"Hey! Buddy! Gimme some money."
"Um, okay. Please give me some money?"
"What, are you going to make me beg?"
As a matter of fact, that's exactly what General Electric (NYSE: GE) was forced to resort to last week -- begging. First GE got shot down in the contest to build a jet engine for Lockheed Martin's (NYSE: LMT) new F-35 fighter jet. Then GE got strafed on the ground when it tried to sell its engine as an "alternate." In a last desperate attempt to keep hope alive, GE begged to develop the engine for free -- offering to eat the $100 million annual development cost itself.
Now, maybe Congress took pity on GE. Maybe it just recognized a good deal when it saw it. Whatever the reason, last week the House Armed Services Committee voted 54 to 5 to let GE keep building the alternate F-35 engine on its own dime, for the next two years.
Foolish takeaway
The U.S. taxpayer comes out of this a winner. GE has basically volunteered to "keep United Technologies (NYSE: UTX) honest," and ensure it doesn't overcharge us for its engine. But GE wins, too. With access to its engine, testing facilities, and research restored, GE can keep developing the engine, and maybe one day sell it to Boeing (NYSE: BA), Northrop Grumman (NYSE: NOC), or even Lockheed, for use on a different plane. These two years could enable GE to more widely develop its engine for greater application.
As an added bonus, GE may win even bigger. Its Hail Mary pass struck home, and it's now got two extra years in which to lobby Congress to pay for the engine.
And wouldn't you know it? We get a new Congress in 2013.
Will GE ultimately wear Congress down and close the deal? Add it to your Watchlist and find out.
