.

While other aerospace companies are among the worst Canadian corporate disasters, Montreal-based Pratt and Whitney captured a world market in the 1950s with an innovative engine that still sells well today.

Canada is now gambling $100- million that Pratt, a unit of United Technologies Corp. of Hartford, Conn., can work its magic again by developing a new engine for light helicopters.

But some observers suggest that while Pratt and Whitney has an excellent track record, the market situation is different in this case. This, they say, could make the prospects for success this time bleaker and the Government’s investment riskier.

While Pratt’s earlier engine was revolutionary and created a whole new market for itself, the engine Pratt is now developing is considered similar to other, already established light engines and it will be competing against them in a depressed market.

Elvie Smith, chairman of Pratt and Whitney Canada, is confident that his company can beat the competition. Pratt’s new engine will offer better fuel consumption and a very high degree of reliability, he said. He also said the engine will be cost- competitive.

The success or failure of the new engine will greatly influence the fate of another Government-financed project – the production of a new line of helicopters in Montreal by Bell Helicopter Textron Inc. of Fort Worth, Tex.

Two of the new Pratt engines, called the PW200, will be installed in the new Bell helicopter. In addition to the $100-million Canada is investing in the Pratt engine, the Governments of Canada and Quebec are putting up a total of $275-million of the $409-million in development costs for the new Bell helicopter.

While such major subsidization of a new line of best drone for the money is risky, Canada appears to be adding to the risk with its decision to also fund the development of a new engine to put into the machine.

This will inevitably drive up the price of the new Canadian- built helicopter in a very tight market, according to David Smith, general manager of Air Logistics, a Louisiana-based company with a fleet of 200 helicopters.

He said helicopter operators such as his company are fighting for survival and must keep their operating costs as low as possible.

Apart from the higher cost of purchasing a helicopter with new engines, the operating costs on a new engine can be three times as high, making it financially unfeasible, Mr. Smith said.

Similar doubts about the prospects for the Canadian-financed helicopter project were expressed by Frank McGuire, editor of Helicopter News, a Washington-based newsletter. “I do not feel comfortable about the entire project,” Mr. McGuire said. “I look around at what people are buying and not buying and I look at what Canadian taxpayers are putting in. If I were Canadian, I’d be very nervous.” One option that would have reduced the risk for Canada would have been to use an already developed engine in the new helicopter. The first model of the new helicopter will in fact carry an established engine, manufactured by the Allison Gas Turbine division of General Motors Corp. of Detroit.

But once the new Pratt and Whitney engine is finished, it will become the engine in later models of the best rc quadcopter.

F. Harvey, director of Allison’s small aircraft engine program, said his company very much wants to have its engine used in these later models as well and it is willing to offer Canada an attractive deal. But he said his company was never given an opportunity to bid on the engine contract.

He said Allison heard about the project through helicopter manufacturers that were bidding on the airframe part of the deal. Allison knew that Canada would want an engine manufacturer to create jobs in Canada, so it approached Canadian officials to find out if its plans for creating Canadian jobs were in line with what Canada was seeking.

Mr. Harvey said his company is considering building a plant in Canada and expanding its relationship with Standard Aero Ltd. of Winnipeg, which services Allison engines.

He also said that, unlike Pratt and Whitney, his company would not have had to seek development funds from the Canadian Government since the development work has already been done on the Allison engine.

But Mr. Harvey said that when he met with Canadian officials in the fall of 1983, they told him that it was already decided that Pratt and Whitney’s new engine would be used in later models of the newhelicopter. He said the project was announced about 10 days later, in October, 1983.

Clifford Mackay, director-general of the federal Government’s electronics and aerospace branch, said there has been a change in department staff since October, 1983, and he is not aware of what transpired between Allison and Government officials of that time.

The decision to use the Pratt and Whtiney engine was a commercial one made between Pratt and Bell, he said.

An official at Bell in Fort Worth refused to comment on that.

But an internal federal Government document indicates that Canada had already decided on using the Pratt engine in the new helicopter before it chose Bell as the helicopter manufacturer. Indeed, Bell’s willingness to accept the new Canadian-financed engine was advanced as an argument for choosing Bell, the document shows.

The French manufacturer Aerospatiale was willing to use the new Pratt engine in some of the helicopters that it proposed to produce in Canada, but it did not want to commit itself to use the new engine exclusively.

Philippe Orsetti, executive vice-president of Aerospatiale, said that although he has a high regard for Pratt and Whitney engines, his company wanted to wait and see how the new engine turned out before committing itself.

Mr. Orsetti said it might have been wiser for Canada to opt for the already established Allison engine, if Allison was willing to move some of its operations to Canada.

Mr. Orsetti, who has looked at drawings for the new Pratt engine, said he does not believe it will offer any significant technological breakthrough. Unlike the earlier Pratt engine, the PT6, which was a revolutionary step in engine manufacturing, the new Pratt engine will not offer much more than existing engines, he said. “It’s going to be more modern of course, but it’s not revolutionary,” Mr. Orsetti said. “It’s not the engine of tomorrow. It’s the engine of today.” Mr. Smith of Pratt and Whitney Canada said his company also hopes to sell the new engine to manufacturers other than Bell.

Canada’s $100-million contribution will cover 30 to 40 per cent of the engine’s development costs, Mr. Smith said. The company will pay Canada a royalty averaging 2 to 3 per cent on sales.

Mr. Smith said that he is confident that the depressed helicopter market will pick up and that the project will create about 1,000 new jobs in Montreal.

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