Rolls-Royce is joining forces with its arch-rival, General Electric of America, to produce an advanced engine for a new-generation fighter aircraft.
The deal, announced yesterday and which also brings Rolls's American division, Allison Engine, into the partnership, creates a formidable force to challenge Pratt and Whitney's rival military engine.
Rolls, GE and Allison intend to form a more integrated business consortium with the next few years, the companies said.
A new engine is needed for the Joint Advanced Strike Technology aircraft, expected to be the only new US fighter programme in the next 30 years.
Three US aircraft-makers - Boeing, Lockheed and McDonnell Douglas - are working on designs of the new fighters, which are also expected to replace the Royal Navy's Harrier jump jets.
Rolls estimates that US/UK orders could total 3,000 early next century, with "considerable additional export potential." Under the agreement, GE would act as lead systems integrator for engine development work, and Rolls would work on the design and development of the fan.
"By drawing on the strengths of the three companies, this team can produce the range of technologies to meet the challenging JAST requirements," said Charles Hughes, Rolls's project director for future combat engines.
The engine-makers hope that their YF120 cruise engine can gain the lead over the F119 engine being developed by Pratt and Whitney, which is leading the competition for the order in the early stages.
The Rolls partnership is also working on developing a GEA-FXL lift engine that would initially get the fighters into the air.
GE and Allison, bought by Rolls last year, have co-operated on developing advanced propulsion technologies for the US government since 1993
Meanwhile, reports in Germany said a possible engine alliance between the Daimler Aerospace unit MTU and a joint venture between BMW and Rolls is increasingly unlikely.
The failure to reach a deal could have serious consequences for MTU, which has been restructuring as part of Dasa's Dolores ("dollar-low rescue") program.
The companies had hoped to formulate an alliance by the end of February, but the date has come and gone.
"We must draw our conclusions from that," a BMW spokesman said.
According to Reuters, industry sources said MTU's existing co-operation commit
ments with Pratt & Whitney make it impossible for it to team up with BMW/Rolls.
Dasa declined to comment on a report in Germany's Handelsblatt newspaper that the co-operation talks had collapsed.